Given that manufacturing and distribution is a symbiotic relationship (or should be) in the greater supply chain, I never want to pit one against the other.
That is, unless it’s for helpful context purposes, which is the purpose of this blog.
The National Association of Manufacturers (NAM) released fresh data from its 2024 First Quarter Manufacturing Outlook Survey on March 5, and one of the quantitative questions the survey polled its some 300 respondents about during February concerned their level of AI utilization.
Given that this question essentially mirrored one asked in MDM’s 2Q23 Industrial Distribution Survey that polled about 500 firms — mostly distributors — I think it’s worth comparing the results.
NAM’s survey asked, “What are the ways in which your company utilizes AI?” and allowed respondents to choose all options that applied.
Seen in the chart above, 46.9% of respondents said they were uncertain how their company uses AI, which means more than half are certain. The application areas are self-explanatory in the chart.
Let’s compare that with the results of MDM’s survey from July 2023 that asked, “To what extent is your company utilizing AI technology in its operations (internal or customer-facing)?”
The most obviously observation from the MDM survey was that 62% of respondents indicated their company wasn’t using AI in any business area.
It’s important to note the key timing factor in this analysis:
- MDM’s 2Q23 Industrial Distribution Survey was conducted during the first two weeks of July 2023, whereas NAM’s was conducted from Feb. 9-23, 2024. So, that’s roughly a seven-month lag. But even as fast as AI applications are maturing, I don’t expect that the MDM survey figures have moved drastically if that survey was conducted again today.
- On that note, MDM’s 2Q24 Industrial Distribution Survey — to be conducted in the first two weeks of July this year, will pose that same question as a year earlier, allowing us to benchmark from it. So, stay tuned for that Premium analysis this coming Summer.
So What’s the Takeaway Here?
Despite that timing factor and the many nuances that separate manufacturing and distribution, I think we can still extrapolate from these results that, between the two, manufacturing is ahead in the AI adoption race, and by a good margin. Even if that distribution AI application figure has moved 10 points since that July MDM Survey (highly unlikely, in my opinion), the NAM manufacturing figure would still be ahead.
This isn’t entirely surprising. Historically, distribution has always trailed manufacturing when it comes to technology development and adoption, with major tech stack elements like ERP and CRM predominantly developed first for retail and manufacturing and then modified for distribution. When these tools were developed organically for distributors, it happened much later.
With the entire global industrial ecosystem indicating either interest in, initial application or full-on investment in artifical intelligence tools, many production and distribution processes may look very different in just a handful of years if some of the more progressive predictions for AI’s potential come true.
We’ll continue to keep a close eye on AI application statistics on both the distribution and manufacturing sides.
Learn More
In the meantime, you can find plenty more AI insights and analysis from MDM from the following assets:
- Two Premium articles published at the end of February, one as “An Ethical Examination of Business AI” Q&A piece, and Nelson Valderrama’s piece titled “Ride the AI and Data Wave: Your Business Success Secret Sauce”
- Our (free) 2024 virtual AI for Distributors Summit – held Feb. 7 and now available on-demand
- Our November 2023 “Smarter Distribution — Embracing AI for Next-Level Success” webcast, and it’s ensuing whitepaper
- Our AI Playbook research report – published September 2023, and its ensuing webcast that aired in October 2023
