Automation, AI, and the Race to Reinvent Distribution

The Distribution Futures 2035 study by MDM and Infor looks at how wholesale distribution might change over the next decade. What the researchers found wasn't one clear future, but several possible ones - each shaped by how much companies rely on technology versus people.

In some scenarios, machines and data do nearly everything. In others, it's relationships and human trust that drive success. Both paths are already visible today, quietly unfolding at the same time.

This two-part series explores those possibilities.

• Part 1 (this article) looks at a technology-first future, where automation and digital tools reshape how distributors compete and deliver value.
• Part 2 will focus on the people-first future, built around trust, relationships, and resilience.

Whatever shape the next decade takes, one truth stands out: distributors who can adapt fastest will define the direction of the entire industry.

The Great Acceleration: Why Innovation Can't Wait

For decades, distributors relied on experience, service, and efficiency to stay ahead. Change was slow, and doing what you did yesterday (just a little better) was enough.

That's no longer the case.

According to MDM's 2024 research, companies that make a habit of studying the future such as tracking trends, spotting early signs, and preparing for shifts are four times more likely to rank among the most profitable and innovative. Simply put, those who plan ahead tend to grow faster.

Yet, only 11% of distribution leaders feel confident that their current strategies will still hold up three years from now. The rest admit they're unsure how to prepare for what's next, and it's understandable. Between rising costs, digital competitors, labor shortages, and the growing use of AI, planning beyond the next quarter can feel like guesswork.

One Future, Four Paths

To make sense of that uncertainty, MDM and Infor created a set of 'future scenarios' that are snapshots of what 2035 could look like depending on two factors: how much companies invest in technology, and how stable the global economy becomes.

This article looks at the two 'high-innovation' futures, where technology races ahead and distributors must either keep up or risk being left behind.

Scenario 1: 'Race to Reinvent' or When Distributors Become Tech Companies

In this version of the future, both technology and global trade accelerate: borders stay open, and digital platforms dominate how businesses buy and sell.

Distributors that want to compete have to rebuild from the ground up. They no longer act as middlemen. Instead, they operate like tech companies: managing vast data networks, predicting demand, and automating nearly everything. Platforms such as Amazon Business and Alibaba already control large parts of the B2B buying journey and many manufacturers now sell directly to customers online, skipping distributors entirely.

To survive, distributors rely on intelligent digital systems that track orders, predict needs, and automatically adjust prices and inventory. The old habits including phone calls, paper forms, manual entries - fade into history.

Nick Pericle, Managing Director at ProfitOptics, puts it clearly:

'Standing still and not understanding what technology can do for your company is a big risk.'

In simple terms: This is a world where technology is used to go faster and grow bigger. Companies compete on speed, automation, and global reach.

Think of it like a Formula 1 race. Every team is using data, sensors, and machines to find milliseconds of advantage. Success doesn't depend on how many people you have, but how quickly you can react and fine-tune. AI becomes the driver's assistant, data is the fuel, and automation is the pit crew that never sleeps. Distributors who keep upgrading their 'cars' stay in the lead; those who hesitate lose ground fast.

It's a fast-paced, connected, data-heavy world and a place where progress never stops.

Scenario 2: 'The Fortress Economy' or When Automation Becomes a Lifeline

Now imagine a very different world. Trade is fragile, politics are tense, and global supply chains are constantly disrupted. The atmosphere feels cautious, uncertain, even defensive.

Welcome to The Fortress Economy.

Distributors here still depend on automation and AI, but for a different reason - survival. Technology keeps them operational when outside forces make everything harder: labor shortages and trade barriers strain the supply chain, warehouses turn to robots and automated picking systems, drones and driverless trucks deliver goods, AI tools handle pricing, logistics, and customer communication when human teams can't keep up.

Here, innovation doesn't aim to expand, but to protect and automation becomes a shield against instability, not a race toward global growth.

The risks, however, don't disappear. For example, cyberattacks are constant or governments tighten digital regulations. In this world cybersecurity budgets grow as quickly as tech investments and at the same time, a new breed of 'AI-native' competitors emerges (startups that run almost entirely on automated systems, moving faster and leaner than traditional players).

As Ole Rasmussen, Senior Vice President at Infor, explains:

'AI can help, but you'll need to constantly focus on where you're adding new value for the customer.'

In this world, technology is about protection and adaptability, not expansion.

Picture each distributor as a fortified castle. Outside the walls are trade wars, cyber threats, and political storms. Inside, automated systems keep operations running: machines that never rest, digital guards defending data, and AI-driven logistics keeping order. The challenge isn't how fast you can move, but how long you can withstand the chaos.

It is a careful, controlled, and highly automated environment where every move must balance innovation with security.

Two Worlds, Two Strategies

At first glance, 'Race to Reinvent' and 'Fortress Economy' might look alike: both filled with automation and AI. But they're opposites in spirit.

• Race to Reinvent thrives on speed and growth in a connected world.
• Fortress Economy focuses on resilience and defense in a fractured one.

What Future-Ready Companies Look Like

Across both futures, a new kind of distributor starts to appear. These companies don't look like the wholesalers of the past. Instead, they act like intelligent networks that blend logistics, data, and customer insight into one seamless system.

What sets them apart:

• Automation and AI are part of everyday work. Teams use software to make faster, smarter decisions and eliminate repetitive tasks.
• Warehouses think for themselves. Robots and sensors track stock levels, restock automatically, and reduce waste.
• Cybersecurity is treated like insurance. Protecting uptime and data becomes a core business priority, not just an IT task.
• Learning replaces long-term planning. Instead of five-year strategies, these companies operate in short learning cycles: testing, adjusting, and improving every few months.

The biggest shift, though, is cultural:

• Leaders act more like coaches than commanders.
• Teams are smaller, faster, and more adaptable. 
• Employees are trained to work with digital tools, analyze information, and solve problems creatively.

In short, the companies that thrive are the ones that stay curious and don't wait for disruption - they expect it.

Preparing for a Tech-First Decade

So, how can today's distributors get ready for the future ahead? Research points to five simple, practical steps:

1. Look ahead, not just around. Set up a small team to track trends (technology, regulation, customer behavior). The more you understand what's coming, the better you can prepare.
2. Help leaders speak technology. Executives don't need to be engineers, but they do need to understand what AI and automation can actually do. That knowledge leads to smarter investments.
3. Connect your systems. Bring sales, inventory, and finance into one shared view. When everyone sees the same data, the business moves faster and with fewer mistakes.
4. Protect what matters most. Cybersecurity isn't optional: back up data, secure systems, and make sure employees can spot threats before they grow.
5. Experiment safely and often. Try small tech projects, measure what works, and expand gradually. The speed of learning will matter more than the size of your budget.
   
   

Each step builds resilience for any future, not just one version of it. Whether 2035 looks like Race to Reinvent or Fortress Economy, the ability to adapt will always be the key advantage.

The Other Side of the Future

On the opposite side of what was mentioned before, not every future will be driven by machines. Some distributors will find their edge in something simpler: trust, local knowledge, and strong relationships.

The Distribution Futures 2035 study highlights two additional worlds:

• 'Trusted Links', where customers demand transparency, ethical sourcing, and responsibility.
• 'Shrinking Horizons', where regional trade replaces global networks, and reliability becomes the top advantage.

These 'human futures' remind us that technology isn't everything. In an unpredictable world, people and trust still matter most.

Part 2 'Trust, Resilience, and the Human Side of Distribution's Future' will explore how distributors can thrive when innovation slows and relationships become the real engine of growth.