The U.S. wholesale distribution sector has long been a complex and fragmented industry, with many companies relying on legacy systems and spreadsheets to manage their operations. However, this approach can lead to inefficiencies and inconsistencies, resulting in lost margins and operational complexity. The recent acquisition of Merlin by Augment marks an important milestone in the development of supply chain AI platforms, which are designed to streamline distribution processes and improve customer satisfaction.
The deal brings together a team of experienced industry veterans, including Alex Moazed, who joins Augment as president of wholesale distribution, along with co-founders Nick Johnson and John Schumacher. This strategic move gives Augment its first foothold in the $8 trillion wholesale distribution sector, which is a significant step towards establishing itself as a major player in this industry.
According to Harish Abbott, CEO of Augment, one reason behind the acquisition was customer demand. Freight brokers and carriers kept asking Augment whether the platform worked with distributors, their biggest customers. This highlights the growing importance of collaboration between supply chain technology companies and their customers.
The acquisition also brings a unique perspective on distribution industry challenges, courtesy of Moazed's experience as co-founder of Merlin. As a former head of AI at Grainger, he has seen firsthand the impact of fragmented systems and inconsistent product language on enterprise distributors. His insights will be invaluable in shaping Augment's strategy for this sector.
The Case For A Purpose-Built Distribution AI highlights the need for specialized solutions that can handle the complexities of B2B distribution. Moazed argues that generic AI tools fail to address unit conversions, customer-specific SKU language and exception-heavy workflows, which are common challenges faced by enterprise distributors.
Distributor data is a competitive moat, and many companies resist shared-data AI models without realizing the benefits they could provide. Augment's platform, Augie, uses agentic AI to follow standard operating procedures written in natural language rather than custom code, offering a more efficient and cost-effective solution.
The acquisition augments existing efforts by Augment to develop its supply chain AI platform. With Merlin on board, Augment is well-positioned to address the needs of the wholesale distribution sector and provide a more comprehensive solution for customers.
As Moazed notes, previously customizing workflow automation required a small army of engineers writing code. Now, with Augie, the incremental cost of customizing workflow automation is headed towards zero because you are writing a process document in English and the AI agents are actioning the work alongside human teammates.
The strategic move by Augment into the wholesale distribution sector marks an exciting development for supply chain management and logistics. As AI continues to play a larger role in this industry, companies like Augment will be at the forefront of innovation and transformation.
The acquisition highlights the growing importance of AI in supply chain management and the need for purpose-built solutions.
