Making connections: Creating an electrical and industrial distribution culture that welcomes change
Historically, electrical and industrial distributors have provided value primarily through the efficient storage and movement of goods. The sustainability of this classic value proposition, however, is in jeopardy, as an evolving customer profile, more complex products and operations, increasing competition and shifting economics are necessitating changes in the way distributors approach the market. Industry and economic events have certainly highlighted the profound challenges of being an inventory manager during periods of volatile demand, especially when supply chain visibility is less than perfect and significant lags exist in sensing those demand changes.
Electrical and industrial wholesale distributors must contend with increasingly complex and custom products moving upstream and downstream in a supply chain that is ever-more global, intricate and broadly scrutinized – yet one that has little cushion due to widespread adoption of just-in-time inventory and increased risk of obsolescence.
These realities demand a dramatically different type of distribution business. To remain competitive, electrical and industrial distributors must:
- Execute an expanded value proposition – Excelling at the traditional industry basics remains important but is no longer sufficient; leading distributors proactively craft and manage a strategic portfolio of products and services designed to differentiate their brands and forge deeper relationships with core customers.
- Become data-driven – Distributors that rely on paper-based processes and forecasts calculated in spreadsheets are losing to more nimble, information-driven competitors. Leaders use realtime data and automated solutions to generate a holistic view of the business and the supply chain, anticipate customer needs, have heightened visibility to demand and customer forecasts, identify opportunities and operate more efficiently.
- Increase business model agility – The capabilities necessary to deliver new and innovative services and operate at higher levels of efficiency will not always come from within. Leading distributors partner and collaborate, delivering greater value through targeted investment and application of scarce resources.
The potential for robust future revenue opportunities in the electrical and industrial distribution segment exists, but to grow and gain share in this consolidating industry, electrical and industrial wholesale distributors must develop differentiating capabilities that offer real value to their customers.
We're here to help
The future of the Consumer Products industry
About the Author
Guy Blissett
Consumer Products Lead
IBM Institute for Business Value
IBM Global Business Services