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AI in Distribution: Where to Start?

By Monzer Tohme, the Senior Sales Director for the Middle East and Africa at Infor

For a while now, artificial intelligence (AI) has been viewed by many as an exciting new technology that might be able to help manufacturers or distributors modernize and, more importantly, digitalize their operations. Consulting firm Accenture defines AI as a constellation of technologies that allows smart machines to extend human capabilities by sensing, comprehending, acting, and learning—thereby allowing people to achieve much more.

For distributors, AI is a tool you can add to your digital toolbox. AI makes your operation run more efficiently on its own with parameters set by you. Here are some of the ways it can help a distribution company:

Sales recommendations: Having AI recommend items to your customers can do a couple of things for you. In self-service situations, AI can make recommendations for additional purchases based on what the customer is buying, thus increasing your company’s sales and wallet share. For counter sales, it provides similar information that the counter rep can use to make suggestions to the customer.

Proactive supplier recommendations: Selecting suppliers is one of the most critical aspects of any organization. Any inaccuracy in the supplier selection process can lead to poor supplier performance, supply disruptions, and inefficiencies in the business process. AI-powered machine learning models segment suppliers based on three metrics: promptness, quality, and quantity of other available suppliers/vendors.

Discount recommendations: Using historical data of customer orders, AI learns about the customer, division, item, quantity, price, and discount for each order. It augments the business users’ knowledge with the recommendation of max value that can be offered for a given order.

Inventory optimization: There is no more significant asset on a distributor’s balance sheet than its inventory. Having the right amount of inventory in the right location is critical to supporting your customers. Too much inventory fills up your distribution centers and ties up valuable capital. Not having enough inventory prevents you from filling orders. Suppose your inventory is not in the proper distribution centers throughout your network. It can add cost and delivery time to your customer. AI can analyze your customer order patterns and optimize your inventory levels to increase sales and profitability.

In addition, AI can also:

  • Help to maximize the life of assets through predictive analytics on health and maintenance and parts needs.
  • Generate customer insights on what to sell and how to keep your customers happy, improving customer interaction efficiency and retention while growing revenue.
  • Initiate automated process triggers based on specific events or conditions to improve process efficiency and reduce manual processes.
  • Access hidden data insights to increase automation and drive better business efficiencies.

With growing competition, distributor sales reps must do what they do best — spend time with customers and sell! AI provides distributor sales reps with very straightforward direction on what steps to take to increase sales, requiring no time wasted on analyzing data.

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Chris Fernando

Chris N. Fernando is an experienced media professional with over two decades of journalistic experience. He is the Editor of Arabian Reseller magazine, the authoritative guide to the regional IT industry. Follow him on Twitter (@chris508) and Instagram (@chris2508).

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