The May 10, 2014, issue of MDM kicks off a series of articles on disruptive technologies.
While it’s easy to point to a handful of technologies that have transformed the business world over the last half century, a McKinsey & Company report, “Disruptive technologies: Advances that will transform life, business and the global economy,” cautions readers who may view every new technology that emerges as the “next big thing.”
But there are some technologies that truly will disrupt the landscape that distributors operate in. In this series, we look at:
- 3-D printing
- Augmented reality
- Delivery innovations including drones and driverless cars
- Robotics in distribution centers
While our focus is on these four key areas, think more broadly than that when contemplating the next frontier. Other technologies already in play or on the horizon that may affect your business or your customers’ businesses (just as important) may include renewable energy, new ways to store energy, the cloud and the Internet of Things.
While we are calling the subject of this series of articles “disruptive technology,” the truth is technology is only as disruptive as you allow it to be at the local level. Computers themselves were disruptive when they first arrived. Now most people are surprised if a company doesn’t have at least one.
Challenges come with any innovation, not the least of which is cost, training, standardization and integration into current operations and processes. Despite these, distributors should look at these technologies and examine the potential impact on internal processes, suppliers’ businesses and customers across industries.
The McKinsey report recommends business leaders think about emerging technologies this way:
Update your strategic plan with emerging technology in mind.
Use technology to improve your internal performance.
Evaluate how the technology shifts the value you provide, as well as the value driven from manufacturer to distributor to end-user.
Think outside the box about risk and competition and where it will come from.
Think about talent. As with any technology, you may not need the skills in-house now, but will you in the future? What does that work force look like?
A Harvard Business Review article by Clayton Christensen and Maxwell Wessel encourages leaders to identify their companies’ strengths, as well as the strengths of other businesses developing and adopting these emerging technologies. They also point out that even with the rise of disruptive innovations, such as those we’ll cover in this MDM series, businesses will continue to reap benefits from legacy applications for years and sometimes decades. An example in the consumer world that they provide: People still go to the movies, even though the ability to watch movies at home through a VCR was introduced a generation or more ago.
That doesn’t mean that distributors should rest on their laurels. Companies must balance the old with the new and adapt as needed.
Finally, one piece of advice that any business owner or leader should follow, according to the authors of Big Bang Disruption: Strategy in the Age of Devastating Innovation: Consult your “truth-tellers.” The authors say that leaders need to find “industry visionaries” who won’t sugarcoat the future, even if you want them to.
We have a handful of consultants in the distribution industry who are happy to tell it like it is. Distributors also benefit from having a board of advisors or directors filled with people from outside the industry; that outside perspective can help leaders keep their eyes on the present with an ear to the future.
Just as many distributors said they wouldn’t be affected by e-commerce just five years ago, but who are now scrambling to build a presence that fits their businesses online, these disruptive technologies have the potential to go mainstream and have enormous impact on the supply chain and operations of manufacturers, distributors and end-users.