Distributors have faced numerous challenges recently, including major slowdowns within industry sectors they serve, and losing business when manufacturers develop programs to sell directly to customers.
Wholesalers-distributors serving the two strongest sectors, construction and consumer goods, had greater opportunities than those serving volatile and commodity-driven sectors, such as oil, metals, mining and food.
Per the National Association of Wholesale Distributors (NAW) (1), Total Wholesale Trade for 2015 totaled $5.35 trillion, down 3.6% from 2014. Even so, employment increased by 61,000 jobs in 2015 to 5.9 million jobs.
Future Growth Drivers
Building future growth will require distributor investments in new technologies, collaboration with manufacturers, and increased internal innovation.
It’s also important to increase Human Resources’ strategic role in your organization. Include them in decisions specific to future talent needs – functional areas, levels, experience and specialized skill sets.
Adoption of technological advances is rapidly accelerating throughout manufacturing. Not all technologies are applicable. It’s critical to determine which technology-based investments will lead to increasing productivity, enhancing performance and fulfilling customer needs beyond those addressed by manufacturers.
- What areas of your organization most need improvement? What productivity or performance enhancements can you expect from investing in specialized technologies?
- What specific value will your organization be able to add of value to manufacturers and their customers by investing in specific technologies?
- How well do specific technologies fit with your current capabilities – and with future projections of high-value capabilities?
Connectivity is a key theme for future systems. How can you collaborate with manufacturers to fill gaps they identify as weak points to create a completely connected system? Consider hardware, software and services. Being a strong collaboration partner will pay off with manufacturers needing help to meet customers’ needs – and anticipate future needs.
Another powerful way to collaborate with manufacturers is to utilize the considerable customer data you have captured (or have access to), yet have not used. Utilizing new technology-driven analytics to turn your data into meaningful customer segments, and provide the basis for developing effective strategies for your company to collaborate with manufacturers who lack this insight, yet are working to identify and fill current and future customer needs.
To stay on top of the rapid advancements in manufacturing, increasing customer expectations and future opportunities where your organization is well-positioned to succeed will require not only an innovative mindset among a select few within your organization.
You and your leadership team will likely need to step out of your comfort zone to instill an innovative mindset throughout your organization. Innovation needs to become an integral component of organizational culture.
If this isn’t how you’ve operated previously, it’s critical to demonstrate you and your leadership team truly value their ideas and input. Examples of how ideas could be used will be helpful. Ensure you empower them to look broadly for ideas, and stress the importance of passing on any product or service feedback. Consider creating small groups for employees to share ideas/input with your leadership team. Develop an appropriate reward system.
Innovation is being fed by hobbyists, DIY makers and others who are very high-tech in their personal lives. Don’t miss out!
The rate of new technology adoption is highly unlikely to slow down. Considering that the technological transformation is inclusive of the Internet of Things (IoT), robotics, augmented reality and 3D printing – keeping up will be the challenge.
Consider each technology and it’s applications in the context of your business, strengths, and opportunities specific to the sectors you serve. Also consider the value of innovative changes to your business model.
Beaulieu, Alan, President, ITR Economics (senior economic advisor for NAW), and Murphy, Jon, ITR economist, State of the Wholesale Distribution Industry, National Association of Wholesaler-Distributors (NAW)
Guillot, Craig, Google’s Michael Walton Says Manufacturing Execs Need to Encourage a Culture of Innovation, Chief Executive, May 13, 2016
Gordon, David, Channel Marketing Group, Ray, Allen, Allen Ray Associates, 16 Distribution Industry Trends for 2016, Electrical Trends,www.electricaltrends.com, January 27, 2016
Bono, Robert, Pillsbury, Stephen, 2016 Industrial Manufacturing Trends, strategy&/PwC, 2016
Social Prospecting: What’s In It For Me?
Improper Risk Controls in Options-Based Strategies
Google, Facebook Admit Privacy Invasion. What’s Next?
Getting True Passive International Exposure
4 Ways to Keep Your Information Protected in the Workplace
How Do You Plan to Pay for Inflation?
Simple Ways You Can Work on Self-Improvement
Harnessing the Power of Data to Drive PR Success
Stop Trying to Destroy Your Team
Exploring Your Real-World Money Thoughts
Building Smarter Portfolios12 hours ago
Getting True Passive International Exposure
Development21 hours ago
How Do You Know Your Financial Advice Is Suitable?
FinTech21 hours ago
The Regulator’s View of Facebook’s Libra Currency
Development1 day ago
Pricing and The Importance of Loss
Development2 days ago
5 Reasons Why Clients Might Not Want to Refer You
Insights2 days ago
Are the U.S. and China Capable of Saying Sorry?
Entrepreneurs2 days ago
Lab Grown Diamonds: Where Business and Science Meet
Advisor Marketing4 days ago
What Regulation Best Interest (BI) Means for Your Firm’s Digital Marketing Efforts