Why This Matters to Distributors: Inventory management remains one of the most practical applications for artificial intelligence in wholesale distribution. While interest in AI is widespread, many distributors continue relying on spreadsheets because of cost and implementation challenges, leaving opportunities to improve inventory accuracy and reduce stockouts.
Interest in artificial intelligence for inventory management is growing rapidly, but adoption remains limited, according to a new survey released by inventory management software provider inFlow Inventory.
The company’s state of inventory management 2026 report found that 81% of warehouse and operations professionals want to implement AI in inventory or warehouse operations, yet only 11% currently use AI tools in their daily work.
The findings are based on a March survey of 400 warehouse, inventory, supply chain, and operations professionals across 33 industries. InFlow said it also compared the survey results with 4,000 customer interactions from 293 companies collected between February and June.
The survey found operators are most interested in using AI for demand forecasting and automated replenishment rather than chatbots or other general-purpose applications.
Interest in AI now matches the adoption rate of barcode scanning, with 81% of respondents reporting they use barcode technology. The report suggests AI has become a mainstream priority for warehouse operations, even as deployment remains in its preliminary stages.
Despite growing interest in AI, spreadsheets continue to dominate inventory management.
The survey found that 85% of respondents use spreadsheets as a primary inventory management tool, while 74% rely on spreadsheets as their only or primary inventory system without dedicated inventory management software.
Reliance on spreadsheets extends beyond smaller organizations. Among companies with 500 or more employees, 53% said spreadsheets remain their primary inventory management tool.
Although 92% of respondents said they are satisfied with their current inventory management approach, many continue to face operational issues.
Half (49.5%) identified inventory accuracy as the area most in need of improvement, while 44% reported experiencing stockouts at least once a month. Another 52% cited supplier reliability as their biggest operational challenge.
Respondents identified implementation cost as the biggest obstacle to adopting AI.
Among those considering AI, 62% cited cost as their primary concern. Only 21.5% questioned whether AI would deliver an adequate return on investment, making ROI the least frequently cited adoption concern measured in the survey.
Respondents reported cost increases across several areas of their operations.
Product and material costs, freight, and shipping each were identified by 23% of respondents as their largest cost pressure over the past year, followed closely by labor at 22%.
Two-thirds reported increases in both freight and material costs, while 84% said they buy inventory ahead of demand at least occasionally to guard against supply uncertainty, increasing inventory carrying costs.
For distributors, the findings suggest that interest in AI is increasingly centered on operational applications rather than experimental technology. Demand forecasting, replenishment planning and inventory optimization remain among the most sought-after capabilities, but broader adoption is likely to depend on lower implementation costs and easier integration with existing inventory systems.
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