Three ideas for the future of distribution
Can we create a future that goes beyond adjusting to the latest business trends, and instead uses innovation to transform societies and economies as well?
I am preparing for my annual participation in TWIN Global, a network of executives and change makers bent on driving world-class, sustainable innovation—and I'm seeking help from my readers, especially the most curious and passionate among us. For me, TWIN is an opportunity to build on trusted relationships that have been built over time, on a shared commitment to discovery, serendipity, and impact. I've heard TWIN's chairman and co-founder, Rob Wolcott, say that questions are more interesting than answers, so this edition offers three ideas about B2B innovation and the future of distribution, posed as questions, with a brief explanation. I ask you to read them, share your thoughts and experiences, and help me understand the most interesting questions that might lead to the most influential innovations. Let's arrange a call sometime in the next few weeks if you want to chat live.
Introducing proximity for innovating distribution
TWIN Global will focus on "proximity" as a North Star for guiding innovations this year. In a discussion with Kaihan Krippendorff on his Outthinkers podcast, Wolcott reflected on two important issues: his passion for exploring how technology can drive changes in life and our world, society, and business, and looking for the underlying dynamics that break through the hype to create unprecedented value. He offered this explanation of proximity:
I realized from thinking this through that digital technologies allow us to distribute sensing access to data analytics, creating agency at smaller and smaller levels all around the economy, ever closer to each moment of potential demand. What digital technologies drive across all industries is the production and provision of products and services ever closer to the moment at which they might be demanded in time and space. … Business is about satisfying desires, perhaps creating desires and demands, but providing supply for the demand. And over time, what digital technologies enable is for us to more and more effectively, efficiently, economically, drive the production of products and services closer to that moment where they're actually demanded. [Emphasis added.]
Distributors are in a uniquely powerful position to embrace proximity because the ultimate purpose of distribution is to help customers do their work better, at the places where customers work. For example, distributors may replace inventory stocked in warehouses in anticipation of needs, and leverage 3D printing to manufacture products in the field whenever a need occurs. Many more examples are possible, because every point at which distributors impact a customer’s job performance, operational efficiency, sales growth, and wealth creation is an opportunity to apply proximity for new and radical outcomes.
Embracing Wolcott’s insight that questions are more interesting than answers, I offer that distributors can lead if they ask the right questions. At TWIN Global, I will listen for innovations inspired by proximity and apply them to three questions that aim for the stars—imagining a future for distribution that goes beyond adjusting current business models for competitive advantage, but instead stepping up to help our societies and economies achieve a bold and bright future. Here they are:
Can distributors help customers innovate, and communities thrive?
Even in the digital age, distributors remain intensely local businesses, operating branches in communities, staffed by people who live and work where their customers live and work. By acting as an innovation intermediary, distributors may go beyond adding value to products to bring knowledge, resources, and funding to help customers transform for the digital age. By scaling these efforts to work horizontally across industries and trade lines, distributors may help communities transition to a distributed power and renewable energy grid, optimize logistics and transportation performance, strengthen opportunities for skilled and nomadic workers, accelerate smart city initiatives, attract new companies and set up new operations, and more.
Can distributors help owner-operators leverage data and artificial intelligence?
Independent businesses—including restaurants, salons, contractors, grocery and hardware stores, truckers, and more—are the heart and soul of every community and the backbone of the economy. But they lack the scale necessary to leverage state-of-the-art machine learning, artificial intelligence, and automation tools. As a result, many owner-operators are scaling up by selling out, accepting buyouts from acquisitive corporations.
Distributors may step up by inventing a new form of "master distribution"—a model not designed to offer added-value products but to create value by aggregating information and offering data-based services. As this new type of intermediary, distributors might partner with software companies or cloud service platforms to store and pool owner-operator data. The goals would be to enhance critical decisions, including locating or expanding facilities, introducing products or services, managing energy costs, hiring, upskilling, and retaining employees, and more.
Can distributors build a supply chain that is not just resilient but also responsive and regenerative?
As intermediaries that deliver products to customers, distributors are considered the last mile of the global supply chain. But they can be much more. Distributors are the sensing end of the supply chain, working with customers to leverage data, forecast purchasing needs, optimize costs, mitigate risks, and overcome the shock of pandemics, extreme weather, natural calamities, and geopolitical competitions and conflicts. By leaning in to help customers innovate and communities thrive, distributors respond to needs and aspirations and create new customer experiences to serve them. By assisting skilled workers and owner-operators in transforming for the digital age, distributors are regenerating societies and economies.
All of this adds up to cast distributors in a new supply chain role as intermediaries that are the "sensing end" of the supply chain, helping it create value that goes beyond efficient and resilient delivery to become responsive to the desires and demands of sellers and buyers—companies large and small, in global, regional, and local economies. Distributors can help be a force for change in helping societies live through epic times, transform digitally, and flourish.
Foresight and footsteps
TWIN Global 2023 happens on June 1-2 at the Royal Institution in London. As always, the event is for members (known as TWINians) and invited guests. For me, TWIN offers a wide lens on what is possible, and what is being achieved. The event is attended by a few hundred members as well as speakers, panelists, and artists, all contributing their ideas, experiences, and energies through presentations, panels, workshops, side conversations, performances, and networking. Members include accomplished innovators from business, technology, and the sciences; storytellers and documentarians; government policymakers; educators; think tank leaders; and artists. TWIN is always a source of ideas and inspiration for newsletter editions, and this year, I hope for my work with industry associations and their members, as well.
Please send me your feedback, ideas, and support in the comments below or by scheduling a call for a deeper discussion. As always, I am reachable at firstname.lastname@example.org.