For some time now, artificial intelligence has been inconspicuously built into our daily lives through the social platforms and applications we use every day. But it wasn’t until recent years, with the commercialization of ChatGPT splashing onto the mainstream scene, that the technology’s potential to streamline distribution operations stirred up endless curiosity, hype and hope.

There’s no more escaping the noise around AI as it’s being rolled out into the daily manufacturing and distribution business context. What makes this hype cycle so amplified?

ChatGPT has become synonymous with AI, but AI is a broader category that includes other buzzwords like machine learning and generative AI. Its wide-reaching accessibility and the technology’s ability to aggregate, assimilate and bring together vast amounts of knowledge and data to produce something new, has endless possibilities.

Justin King, a long-time technology analyst and an evangelist for technology specific to wholesale distribution, says distribution executives who embrace and use the technology within their businesses are the ones who will elevate themselves and their business, just the same as those in distribution who embraced the CD-ROM in the 1990s or entered the internet explosion with open arms.

His perspective was featured in the latest MDM Podcast episode with MDM CEO Tom Gale.

“This is a chance to learn and adapt and understand and find areas of efficiency and scale. But it’s not the time to trust blindly what technology is telling you is right or wrong or what decision to make,” King told Gale.

AI isn’t a technology designed to swoop in and save a business, he added, but rather a business tool to help distributors become more efficient.

King, the Global Director and Principal Analyst for B2B eCommerce Association and an author on B2B digital innovation, believes that those in the C-suite should have their companies experimenting and using the technology now to reap the benefits.

Gale echos a positive sentiment about AI, which he says can enable both business efficiency and innovation.

“I’m also very optimistic, particularly in longer-term, of how this really is going to elevate business’s capabilities to differentiate more effectively going forward in all the noise that’s out there,” Gale said.

Real-World Example of AI in Distribution: Screen Supplier Bids

During the podcast, King shared several examples of how distributors currently use AI to improve their business, including how one industrial distributor uses a private GenAI model (similar to ChatGPT) to screen their supplier bid documentation.

When vetting a new supplier to provide a new product, distributors typically send bid documentation to two or three different suppliers, King explains. Manually screening that documentation takes time.

“They are actually using a GenAI to summarize and allocate points of the supplier bid documentation, compare the bids to other bids, draw the pros and cons … and it makes this decision-making process significantly easier.”

The results were a 90% reduction in the time it takes to review a supplier bid, he said.

During the conversation, King outlines three other real-world examples of how distributors use artificial intelligence in distribution in this episode, including in:

• Marketing: A building materials distributor uses GenAI to create personalized marketing emails based on customer attributes.
• Logistics: A large distributor uses GenAI to reduce shipment lead times.
• Inventory Management: A semiconductor distributor uses AI to classify products by tariff code.

Learn more about each example in the full episode via the audio player above or find on the MDM Podcast full episode library.

King has contributed insights on digital strategy topics to MDM for many years. On Sept. 11-13, he will be a speaker at the MDM 2024 SHIFT Conference in Denver, CO.