Are You Ready for AI and Should You Care? - Modern Distribution Management

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Are You Ready for AI and Should You Care?

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The term “artificial intelligence” defies definition for many people. Hollywood has long played with the concept, usually in the form of killer robots and computers – from “The Day the Earth Stood Still” to Hal in “2001: A Space Odyssey” to the “Terminator” series to the recent “Ex Machina”. But if this is really our future, then mankind’s aggressive development of artificial intelligence would appear to spring from authentic stupidity.

Recent AI developments, however, are much more useful than lethal. Drone delivery; autonomous cars, trucks and forklifts; voice-activated smart speakers and visual product recognition and identification make our lives easier and, in many cases, potentially safer. But what the heck is AI and how is it different from other technologies, apart from being more advanced?

Here’s the simple difference between advanced technology and AI: AI incorporates various algorithms called “machine learning” that allow the technology to learn and get better at its assigned task over time, automatically and without human intervention. 

So, if you’ve driven a car that keeps you between the lines on the road and maintains a safe distance from the traffic in front of you, that’s advanced technology. However, if that car actually gets better at its job over time (for example, by learning your driving habits and compensating for your bad tendency to follow too closely), then that’s artificial intelligence. The basic requirement that the technology learns and improves on its own over time is what defines the difference. 

You probably interact with AI right now and don’t even know it. If you use a music streaming service like Spotify or Pandora, then you might notice that it gets better over time at understanding your tastes. That’s AI. If you use a voice assistant like Siri or Alexa, you may notice that it gets better at understanding what you’re saying over time. That’s also AI. Delivery drones, which have been in active use by Chinese retailer for years now, fly autonomously and get better at reacting to weather and other variables on their own. Once again – that’s artificial intelligence. 

Why Distributors Should Care

Your customers are interacting with AI today and are benefitting from the capabilities these technologies deliver. That’s creating expectations: they will eventually expect you to provide similar capabilities. The problem is, if you don’t understand AI, don’t have any expertise on your team or don’t have the underlying technology stack required to develop those capabilities, you won’t be able to meet your customers’ requirements in the future.

Consider, for example, a technology called augmented reality. AR involves overlaying artificial visual imagery over a real-time view. If you’ve seen the Terminator movies, you may recall that whenever the picture switched to the robot’s point of view, you could tell that he was viewing the real-life scene, overlaid by useful data – such as the boot, pants and jacket size of a biker whose clothes Arnold needed in order to stop walking around naked (even killer robots find that embarrassing). In the real world, companies are developing AR that allows maintenance technicians to put on goggles that overlay useful information about products like machine tools or car engines in need of repair. The AR can highlight various components, show the hand tools needed to disassemble and reassemble the machine and even demonstrate which fasteners to remove to get the job done. 

Imagine the level of product data required in order to power that sort of AR. In addition to transactional and basic product databases many distributors have built, AR will require 3D imagery and accompanying maintenance routines, along with images of the tools necessary to do the repair. I bet that data is not in your product information management system today, if you have one of those. 

What to Do Next

You’re going to need experts on your staff who understand this technology so you can develop the requirements to deliver these capabilities when the market demands it. You’ll also need the foundational technical stack to bolt new systems to and you’ll need suppliers who can give you the required data. 

But it all begins with understanding artificial intelligence in the first place. To help get you up to speed, MDM recently released The Future of AI in Distribution, written by AI guru Michael Wu of PROS, private equity expert Austin Garrison and myself. This 17-page guide is an essential primer for distribution executives who wish to understand this technology. And we have also developed a free online “AI Readiness Assessment,” which you can take here.

The AI revolution will likely be as big as the internet revolution. You need to understand this topic in order to evaluate companies like Amazon Business and to plan your own capability development. I encourage you to read the guide and also to leave a comment below. Of course, you can always reach me directly at I’d love to hear from you.

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