Quick Take: AI for value chain partnerships

Can manufacturers and distributors use AI to forge stronger bonds and invent new digital-age collaborations?

Innovating for the digital age

I am presenting at MDM’s 6th Annual Sales Transformation Summit in June. My discussion is about innovating the value chain for the digital age. Looking for fresh ideas for the future of the manufacturer/distributor partnership, I found an excellent article,  “The Future of Customer Service Is AI-Human Collaboration,” published by MIT Sloan Management Review and written by P.V. Kannan and Josh Bernoff.

Reading the article, I wondered if disintermediation is destiny? Digital transformation by both parties is weakening the long-standing value chain partnership. Are other outcomes possible? Can digital technologies, especially artificial intelligence, drive closer collaboration, resulting in improved customer experiences and mutual benefits? This passage provides a starting point:

Our combined experience in customer strategy and running a company that helps build virtual agent systems has demonstrated two fundamental—and counterintuitive—facts about customer service and automation.

First, the most significant gains from virtual customer service agents are from improvements in customer experience, not cost savings.

And second, successful virtual agent systems depend on bots working with humans, not replacing them.

Digging deeper, Kannan and Bernhoff argue that the future of customer service is human-machine collaboration, seemingly pointing to the application only within organizations. I share these ideas below, adding my thoughts on how they might be executed in a new digital-age partnership between manufacturers and distributors, across organizations:

• Bots can save human agents time. Distributors have long offered suppliers more significant numbers of feet-on-the-street by deploying customer service reps and salespeople to support manufacturers’ products. Manufacturer investments in e-commerce platforms and AI chatbots might see greater returns by building a platform that includes distributor human assets, codified in updated distributor authorizations and channel compensation programs.

• Bots can make human agents smarter. Distributors have long struggled to master deep knowledge across all the products and brands they represent. AI can address this challenge, making distributors’ customer service and salespeople more effective. This approach is not a one-time gain, but an ongoing initiative to maintain up-to-the-minute knowledge. This can be implemented with metrics to ensure a virtuous continuous improvement cycle to achieve optimal sales and marketing results.

• Bots can improve with human supervision. This idea points to a human-to-human collaboration between manufacturers and distributors. Supervision of AI tools might become a collaborative effort, shared by first-line supervisors. I can imagine routine meetings on a biweekly or monthly schedule. Distributor customer service and sales managers would provide frontline feedback from customer conversations and competitor actions. Manufacturer managers would respond with immediate advice and incorporate new intelligence into AI algorithms, marketing messages, social media, and more.

• Bots can free up people to work on more interesting challenges. This benefit goes to customer service reps and salespeople at manufacturers and distributors. Freed-up time might be dedicated to future innovations through collaborative work designed as workforce ecosystems. Other newly freed time might be devoted to ongoing education, professional development, and networking between distributors and manufacturers. Building a collaborative community, the manufacturer/distributor partnership might be strengthened with a new and shared purpose, leading to additional digitally-enabled collaborations.

Your take?

The manufacturer/distributor partnership needs a jolt of change to kickstart conversations and planning. In the spirit of this week’s Deep Dive, I wonder if a moonshot collaboration sponsored by a leading manufacturer brand or leading distributor association might publicly drive for a big change. Or perhaps a “loonshot” is possible, pursued by a rebel supplier or distributor.

Do you agree? Can you share plans or examples? Please share your comments below or reach me at mark.dancer@n4bi.com.