AI Adoption in the Distribution Sector
The adoption of artificial intelligence (AI) in the distribution sector is progressing steadily, but there is still room for growth. Companies are increasingly recognizing the potential of AI to optimize operations, enhance decision-making, and improve customer experiences. Wholesale and distribution companies are focusing on expanding their partner networks and harnessing AI to drive growth. However, they face three significant challenges:
- Weakness in procurement and supply chains
- Business silos between departments
- Lack of system integration
These insights stem from exclusive research by SAP Insights, which surveyed 12,003 midsize companies globally, including 860 in wholesale and distribution. The findings indicate that while modern technologies are seen as solutions to overcome challenges, internal issues must be addressed first to facilitate digital processes and data flow.
External pressures such as evolving customer demands, increased competition, and market disintermediation further complicate the landscape. Respondents view advanced analytics as a crucial technology for addressing growth challenges, with a strong need to manage talent to bridge skill gaps.
The labor crisis in manufacturing, warehousing, and logistics, particularly in North America and Europe, adds urgency to these challenges. Companies that effectively address these interconnected issues will be better positioned for sustainable growth. Investments in technology that enhance decision-making and adaptability are essential.
The survey highlighted a fervent desire to simplify processes, with 90.3% of respondents prioritizing process improvement. Key areas of focus include:
- Streamlining product/service development
- Enhancing cost control and spending management
- Increasing integration between enterprise systems
However, internal obstacles like procurement weaknesses and resistance to change hinder progress. Respondents prioritized increasing automation, improving decision quality, and enhancing system integration.
Additionally, companies are prioritizing cybersecurity, adopting AI applications, and addressing supply chain gaps. Generative AI is anticipated to significantly impact processes and customer engagement, although respondent’s express concerns about transparency and data quality in AI-generated results.
Overall, wholesale and distribution companies are seeking to navigate a complex landscape by leveraging technology, improving processes, and addressing internal challenges to foster growth.
ResolveIQ™ is 2W Tech’s proprietary AI platform that seamlessly integrates with your operations, designed to grasp the nuances of your business, including your manufacturing and distribution processes and critical challenges. It allows communication in everyday natural language, like texting, via a web application, MS Teams, or Copilot, making it user-friendly and efficient for all users. Give the team at 2W Tech a call today to learn more about ResolveIQ and how artificial intelligence can change the way you do business.
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