October 6, 2016 | Written by: Paul St. Germain
Categorized: Supply Networks
This is the first blog in a series of blogs revolving around Facing the Forces of Change®: Navigating the Seas of Disruption, published by the National Association of Wholesaler-Distributors (NAW) — the only major research study analyzing the future of wholesale distribution within multiple lines of trade. See all of the blog posts listed on this page.
Wholesale Distribution Treading Unfamiliar Waters
The wholesale distribution industry is at a watershed moment. Technological advances are creating massive upheavals, with industries converging, new forms of competition surfacing, and new business models emerging as never before. Wholesaler-distributors must navigate these uncharted waters and position their organizations to prosper in this disruptive age—a time when distributors are being bombarded by forces threatening to disrupt the way they conduct daily operations, serve customers, and interact with suppliers.
Disruption can come in different forms and from different directions, and it affects all sizes of wholesaler-distributors in all lines of trade. Just think of how the competitive landscape has changed over the last few years as start-up companies launch in relative obscurity in a specific market and now threaten to encroach on a wide range of industries, wholesale distribution included. In several cases, the disruptive company began in an industry that does not directly compete with wholesale distribution — for example the book sellers, the transportation business, and the hospitality industry — and then continues to expand offerings and add services that may compete with wholesale distribution in the not-too-distant future.
As these companies expand to offer products across multiple lines of trade and “the final mile to somewhere,” combined with low overhead, minimal infrastructure, and a penchant for exploiting the latest and greatest technology, these new companies are setting the stage to disrupt the business-to-business (B2B) marketplace.
Become the Disruption
Although these are challenging times, the level of change occurring in the marketplace now is providing new business opportunities as well. New online businesses continue to re-shape customer and service expectations, and as those expectations transition to the B2B world, forward-thinking wholesaler-distributors are finding ways to adopt and adapt those models to meet changing market needs. Perhaps the greatest opportunity in all of this is the chance to become the disrupter—a role both large and small distributors can fill in their respective markets, initiating disruption to the status quo. There are many paths to take on this journey, and many strategies that can be used to combat today’s disruptive forces.
In the upcoming edition of Facing the Forces of Change®: Navigating the Seas of Disruption, published by the National Association of Wholesaler-Distributors (NAW), some of the most effective strategies are outlined, along with examples, discussion points for management, and time-bucketed action items, all with an eye toward helping distributors find the best ways to thrive in a changing marketplace.
Pinpointing the Disruption
The market disrupters at work in wholesale distribution today are causing unprecedented change in the industry as they converge to barrage distributors from all sides. Whether in the form of competition from non-traditional business sources, new technologies that require large investments of time and money, or changing service models that are altering the competitive landscape in ways traditional distributors never imagined, these forces are here to stay and will only intensify.
In this edition, six disruptive forces that are shaping the wholesale distribution marketplace are examined:
- business disruption
- process disruption
- people disruption
- technology disruption
- mergers and acquisitions disruption
- government regulations disruption
Understanding how these forces may affect wholesale distribution businesses is key to surviving in this age of disruption. Being able to combat these forces, and at times embrace them, is key to thriving in this age and beyond.
In the upcoming edition of Facing the Forces of Change®: Navigating the Seas of Disruption, published by the National Association of Wholesaler-Distributors (NAW), you will find much more detail on all of these topics, including strategies and examples from leading distributors, along with suggested actions to understand and minimize the effect of disruption on a business, or present the opportunity to become a disrupter.
Stay tuned for the next blog that will look at each of the six disruptive forces in more detail, and upcoming blogs on other topics examined and discussed in the book.
Facing the Forces of Change®: Navigating the Seas of Disruption is available for purchase from NAW at: http://www.naw.org/ftf16, and will be available in November, 2016.