Innovating in distribution with smart tech
Sage X3 integrates robotics like AMRs and AGVs to automate warehouse tasks, boost efficiency, and help distributors overcome labor shortages.
Uncertainty is fueling a new era in distribution, prompting distributors to rethink strategies, embrace innovation, and transform challenges into opportunities.
“Our business changes very quickly, and we have to be on top of it,” says Jerry Hosza, Director of Accounting and Financial Reporting at Publishers Circulation Fulfillment.
He’s not kidding. US distributors face mounting challenges: supply chain disruptions, rising labor costs, and regulatory hurdles, all while navigating economic uncertainty. With inflationary pressures and shifting consumer behavior, businesses must adapt fast.
Distributors, on average, have margins of just 3%. They’re being squeezed from all sides, so what are forward-thinking businesses doing about it?
Forward-thinking businesses are taking the wheel, shifting up a gear, and embracing technology to transform the sector-reaping benefits in cost savings, increased efficiency, and improved accuracy. Analyzing inventory turnover and using AI-assisted forecasting and prediction tools helps mitigate uncertainty and build resilience through informed planning.
In this post, we’ll be taking a closer look at key technologies including IoT, AI, robotics, and cloud-based systems, and the impact they can have on distribution operations, as illustrated by industry success stories.
All eyes on IoT
IoT, the Internet of Things, has long been the solution of choice in modernizing and optimizing warehouse operations.
IoT-enabled sensors enable real-time tracking of inventory and shipments. In the warehouse, managers can automate stock monitoring with smart shelving systems that send alerts for restocking.
RFID tagging allows real-time inventory monitoring, improving accuracy down to an item-by-item basis. Meanwhile, fleet management becomes more agile with GPS tracking-enabled route optimization.
Forecasting peaks and avoiding pitfalls with AI and ML
Tools that build resilience to counter economic uncertainty are no longer a nice to have, they are a need to have.
With a potential US market slowdown and increasing interest rates, distributors must carefully manage inventory levels to avoid cash flow issues while staying agile. You need intelligent forecasting technology that allows you to put together “what if” scenarios for end-to-end processes, so that you can gauge costs and make informed decisions.
Using AI and machine learning (ML) for demand forecasting can make a dramatic difference to profitability and will help your business ride out periods of market volatility. These tools predict demand patterns, helping you plan and manage inventory proactively.
In logistics, AI tools can group orders and pack pallets and trucks more efficiently when paired with robotics. AI-powered route optimization can also make delivery much more time and cost-effective, enabling drivers to take the quickest routes, avoid hold-ups, and save fuel.
AI chatbots are now commonplace for customer service, handling queries and providing support. Bear in mind, though, that while today’s customers expect to have their queries answered quickly, they also still appreciate a human support experience. Increasingly, employees with access to Copilot and other AI-powered assistance are using the chatbot function to help them quickly filter and find files, emails, or other information stored in the cloud or on their computers and/or servers.
Robotics in the warehouse: Mitigating the labor crisis
Robotics are transforming warehousing operations by increasing efficiency, accuracy, and speed. Importantly, they can also help mitigate the labor shortages currently affecting the distribution and manufacturing industries. Automated systems, including robotic arms, autonomous mobile robots (AMRs), and automated guided vehicles (AGVs), streamline processes such as picking, packing, and sorting goods. These technologies often work in conjunction with humans to automate heavy lifting and repetitive processes, greatly improving efficiency while augmenting the value-added work of humans.
One of the most significant impacts of robotics in wholesale distribution is the ability to handle large volumes of orders with precision and speed. Robots can work around the clock without fatigue, improving productivity and meeting the growing demand for faster delivery. Automated systems also optimize warehouse space by efficiently organizing and retrieving items, which minimizes waste and maximizes storage capacity.
Collaborative robots, or “cobots,” work alongside human employees to enhance operations. They assist with repetitive tasks, allowing workers to focus on more complex duties. This not only improves worker safety by reducing the risk of injury, it can also increase overall job satisfaction.
Moreover, robotics enable data-driven decision-making through integration with AI and advanced analytics. By collecting real-time information, companies can forecast demand, monitor inventory levels, and adjust supply chains accordingly. This agility helps wholesale distributors better predict market fluctuations and provide unique insights to their suppliers and customers.
There’s no doubt that adopting robotics in wholesale distribution reduces operational costs over time. While the initial investment may be substantial, the long-term benefits in terms of increased efficiency, stable labor levels, and enhanced customer satisfaction can make them a game-changer in modern value chains.
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Cloud-based systems: Enhancing simplicity and synergy
Meeting ever-increasing customer and supplier demands—in short, consistently providing value and being easy to do business with—requires cloud networks and automation to satisfy today’s expectations.
Cloud ERP and WMS solutions not only position you to meet increasingly challenging expectations, they help you maintain margins and gain a competitive edge. With the ability to integrate the latest technologies, they can also help you continuously improve and securely position your company to be ready for what’s next.
The benefits of Cloud ERP and WMS solutions are numerous and far-reaching:
Simplifying complex processes, saving time and costs
By automating routine tasks such as inventory tracking, order processing, and financial reporting, cloud ERP and WMS systems reduce manual errors and free people to focus on strategic initiatives. This automation not only saves time and increases productivity but also accelerates decision-making by providing accurate, real-time data. Monitoring and managing every stage of the supply chain from a centralized platform enables businesses to better collaborate and continuously improve operational efficiency without increasing costs.
Scalability—the ability to flex and grow with your business
As your business grows and your operational demands increase, a scalable system can easily adapt to accommodate new workflows, product lines, and market expansions. This flexibility supports long-term business growth without requiring costly infrastructure changes. Look for an integration-ready platform that will equip you to take advantage of emerging trends and opportunities, whether you’re managing a single warehouse or a global supply chain.
Data security and improved disaster recovery
Modern ERP and WMS solutions offer advanced security features that stay up to date on the latest cyber threats and offer data encryption, access controls, and automated backups. These features protect sensitive business information and ensure data integrity in the event of a system failure or cyberattack. Enhanced disaster recovery processes mean that, if the worst should happen, businesses can quickly restore operations, minimizing downtime and financial losses.
Connectivity between suppliers, warehouses, back-office and logistics teams
Real-time collaboration makes it easier to implement shared efficiencies. ERP and WMS systems facilitate real-time data sharing, enabling better coordination and communication across the supply chain. This reduces delays, improves inventory accuracy, and enhances customer satisfaction by ensuring timely deliveries. Any ERP or WMS system needs to be easy to use for all stakeholders, with good customer support. Your people power your business, so it’s vital that everyone can make the most of your assistive technology and feel like a valued contributor.
Facilitating better stakeholder relationships
By offering a single consolidated source of real-time insights and streamlining connectivity, modern ERP systems foster transparency and trust. The right ERP system should provide a unified platform for data analysis, trend identification, and information sharing. This will enable your business to track customer preferences, anticipate their needs, and add value by delivering relevant, personalized solutions and experiences.
Trucking services company Montana CAD implemented a cloud ERP system to free up time for its management team to optimize operations. The business was growing quickly, and manual accounting tasks were taking up an increasing amount of the principals’ days. “We were busy, and it left little time for me to strategize,” says Vice-President and General Manager Logan Lamm.
The new system automated workflows that saved five hours a day in admin tasks. It was also ready to integrate seamlessly with a new dispatch software application that the team was developing. Now the company has tripled in size without needing to source any additional accounting talent.
“The efficiencies we’re gaining…allow us to continue growing without adding any additional accounting personnel.”
Logan Lamm, Vice-President and General Manager, Montana CAD
On the horizon: Emerging technologies and trends
The rise of direct-to-consumer (DTC) models could be seen by many distributors as a threat. However, there’s more value in viewing it as an opportunity to evolve and benefit. Now’s the time to adopt practices and technologies to modernize your processes and add value for customers. Consider partnerships with manufacturers for mutual advantage.
New technology is also supporting sustainability in distribution, such as AI-powered tools helping companies lower their carbon footprints. According to McKinsey, logistics emissions from freight and warehousing account for at least 7% of global greenhouse gas emissions, and AI-powered tools (such as route optimization and predictive analytics) are increasingly being used to reduce these emissions as part of broader decarbonization strategies.
Although not a key priority for many US businesses, implementing green policies and procedures may be required for compliance in some sectors, and can also position your organization favorably with millennial and Gen-Z talent.
Smart technology can transform your distribution business
Staying future-ready
While most distributors today use technology in some form or another, it’s essential to keep an eye on new innovations, and also to ensure that you’re using existing systems in the right way to maximize their potential.
When you invest in integration-friendly cloud software that unifies your company’s data and processes from demand to delivery, the increased visibility and control extends beyond positively impacting your business drivers—it helps ensure you’re ready to embrace and adopt new technologies as they emerge.
Delivering award-winning warehousing, transportation, logistics, and fulfillment services across seven states, Peoples Services adopted this system, and now enjoy elevated insights with 36 dashboards customized to their business needs.
“We can make impactful decisions weeks quicker than we could before because we have more access to timely information,” says Treasurer Adam Herman. “We can slice and dice data in different ways to hone in on what’s working and what isn’t, and that’s definitely made us more nimble.”
“It [felt] like going from the Wright brothers to the Apollo program overnight.”
Adam Herman, Treasurer, Peoples Services
Want to learn more? Read about the future of distribution, including trends, challenges and strategies for success.
