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How Will AI Impact Last Mile Delivery in Building Supplies?

The recent spate of acquisitions and consolidations continues apace in building supplies distribution—which means that medium-sized outfits are going to continue to be on the hunt for anything that can give them an edge. Given how frequently it’s been in the news since last year, it’s more than reasonable to wonder whether that edge might come in the form of AI- and machine learning-powered technologies.image (48)

The short answer to that question is: yes. But when you actually dig into the evolution of this technology, there’s a lot of nuance. Understanding exactly how the industry is potentially going to evolve in the next few years—and the role that new technologies will play in that evolution—involves some guesswork. At the same time, you can make some informed predictions based on recent trends. 

At the end of the day, the transformative power of AI isn’t likely to pass the building materials distribution space by. In fact, it’s likely to have a serious impact on how last mile deliveries are conducted across the board.   

The Top Challenges in Building Supplies Distribution

If AI is going to make a real, sustained impact, it’s going to do so by directly addressing the issues that face delivery businesses. Consolidation at the top of the building supplies market is, quite simply, putting real pressure on other players in the building materials delivery space right now—and it’s exacerbating delivery challenges that already existed. 

Today, distributors need to find ways to get deliveries out the door quickly and accurately in spite of last-minute ordering, chaotic job-site schedules, and even ambiguity about where the delivery site is (in cases of new construction that might lack verified addresses). At the same time, customers have stringent expectations around delivery experience, and they want more than just speed—they want transparency before, during, and after. 

This essentially requires a smart, digitized last mile delivery process. Distributors need to be able to instantly see their inventory and delivery capacity, then match the right orders to the right vehicles and drivers. You need to find a way to ensure quick turnarounds for most of your orders without running your trucks half-empty. Then, you need to keep customers informed throughout the process, track your deliveries as they’re undertaken, and capture robust proof of delivery to ensure a complete audit trail for every delivery. 

Crucially, you also need to deliver on time. When contractors are depending on just-in-time deliveries to keep their schedules on track, you don’t want to be the reason they have to delay. When you’re able to help things run smoothly at the job site, you can boost your delivery NPS and ensure increased customer satisfaction.  

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How AI Will Impact Route Optimization in Construction Materials Distribution

Based on the challenges facing construction material distribution outfits right now, it’s not too hard to imagine why effective route optimization is such an important key to success. Building the right routes—those that have the right orders going on the right job sites at the right time—can be a challenge under the best of circumstances. It’s hard to see what capacity you have available, and it’s even harder to predict when the delivery driver is going to reach a given site. 

This is one of the areas where AI is already making an impact. Simply put, AI has the ability to generate highly accurate delivery ETAs by factoring in a host of variables that go above and beyond what a human planner could grapple with while planning routes. 

The key here is that AI does this quickly—usually in a matter of seconds. This does more than just improve the accuracy of your delivery ETAs, it actually transforms the route optimization process into something with considerably more strategic value. It becomes a way to add value and further optimize delivery plans up until it’s time to execute. Instead of acting as a blocker for last minute requests, it gives you the freedom and agility to make bigger, bolder promises to your customers—and execute them successfully. 

Here’s an example of what we mean:

Let’s say you’ve got your delivery cutoff at 2 pm the day before delivery so you can spend a few hours routing for the next day before close of business. That’s not too bad, and most orders will be easy to handle—but when the later orders come in, you still have to find a way to accommodate them. 

Unfortunately, you’re not able to easily slot the order into your plans without wreaking havoc on your existing routes. You fuss for a while for something that’s somewhat workable, but you wind up running a truck that’s half empty. You’ve kept the customer happy, but your cost-per-delivery has gone up and your schedule has been thrown off. 

With AI-powered route optimization, you can move your cutoff time back, since routing is that much quicker. And even when orders come in beyond that time, you can reoptimize as needed without losing out on efficiency. All the while, you’re able to accurately predict when deliveries will arrive, meaning that you’re able to ensure a great delivery experience and help your customers keep their project schedules on track. 

That’s the power of AI in route optimization. 

AI and Machine Learning in Customer Delivery Experience

When we look past route optimization, the next frontier for AI and machine learning to be applied could potentially be delivery experience. Of course, the way AI is used in routing also has an impact on customer delivery experience: by improving the accuracy of your ETAs, AI empowers you to deliver on time. All the branded communications and live tracking widgets in the world can’t help you if you’re not able to deliver on time consistently. 

But what about things like AI powered chatbots and other trendier AI applications? Sure, there’s a place for them—but they have to be rolled out deliberately. There’s always a risk that something like an AI powered chatbot is going to frustrate your customers more than it helps them. 

Of course, there’s also areas like smarter voice-to-text technology that will work their way into last mile delivery workflows. This can help drivers communicate more quickly with both customers and dispatchers, smoothing out the entire process from end to end. 

The trick with this is to make sure you’re looking at real, proven AI-powered technology that’s designed for use cases that are rooted in actual business needs. There’s a lot of new and shiny things out there, but not a lot of technology providers that are leveraging AI in a deliberate way that’s aimed at core delivery challenges. AI will most likely have an impact on customer delivery experience in the long run, but technology being implemented for its own sake isn’t going to make a dent in building supplies distributors’ KPIs. 

Building supplies distributors face real challenges when it comes to delivery—and those challenges aren’t going to be solved with the right technology. With the emergence of AI applications for things like route optimization and other key logistics areas, there’s tremendous opportunity for businesses in the building supplies space to become more competitive and more constantly delight their customers. That starts with finding the right partner with whom to implement new and emerging technologies.

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