WINTER 2024

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THE DISTRIBUTOR’S LINK
JIM TRUESDELL ARTIFICIAL INTELLIGENCE WILL CHANGE THE WAY DISTRIBUTORS WORK from page 40
What Initial Uses Of AI Will Impact The
Way Wholesale Distributors Manage Their
Businesses?
Customer demand forecasting and inventory
management will become more advanced. This will
be accomplished by algorithms using historical data,
market trends and outside variables to come up with
more precise projections. Robotics and automated
warehouses will improve how product is packaged
and sent out to the customer. Robots will roam the
warehouse aisles recognizing product and carrying out
various functions without closely controlled human
direction. Labor intensive tasks will be replaced by
automated functions. AI will coordinate with sensors
to monitor equipment and predict needed maintenance
before breakdowns and slowdowns occur. Logistics and
route optimization will find the best delivery routes and
analyze traffic patterns, weather, and other factors to
insure the most efficient delivery. Pricing will be guided
by analysis of data, of market trends, competitors,
historical data and changing customer behavior to come
up with optimal pricing strategies. Analytics will drive
better decisions and minimize chances of fraud and
shrinkage. (DCKAP, “Artificial Intelligence and Industrial
Distribution: How Does the Future Look?”, May 24, 2003)
Balancing the benefits with the challenges a
company faces, there are certain obstacles that must be
overcome. These include:
[1] Problems with Data Quality—Since the
algorithms on which it is based rely on data inputted, if
it is incomplete or inaccurate, or if it is outdated it can
degrade the quality of results.
[2] Employees may resist the changes required,
either because it threatens to devalue the human skills
they may have proudly developed, or it may require
learning curves to deal with the new capabilities.
[3] The AI might take actions conflicting with company
values or departing from the mission of the organization.
[4] Initial investment may be costly which may
dissuade some companies from adopting AI
[5] Cybersecurity will be a concern and may require
additional protections against unauthorized intrusions.
(www.laceupsolutions.com “AI in Distribution and
Wholesale Operation: How Can It Help”, 11/6/23)
Of course, from a macro standpoint our society is
worried about the long term effects of AI in that the
technology could be put to improper use by bad or
rogue actors to disrupt existing infrastructure in acts of
terrorism, or even aggressive nationalist actions. There
may be decisions reached and actions taken without the
transparency needed to verify they are based on sound
reasoning. There may be no infusion of ethics in decision
making and government regulation may run behind the
pace of product development. Most disturbing of all,
what if the AI begins to get out of control and threatens
to take actions inconsistent with the welfare of the
humans who created it or maintained it. It brings chilling
thoughts of sci-fi fiction scenarios where machines take
over the world.
In response to these potential concerns, in November
2023 Great Britain hosted the historical Bletchley Park
summit. Many of the leading technological nations’
governments sent leaders to consider international
policies and agreements to put curbs and controls on
AI development. The UK, the US, the EU, Australia and
China and twenty-three other countries signed up to
what was called the “Bletchley Declaration” agreeing to
work together on AI safety research. There was not yet
agreement over what international standards should look
like or who would be responsible for them.
Artificial intelligence is an concept that is exploding
across the business scene right now. It is said that in a
few years business, and the skills needed by managers, will
radically change because of this. Distributors’ associations
and company managements will need to be integrally
involved and ready to deal with its challenges.
JIM TRUESDELL