February 6, 2023 Emerging Technologies Take the Lead in Distribution

Technologies such as robotics and automation, AI and more are forecasted to upend the distribution industry in 2023.

By: Will Quinn, Director of Distribution industry and Solution Strategy, Infor

The distribution industry has been around for quite a long time and can sometimes be slow to change.  It is best to look at these emerging technologies as tools you can use, like a forklift. You wouldn’t think of trying to move pallets around a warehouse without using forklifts, yet some in our industry remain skeptical about new technology. Emerging technologies in the distribution industry are transforming the way goods are transported and delivered. These innovations are making distribution processes more efficient, cost-effective, and sustainable.

One of the more interesting emerging technologies in the distribution industry is drones for last-mile delivery. Drones are small and crewless aerial vehicles that can deliver packages directly to customers’ doors. This technology has the potential to revolutionize the distribution industry by reducing the need for ground-based transportation and enabling faster, more efficient delivery.

Another emerging technology in the distribution industry is robotics and automation. Robotics and automation are being used to improve the efficiency and accuracy of warehouse operations, including the sorting and packaging of goods. Automation can perform the routine and mundane tasks your people would rather not do. The latest generations of warehouse robotics are designed to work collaboratively with people to make operations safer and more efficient. Reductions in movement and touches reduce injuries to your workforce and the risk of product damage. These touches and tasks can extend beyond the warehouse. Customer service, billing, and other routine rules-based tasks using structured data through robotic process automation (RPA) can also be improved. RPA mimics human keystrokes on a computer to perform these everyday tasks more efficiently with far fewer errors. Second, automation reduces the need for additional labor you are already struggling to recruit, hire and retain to continue to scale and grow your business. These technologies can help to reduce labor costs and improve the overall efficiency of the distribution process.

One of the most powerful emerging technologies in the distribution industry is the use of big data, analytics, and artificial intelligence (AI) is also transforming the distribution industry. By collecting and analyzing data on customer behavior, distribution companies can gain insights into the most efficient ways to transport and deliver goods. This information can help them to optimize routes and reduce the time and cost of distribution. Some potential ways in which these technologies can be used include:

1. Optimizing routes: By collecting and analyzing customer behavior, traffic patterns, and other factors, distribution companies can use AI to determine the most efficient transportation routes. This can help to reduce the time and cost of distribution and improve customer satisfaction.
2. Predictive maintenance: Predictive maintenance uses data and AI to predict when equipment, such as trucks and forklifts, is likely to fail. This allows distribution companies to schedule maintenance and avoid costly downtime.
3. Inventory management: By using AI to analyze data on sales, customer demand, and other factors, distribution companies can optimize their inventory levels and reduce the risk of stockouts. Companies can have the right amount of inventory in the distribution centers to minimize transportation costs and times.
4. 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 the customer buying, thus increasing your company’s sales and wallet share. For counter sales, AI provides similar information that the counter rep can use to make suggestions to the customer. A 30-year employee at the counter knows what additional items their customers may need for their job, but a new employee does not have that experience, which is where AI can help.   
5. Fraud detection: AI can identify data patterns indicating fraudulent activity, such as suspicious purchase patterns or fraudulent returns. This can help distribution companies to reduce the risk of financial losses.
6. Customer service: AI-powered chatbots can improve the customer experience by providing fast, accurate answers to customer questions and requests.

In addition, the integration of the Internet of Things (IoT) is playing a vital role in the distribution industry. IoT technology enables distribution companies to monitor the condition and location of their goods in real time, providing them with valuable insights into the distribution process. This information can be used to optimize routes and improve the overall efficiency of the distribution process.

Blockchain technology has the potential to transform the distribution industry in several ways. Here are a few examples of how it might be used:

1. Supply chain management: Blockchain can create an immutable record of the movement of goods through the supply chain. This can help with traceability, ensuring that goods are sourced ethically and sustainably, and reducing the risk of counterfeiting or fraud.
2. Smart contracts: Blockchain-based smart contracts can automate many of the processes involved in distribution, such as the release of payment upon delivery or the automatic reordering of goods when inventory runs low. This can reduce the need for manual intervention and improve efficiency.
3. Asset tracking: Blockchain can track the location and status of assets as they move through the distribution network. This can help with planning and coordination and reduce the risk of loss or damage.
4. Fraud prevention: The decentralized and immutable nature of blockchain makes it difficult to tamper with data, which can help to prevent fraud in the distribution industry.

Also, autonomous vehicles, such as self-driving trucks, can be used for the transportation of goods, reducing the need for human drivers and improving the efficiency of the distribution process.

During a recent conversation with Dirk Beveridge, founder of UnleashWD and Executive Producer of the We Supply America Tour, I asked Dirk, “Why do you think it is important for distributors to embrace and adopt emerging technologies?”  Dirk Replied, “To stay ahead in today’s ever-changing world, it is vital to keep an eye on the evolving needs and wants of your customers. Buying habits are rapidly shifting as new technologies offer a higher level of convenience or personalization. Additionally, keeping up with employee expectations will ensure their satisfaction too; inventing in emerging technology can help create better work environments where everyone feels supported and engaged.”

Overall, the distribution industry is undergoing a significant transformation thanks to the adoption of emerging technologies. These innovations are making the distribution process more efficient, cost-effective, and sustainable, as well as helping drive the industry forward. Many of these are made possible by cloud-based technology stacks.

Will Quinn is the Director of Industry Solution & Strategy for Infor Distribution. With more than 25 years of Supply Chain and Logistics experience, Will brings a wealth of industry knowledge and expertise to the team, enabling our sales organization to better understand the challenges distributors face on a day to day basis. He works closely with distribution industry associations and buying groups, and is a frequent speaker at industry events.

Prior to his role at Infor, Will ran distribution centers for Grainger, Coca Cola, MSC Industrial Supply, WEG Electric and Cintas. He began his career in logistics by serving 12 years in the United States Marine Corps. He also has a Master of Science degree in Supply Chain Management from Elmhurst University.

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