As we progress in our respective industries, we need to be open to, as well as able to, make the changes that are necessary to adapt to the current market. It should be obvious that the world is dynamic rather than static, and if we are not looking ahead, we will be left behind. I am quite sure that many carriage-makers in the early 1900s, who could not embrace the new technologies that evolved into the automotive industry of today, are merely a footnote in our history books. Those who did embrace the changes found that they now had a market open to them that was vastly different and much broader than what they knew previously. In 1884, there were 150,000 horses in New York City and 4,000 carriage-makers in the Northeast; in my search for information, I could only find 161 companies within the United States and Canada that produce carriages or parts for carriages today.
As part of the supply chain to industry, we have found that change is constant, and we need to be attentive to those changes. The traditional distribution model that has been in place for decades was already in the process of change; there will be an acceleration of those changes as we move ahead. This is something to take note of for both small, local distributors and large, national distributors. For smaller distributors, it may be that the focus will change to be more on technical support and consultation rather than distribution; for the larger distributors, it may be that the focus becomes that of solving problems and finding solutions, which will require a greater technical knowledge than was required previously. This is in large part a response to the current COVID-19 crisis; the plants will be more restrictive than ever before and that will affect distribution chains, not to mention revenue streams.
The view of some, often with good reason, is that large distributors are “catalog houses.” If they are indeed catalog houses, and if they continue to operate in that manner, their long-term prognosis is not good—particularly with the advent of readily available product via the internet. The large distributors need to have technical expertise available to them so that they are providing more than just product; they should be providing solutions as well. Change is not always welcome, but it is necessary; both smaller and larger companies have to adapt—in different ways, of course—as they face different challenges.
It has been said that change will not occur until the cost of staying the same is greater than the cost of change. While I believe that to be true, the challenge is in being able to calculate those costs. Now is the time to evaluate where we are in terms of our own unique situations. As a smaller distributor, will you have access to the plants in the same way that you did previously? As a larger distributor, will you be able to provide solutions, not just product? What are the changes that you need to make now, to prepare for the future? Manufacturers and other businesses up and down the supply chain are asking themselves similar questions regarding adaptation, and the distributors who have adapted will be in the best position to assist. In fact, open-minded and forward-thinking distributors often work with each other, which benefits the customer receiving the products or services.
It is very easy to build silos rather than bridges; it may be that some of the infrastructure that needs renovation is the entire basis of the traditional distribution model. Taking this to another level, I saw a word recently that encapsulated some of these changes: “disintermediation.” This is the model where manufacturers go directly to the end user, completely excluding distribution. The problem with this is that for the most part, manufacturers do not have the ability to deal with the issues that arise, particularly on a technical level. They typically do not have the resources necessary to support that structure, and it has been tried unsuccessfully, many times. I am quite sure that if they could have made it work, it would already be done.
Now that a new door is open, it seems to be time to look behind it to see what opportunities are there. Yes, there are new opportunities for all of us if we look for them and recognize them. I have been amazed at the flexibility that some companies have displayed during the COVID-19 crisis; distilleries producing hand sanitizer, gun manufacturers producing PPE, GM making facemasks, Zoom accelerating to the forefront, and Sleep Number repairing N-95 surgical masks!
What is the legacy that you want to leave behind? I doubt that any of us wants to be a footnote in the industry pages of history that says, “They used to be good at what they did.” We need to work together to find ways, not just to survive, but also to thrive. I am confident that we will come out of this much stronger than ever before, but it will require a new mentality and a way of connecting resources, even while practicing social distancing. Together, we can solve problems, not just provide products.
