The future of distribution depends on AI upskilling
By Geoff Thomas, Senior Vice President, Asia Pacific and Japan, Infor Australia’s manufacturing sector is at a critical crossroads. Rising energy costs, economic shifts and workforce shortages have challenged the industry to remain competitive. On the brighter side, government initiatives and technological innovation have been driving a transformation. In particular, AI has transitioned from a tool promising to simply enhance automation, to a powerful technology that drives significantly smarter decision-making and dramatically improves operational efficiency. Despite its potential, many Australian distributors are still struggling to implement AI at scale. Globally, 82 per cent of supply chain organisations are using AI and GenAI across an array of use cases, according to an EY survey. But the Australian Government’s SME AI Adoption Tracker reveals that our nation lags behind, with only 31 per cent of distributors having adopted AI, displaying higher levels of unawareness compared to our international counterparts as well as other industries such as retail, healthcare and hospitality, which all boast adoption rates of over 40 per cent. Despite the potential of AI to generate real business impact, distributors are not prioritising the adoption of AI, often viewing it as a short-term fix instead of a strategic investment. This can largely be attributed to distributors approaching AI without a clear strategy, subsequently implementing applications that fail to align with core business goals. For true value to be unlocked, distributors need to develop a scalable and flexible foundation, and implement integrated management systems to facilitate the game-changing benefits of AI. Even though roughly 95 per cent of global distributors are exploring AI use cases across the value chain, according to a study by McKinsey, only 30 per cent say they have sufficient talent within their organisation to scale these efforts. Less than 10 per cent report having an AI road map with prioritised use cases for deployment. This is a missed opportunity, particularly with the rise of agentic AI, which can free organisations of lower-value tasks by autonomously performing tasks and pursuing predefined goals. McKinsey’s research also shows that only 23 per […]

