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What does the future of distribution look like?

(Image credit: Image Credit: NakoPhotography / Shutterstock)

The last 18 months have seen a radical shift in the way businesses operate. Both the Covid-19 pandemic and Brexit have forced many distributors to re-think their processes and relationships in order to keep up with the rapid rate of change. For example, coping with new post-Brexit regulations and paperwork requirements has made it much more difficult for manufacturers of certain goods to reach their traditional markets. On the other hand, businesses such as retailers have had to turn to different suppliers to continue operating.

Whilst this period has been a challenge for many, in some ways it has served as a catalyst for how companies imagine and even actualize the future of their operations. It turned the conversation towards digital transformation and the strategies needed to create a more integrated workforce, and how to achieve greater agility, speed to market and stability.  

Businesses now find themselves in an environment where there are multiple demand and supply stressors affecting supply chains worldwide. This has led distributors to consider more logical and innovative ways to help future-proof these businesses. As a result, the strategic roadmap calls for several fundamental changes.

Breaking down silos, advancing collaboration  

One of the single most useful steps distributors can take to ensure the longevity of their business is to recognize that people are the backbone of their company. This starts with cultivating an environment with a much more integrated and cohesive workforce, equipped with the right tools to make collaboration easier. A company that is broken down into silos is not able to co-operate effectively ultimately hindering attempts to meet customer demand and the possibility of new revenue channels. This is where a digital workplace strategy can help. By integrating the digital tools that employees use – email, channel-based messaging platforms, HR applications and virtual meeting tools – it is possible to break down communication barriers, transform the employee experience, and achieve greater efficiency and growth. 

The last 18 months have brought this into focus for businesses globally. At Westcon, an immediate pivot to a virtual work environment that enabled our employees to stay connected and focused across distributed work locations allowed us to commit to a ‘business as usual’ approach, deliver for our partners and ensure a continuity of service. People are at the center of our organizational performance and as a result drive our success. Empowering people with the right collaboration tools to solve business problems helps maintain and increase productivity. Last year, we found that these tools enhanced our abilities to work together and allowed us to remain as one cohesive team.

The rise of the digital supply chain  

The digitization and the use of digital technologies to transform existing business processes and drive customer engagement will be a critical asset of the supply-chain network of the future. Today, if your business isn’t designed and optimized for resilience in the face of severe disruptions, natural disasters and pandemics, then you are severely limited in terms of how you can meet the demands and expectations of your customers. You are also restricted when it comes to your ability to scale and grow. This is where digitization can really make a difference and will be the distinction between success and failure in the future. Data-driven digital technology that uses predictive analytics and forecasting increase visibility and control of the supply chain, delivering increased levels of agility and efficiency. Investing in early warning systems, IoT sensors, RFID, blockchain and track and trace today will provide real-time issue detection and impact analysis that ensures minimal disruption and maximum efficiency, speed and accuracy across the network. It guarantees future success and the ability to endure and remain relevant.

Automation and channel ecosystem 

Whilst many industries are still in the early stages of introducing automation into their processes, distributors should embrace it now to drive operational efficiency, improve business processes and allow employees to focus more on collaboration and innovation. The pandemic made a lot of companies re-assess human-led and human-reliant processes, business logic and workflows, and allowed them to think again about the roles that can be automated. The distribution industry should be no different. With worker’s time increasingly becoming more of a commodity, it makes sense for distributors to analyze the ways in which the core elements of recruitment, onboarding, enablement, co-selling, co-marketing, and management can be supported by automation. 

We have experienced firsthand how automation can deliver real operational benefits and at the same time lighten the load of our employees. In our warehouses, we have augmented human interaction by adopting autonomous processes and robotics. This approach helps us drive efficiencies through optimized inventory performance, warehousing and fulfillment. Best of all, it helps vendors receive their products quicker whilst reducing our environmental footprint.

People are paramount 

One of the most powerful ways to promote the long-term evolution of your business is to prioritize and invest in the well-being of your workforce. People are paramount, so it makes good business sense to be attuned to their needs and ambitions. By actively listening and integrating people’s ideas and suggestions into your strategy, it’s possible to nurture a happier, more collegial work environment where everyone is a stakeholder. Data suggests that when employee engagement increases there is a corresponding increase in employee retention by up to 87 percent. A high turnover of staff will mean that progress is frustrated, so if it can be avoided it should. By giving employees the training, they need now, it contributes to a sense of personal fulfillment, and they will also be empowered to meet the challenges of tomorrow head-on. At Westcon, we recognize that we need our best people, and the resources in place to enable them to deliver. That’s why it is essential to invest in their well-being so that when the time comes to step up, they can put their best foot forward. 

The path towards the channel’s sustainable future 

The cause of sustainability is something that every industry must consider. This is particularly true for the distribution channel as the dissemination goods – including hardware and software - relies on the transportation industry with the associated implications on fuel consumption, pollution, and other environmental impacts. Optimization in this sense (traveling salesman route optimization, hub distribution and more) makes for a more sustainable industry. This can be aided by technology to analyze and support to find the ‘least resource intensive’ paths across the distribution network. 

Current policies exist that respond to environmental challenges encouraging greater collaboration between vendors and partners to be more integrated, thereby reducing waste and energy consumption. The offer and adoption of Technology-as-a-Service, asset management, sparing and reverse logistics will all drive sustainability and accelerate the circular economy. Whilst this is a positive first step to help address the climate crisis, it is only a microcosm of what needs to be achieved. The channel community as a whole needs to show leadership and guide the industry to a greener, more suitable future.

As part of the distribution channel ecosystem, we hold ourselves accountable when it comes to the question of protecting the environment. Partnering with a sustainability ratings provider has been really useful as it has helped us stick to our sustainability targets. We are able to keep a close eye on the overall impact that we are having on the environment with the help of a scorecard which we track to keep us within our limits.    

The preponderance of the human element in the future of distribution suggests that investing in its people and skills will remain a key component of a sustainable business. Digitization and other technological advancements help to augment worker’s abilities and skill set. One of the few positive things that the pandemic has provided is the opportunity to demonstrate empathy for one another. Empathy, understanding and emotional intelligence are the kind of human skills that make us strong and resilient. Demonstrating the willingness to go above and beyond to help your vendors and partners move forward, whilst supporting your own people – is the core competency for the distribution channel of the future.

Antony Byford, Managing Director, Westcon UK & Ireland (opens in new tab)

Antony Byford is the Managing Director at Westcon UK & Ireland. Antony has been in channel sales for over 26 years, building and developing successful business practices across the vendor and distributor arena.