A distributor by any other name would work as well

Frank Vitagliano, GTDC
Frank Vitagliano, GTDC

The days of 'pick, pack and ship' are over, reports Billy MacInnes

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11 November 2020 | 0

It’s time for the IT industry to ‘end of life’ the word ‘distribution’ because the term carries connotations that fail to reflect the value distributors provide.

The suggestion to find an alternative term for distributors was put forward by Scott Goree, head of global distribution at Pure Storage, in a panel discussion at the recent virtual GTDC (Global Technology Distribution Centre) Summit.

“It’s time as an industry that we end of life the word ‘distribution’,” Goree argued. “This is important for me as a vendor because as I go in and talk to sales leaders and I want to introduce distribution value to go to market, there’s a lot of legacy thinking of what value distributors provide. You’ll hear ‘pick, pack and ship’, but those days are long gone.”

 

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He added that while traditional distributor capabilities were still important “and I still need them, that’s less than half of what distributors are delivering in value. We need a name change.”

Two potential alternatives he suggested were ‘channel services provider’ or ‘aggregator’.

During the same discussion, Cheryl Neal, vice president, strategy & vendor acquisition at Tech Data, agreed that distributors were “doing so much more” than most vendors assumed. “Typically, a vendor only uses a small portion of our capabilities,” she said. “It’s all about leverage, communications and working together and we’ll help you scale and help you grow faster.”

Separately, the impressive role played by distributors during the pandemic was highlighted at the summit. Pointing to the “critical” role of distributors in providing products, services and support during the pandemic, GTDC CEO Frank Vitagliano, said it was “amazing” how quickly they had reacted to Covid-19.

He argued that much of distributors’ success in reacting quickly and effectively during the pandemic was based on foundational elements, such as inventory management, logistics, transactional support and financing, that “many had taken for granted”.

Alan Monie, CEO at Ingram Micro, commented that the distribution giant had responded quickly to ensure the continuation of its operations by enabling staff to work from home and establishing strict protocols for distribution centres. By adopting a “unified approach”, the distributor ensured that it “didn’t miss any shipments”.

Ingram Micro had worked hard to support vendors faced with their own challenges. It had been “difficult” for some vendors in the early stages of lockdown with little stock but the distributor had worked through the problems with inventory management. Similarly, when demand went down but supply increased, Ingram Micro had also managed that issue.

Distributors had done “a very good job” in aligning the interests of customers with the constraints manufacturers had experienced, he added.

Patrick Zammit, president Europe at Tech Data, said distributors had done an effective job of reinventing themselves in recent times. “Five years ago, every vendor I met with asked me “how is distribution going to stay relevant?”. Five years later, we continue to be relevant… We’re taken seriously by vendors and partners. Five years ago, everybody was sceptical. Today, they can see very clearly that we have been able to reinvent ourselves.”

Looking ahead, David Grant, president and COO at Westcon-Comstor, said a priority was to make sure new solutions were adopted more quickly by the channel. He argued that channel adoption of emerging technologies that vendors believe will drive benefits to the user “has always been a challenge”.

Grant remarked that “compressing time to market” was a key responsibility for distribution.

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