How AI is Shaping the Future of Manufacturing & Distribution

blog/how-ai-is-shaping-the-future-of-manufacturing-and-distribution

2024-09-06

Artificial Intelligence (AI) is changing things.

From Search to Copilot, AI is becoming increasingly widespread and critical for organizations and even customers, and manufacturing and distribution companies are are no exception.

Is AI Just a Buzzword?

Though the concept of AI has been around for decades, recent technological breakthroughs have made it the hot topic of discussion it is today.

So essentially, yes, it is a buzzword, especially with AI being the “newest” feature in many different cloud software.

But you can decide for yourself whether you think the AI trend will die out soon:

• Global AI investments surged to $77.5 billion in 2023, a 23% increase from the previous year, highlighting the strong belief in AI’s potential to drive business growth and innovation

• A 2022 report by Accenture found that AI has the potential to boost labor productivity by up to 40% by 2035, significantly enhancing economic growth in developed economies

• PwC estimates that AI could contribute up to $15.7 trillion to the global economy by 2030, with $6.6 trillion coming from increased productivity and $9.1 trillion from consumption-side effects

Before we dive into the specifics of distribution and manufacturing applications for AI, let’s touch on the current capabilities of AI as of the time of writing:

• AI is, and will continue to be more, widely accessible to the public with countless tools for improving productivity and simplifying tasks

• The integration of AI with cloud technology is allowing businesses to process larger amounts of data and collaborate more effectively

How is AI Benefiting Distribution and Manufacturing Companies?

The Benefits of AI for the Distribution and Manufacturing Sectors Include:

1. Enhancing Employee Efficiency

2. Improving Customer Satisfaction

3. Optimizing Supply Chains

4. Increasing Product Quality

5. Reducing Operational Costs

Use Cases That Can Help Achieve the Benefits of AI for Manufacturers and Distributors:

• Automating routine tasks with AI-powered bots

• Using AI for predictive maintenance in equipment

• Implementing AI-driven demand forecasting

• Enhancing quality control with AI-based image recognition

• Optimizing delivery routes using AI algorithms

• Personalizing customer interactions with AI chatbots

• Integrating AI into supply chain management systems

AI and ERP Systems: Transforming Business Management

Enterprise Resource Planning (ERP) systems are crucial systems for distribution and manufacturing companies, and integrating AI into these systems can greatly enhance their effectiveness.

For example:

1. Traditional ERP systems in distribution and manufacturing primarily focus on storing and processing data. With AI, these systems become proactive tools that offer deeper insights, helping companies make informed decisions and drive process improvements.

2. AI enhances ERP systems by automating key processes like order management and financial planning, which reduces errors and significantly improves overall efficiency.

How Can Businesses Navigate the Human Side of AI?

As AI becomes more integrated into business processes, managing the human aspect is critical. Here’s a few tips to help companies navigate:

• Clear communication, training, and involvement in AI initiatives can help ease the concerns of employees worrying that AI will disrupt their roles.

• Long-term employees possess valuable knowledge that AI can’t replace. Documenting and incorporating this expertise into AI systems is essential.

• Organizations need to ensure AI is used responsibly, with attention to data privacy, transparency, and fairness.

• A clear plan for AI adoption helps ensure that the technology aligns with business goals and delivers the expected benefits.