Facing the Forces of Change

The business world is moving too fast, and wholesaler-distributors must be informed, intelligent, and nimble 

Given the lingering uncertainty in the economy, wholesaler-distributors must continue to take decisive actions that will position their companies for growth and prosperity.  Gone are the days of overly cautious and slow decision-making processes.  The business world is moving too fast, and wholesaler-distributors must be informed, intelligent, and nimble enough to make rapid but prudent decisions, and then adjust and iterate as necessary.

The successful distributor  must understand the economic challenges that lie ahead, the expanding role of services and their importance; the value of analytics as a tool to help distributors stand apart, better serve customers and prepare for future demands; the value of "human capital", the vital and ever growing role of IT.   Distribution must also be able to understand and embrace the two growing trends shaping the industry; the "green" movement and the growing role of government.

ACTION POINT: Be informed, intelligent and nimble to act decisively with prudence.

Trends: Emerging and Future

...the growth of the green business segment and the expanding role of government.

Distributors must understand the trends facing their business today as well as what lies ahead.  The recent trends that have shaped where distribution is today include, acquisition activity, the changing U.S. workforce and a slowdown in commodity prices.

The two key  trends that distribution must recognize for future success are the growth of the green business segment and the expanding role of government.

ACTION POINT: Understand the underlying trends that affect the distribution business.

The Value of IT

IT is not a separate part of the organization, but an integral part of the distributor value proposition.  

Distributors have long been investors in differentiating technologies, especially in the supply chain and in particular, in the warehouse.  What has become abundantly clear, however, is that IT is no viewed as an essential component of a distributor's business--an enabler of the company's growth strategies, a tool to help capitalize on the complexity of the uncertain economy, an accelerator of core business processes, and a weapon of competitive advantage.  

Distributors must craft and IT strategy that positions them for the future (managing complexity, reducing costs, and enabling growth) and is aligned with their business strategy.  IT is not a separate part of the organization, but an integral part of the distributor value proposition.  

ACTION POINT: Strong leadership, business knowledge, and innovation must be hallmarks of the distributor IT function, positioning the company as not just "easy to do business with," but the preferred solution provider and business partner.

Human Capital

Distributors face some unique challenges as they...embrace the next generation of employees; and leverage the skills, talents, and knowledge resident in the existing workforce.

The importance of effectively managing the the workforce continues to be a critical skill that distributors must master.  Distributors face some unique challenges as they look to capitalize on emerging business trends and technologies; embrace the next generation of employees; and leverage the skills, talents, and knowledge resident in the existing workforce.

A heightened focus on training will be key as well as new approaches that will be required to identify and encourage top performers, along with the tools that can maximize employees impact across a range of functional areas.

ACTION POINT: Never underestimate the importance and value of your human capital.

Differentiating with Analytics

Distributors must master the vast amounts of data flowing into and around their organizations, leveraging the available information to create actionable insights.

Analytics will play an absolutely critical role in effectively and efficiently managing a wholesale distribution business going forward.  Distributors must master the vast amounts of data flowing into and around their organizations, leveraging the available information to create actionable insights.

Look at customer segmentation, cost-to-serve analysis; price, inventory, and optimization.  Distributors can also look at Lean and Six Sigma concepts to reduce waste and inefficiency, while at the same time innovating and delivering exceptional service to customers and suppliers alike.  There are two types of complexity within this area--one that is essentially non-value added, non-differentiating and should be reduced or outsourced where ever possible; the other is complexity that creates a meaningful point of differentiation with customers and/or suppliers.

ACTION POINT: Identify and work with the data that will deliver meaningful differentiation for your customer and vendor partners.