What will distribution look like in five years?

We put that question to four CEOs of some of the largest wholesale distributorships in the country during an online Webcast produced in conjunction with the National Assn. of Wholesaler-Distributors last month. Their answers to that question, as well as several others we posed, offer a unique perspective on changes taking place in the distribution marketplace. (You can tune into the Webcast by logging onto our Web site at www.inddist.com.)

The four executives were Steve Kaufman of Arrow Electronics, Bob Reynolds of Graybar Electric, Neil Novich of Ryerson Tull, and Pat Tracy of Dot Foods. Each of their companies has billions of dollars in revenue.

Kaufman pointed out that five years ago many industry experts had predicted that "we'd all be dead by now" and that "the Internet would disintermediate us."

"With all the changes going on, I still say we'll look the same more than different," he said. "[Distribution] will continue to evolve, but at a much slower pace than many consultants believe." Other panelists predicted that technology would play a key role in bringing distribution to a new level, helping streamline information throughout the chain, and that knowledge will be a critical factor in determining a distributor's success.

They pointed out that there will be more consolidation, tighter linkage between distributors and customers, customized solutions for individual customers, and an upgrading of distributors' sales forces. But there was another critical area mentioned by more than one panelist: knowledge.

"Whoever owns the knowledge will own the customer," said Reynolds, chairman of Graybar, the largest electrical distributor in the country. "The distributor is in a very unique position. If they have knowledge, they also have the supplier. We see that as very significant." This knowledge makes the distributor invaluable to his customer and supplier.

We've said it before and it's worth saying again: Knowledge is power. Using knowledge to help your customer will ensure that the distributor will be around five years from now and well into the future.