The use of Artificial Intelligence is no longer an option. It isn’t an experimental technology. Your competitors are already using embedded tools to improve productivity, provide better customer experience, and forecast more accurately. It will soon become imperative to implement AI to stay competitive and improve profitability. The future is here. Right now.
Step one: strategy and understanding
It is critically important to develop an AI strategy for your company. Most businesses don’t really know what AI can do in general or for them personally. The first decision is to determine whether you have someone on your staff who can identify the opportunities. If you don’t have this person, then seek out a professional AI consultant. They’re trained to provide insight, and many offer assessments to help you develop AI strategies. Some of the value drivers of implementing AI in your business are: productivity and efficiency; profitability; operational complexity; data management; reduced mundane tasks; administrative and customer service support; security, risk management and compliance; innovation; and better decision-making.
AI strategy is not a list of technologies but focuses on your business priorities. It identifies revenue growth opportunities, margin improvement opportunities, workflow automation targets, and customer experience improvements. In my experience, many companies don’t develop detailed, focused strategies. Strategy turns into goals and provides direction to your team.
Example: A plumbing distributor may discover that their biggest opportunity is not a custom chatbot for customer service. But what they have discovered is that it’s providing contractors with timely and accurate quotes. AI can deliver immediate productivity gains and sales opportunities. The faster quote turnaround increases win rates. AI can provide guidance for offering product substitution and product bundles.
Step two: gather data
Clean data is the heart of AI effectiveness. Some data, such as clean customer lists and product specification sheets, may already be available. Start with your ERP systems data. But first, you’ll need to collect additional data, including customer types and reasons for discounts. To achieve truly effective AI, you’ll need data beyond your day-to-day transactions. You’ll also need decision data, such as the number of times a customer calls before placing an order, and why a discount was applied to an order.
Decision data is why it was purchased. Transaction data is what was purchased.
Example: A distributor’s data includes sales history, but for AI to work more effectively, you would need to add customer segmentation and margin tracking. Advanced data would map customer behavior, workflows, and decision data.
Step three: map workflows
Have your team map all existing workflows. Identify the bottlenecks and redundancies. Evaluate effectiveness and identify areas for optimization. Determine time and cost savings for clients. Include best practices for managing sensitive information. Have each team member document their existing workflows and identify which workflows take up the most of their time. Ask them where they think AI automation would be most valuable.
Workflow specifics
People involved and their roles
How information or input is received to initiate the process — Triggers
Decisions or judgments made during the process
Points where input or approval from others is needed
Common problems, bottlenecks, or exceptions
Output or deliverable produced at the end of the process — Goals
Method for ensuring output quality and accuracy
Frequency of workflow execution (daily, weekly, monthly)
Time required for each step and overall processing time
Workflow documentation and tracking methods
Regulatory and compliance considerations
Where to start: decision tied to strategy
Identify high-value workflows aligned with your business strategy. Pick one and design a new workflow by using AI tools or creating AI agents. There are many tools available today for building AI automation workflows. Don’t try to eat the whole elephant. What would give you the biggest bang for the money? Which workflow would increase productivity, reduce costs, improve accuracy, and enhance job satisfaction?
Step four: start with a pilot project
Many companies fail at AI implementation when they try to do too much too quickly. The key to success is starting with the right pilot project. Attributes of a good pilot project are a frequent workflow, clear ROI, easy integration, and measurable time savings. Your staff must see the visible benefits.
Examples:
1. You’ve identified that the same questions are repeatedly asked of your customer service team. They’ve compiled these questions and answers in a spreadsheet. And now you would like to deploy a chatbot on your corporate website to answer these questions. There are various tools that will walk you through setting up and customizing this chatbot for your company and its products. I’ve shown small companies how to create this and implement it on their websites for little to no cost.
2. If you have a PDF of your current catalog, you can upload it to a large language model (LLM) and allow the customer to search for specific product categories or products. You can also upload any product specifications for them to review. This can be used both internally and externally.
3. Identify customers that have become dormant. AI is installed to identify dormant customers and run a reactivation campaign. This could be an automated email, text message, or meeting setup.
4. A quick way to improve sales conversion is to have AI identify quotes older than three to four days and compose a personalized follow-up email or text message. The messages can be approved by the sales associate before they are sent to the customer.
Tools vs. AI agents
You probably already use AI tools such as Grammarly and Google Search. AI tools are single-task automations that make simple decisions based on the context provided. Grammarly identifies a misspelled word and shows you the correct spelling.
AI agents are ongoing systems that monitor data, trigger actions and learn from outcomes. They can string together many AI tools and orchestrate them. The development of AI agents has exploded in the last year. There are now many AI companies that you can use to set up your own AI agents by simply verbalizing what you want them to do. Many modern AI platforms now allow business users to design an automated AI agent, eliminating coding and drastically lowering the cost of bringing AI to your business.
Example: The chatbot on my website is an AI tool. It answers questions about my experience and product offerings. I could upgrade my chatbot to become an AI agent that can determine whether a customer is current. It could pass that information on to another AI agent that could review the existing customer’s purchase information and access my appointment calendar. It can remember the last time the customer chatted and use that information to ask additional, tailored questions.
Organizational readiness
I’ve been in the plumbing business for most of my life. My father was a plumbing contractor in Buffalo, New York. I had many conversations with him about new technology and innovation in our industry. He was averse to implementing new technologies, as many contractors are — people who continue to use and purchase what they know has worked for them in the past. My father impressed upon me that your reputation is everything, and that perhaps applying new and unproven products and systems could harm it. But things move much faster now. While change is still slow in our industry, I believe it’s imperative to begin preparing your teams for the rapid change that is here now.
Explain to your team that they should embrace the new opportunities available to them. Assure them that you are there to help. Begin training and educating staff, informing them that you will be redefining roles. Set expectations and clearly define workflows. AI is an assistant, not a replacement for workers. It will create many opportunities.
Form a small team representing operations, sales, IT and customer service that meets frequently and identifies one workflow at a time that could transition to AI use. Analyze the AI adoption workflow and monetize the resulting savings.
Measuring ROI
This is where the rubber meets the road. These are the results of implementing AI in distribution to maximize your ROI.
Time saved per workflow
Increased order frequency
Reduced manual errors
Faster response to customer inquiries
Higher rep productivity
Reduction of outsourced labor — for example, marketing brought back in-house
Employee satisfaction — reduced mundane tasks
Start dissecting current workflows. How long does it take to complete each task? Monetize each step in the workflow. Where are the biggest savings by implementing AI tools or AI agents? Don’t forget soft savings, such as employee and customer satisfaction.
Example: If an inside sales team member saves 30 minutes per day with AI-assisted quoting and follow-up, that adds up to approximately 125 hours per year. Multiply that across five employees, and you begin to see how productivity gains compound quickly.
The future is here now
The benefits of AI are clear. If you’ve already tried implementing some AI into your workflows but you haven’t noticed its effectiveness, begin by following these steps.
1. Start with strategy
2. Build a diverse AI team
3. Improve, add, and clean your data
4. Map your workflows
5. Choose a pilot
6. Measure the results
7. Build from there
The plumbing and heating industry has always evolved. My father believed copper and solder were the only way to join pipes. But materials, codes, and tools change. AI in distribution for all workflows is here now. Start by understanding your current workflows and their cost. Clean and add to your data. Choose a target and automate one workflow at a time. Calculate your ROI, because margins are tight and competition is fierce. As an award-winning sales leader, I treated customers as kings. How much larger would your sales be if quotes were timely and accurate, follow-up was consistent, and inventory was aligned with accurate demand?
It’s time to begin.
Cliff D’Angelo, owner of Greencliff LLC, is a consultant and coach to the industry and a 30-year, award-winning veteran of the trade, having worked at both Kohler Co. and Ferguson Enterprises. He is a certified LEED AP Legacy, certified AI-assisted consultant, contributing columnist for The Wholesaler magazine, and developer of The Leadership Academy. He can be reached at [email protected] or 407-459-0053.
