7 ways industrial automation distributors can build a future-ready business

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In today’s business world, significant disruptions seem to increase in intensity and frequency. In the industrial space, for example, major market shifts, geopolitical uncertainties, and events such as the global pandemic all contribute to an ongoing atmosphere of business volatility.

Organizations that distribute industrial equipment worldwide find themselves in the vortex of the supply chain disruption caused by such socio-economic and geo-political events. Industrial automation distributors maintain extra stock to weather such disturbances and anticipate customer demand once markets revert to normal behavior. However, such a strategy also invites business risk. Uncertainties surrounding economic recovery timing and growth rates can threaten the distributor’s financial stability. For example, excess inventory in the warehouse complicates the organization’s ability to achieve effective cash cycle management.

Therefore, industrial distributors must adopt multiple new tactical actions to survive and prosper. More than ever, business preparedness for future events should become engrained into the fabric of a distribution organization to ensure the business resilience needed to meet customer demands.

Industrial automation distributors (IAD) best practices for stabilizing and growing business

Companies like Schneider Electric, who work across a global network of Industrial Automation Distributors (IAD) through their Alliance Partner Program, have observed specific best practice strategies that help industrial distributors return to normalcy and enable sustainable growth. These practices include:

1. Fulfill existing orders – Taking care of existing customers is critical. Making order fulfillment to OEMs, system integrators, and end-user customers a top priority provides confidence and a greater sense of normalcy.
2. Win back lost customers—The non-availability of goods during the pandemic drove away a segment of existing customers. Refocusing on those lost customers — and winning them back — is much easier than relying on recruiting new customers.  
3. Understand the evolution of customer needs—Distributors who proactively adapt the quickest to these changing needs are more likely to gain market share.
4. Focus on new sectors —New growth sectors emerge when markets and environments quickly transform. Interest in motion & robotics and e-mobility has recently accelerated, for example. When such circumstances present themselves, realigning the client pool helps position an IAD organization to better capitalize on future growth segments.
5. Upskill the internal resource pool—As new markets evolve and grow, new skills will be required to service those markets properly. Yesterday’s success will not automatically translate to future growth. Investments in training and knowledge acquisition are imperative to accommodate new business opportunities.  
6. Invest in digital – As industrial buyers become more digital, their suppliers must transition their technology base to make it easier for their customers to conduct business. Industrial purchasers now expect an Amazon-like seamless buying experience. As traditional distributors go digital, they must recognize that “digital” is more than just a technology upgrade – it also represents a new business strategy.
7. Develop an effective ecosystem of partners—By working more closely with system integrators and technology partners, IADs strengthen their ability to address their clients’ evolving automation needs. Embracing a complete project view also helps IADs and their partners to develop an efficient combination of technology and processes to execute lucrative, complex projects.

Access to industrial automation distributor resources

Companies like Schneider Electric can help IADs lower their business risks and prepare for the future. The Schneider Electric Alliance Partner Program for Industrial Automation Distributors enables partners to deliver higher solution credibility and customer satisfaction with an advanced degree of specialization in motion & robotics, software, drives solutions, services, and sustainability across many critical industrial automation applications. 

For guidance on how to better manage this ever-changing marketplace, access Schneider Electric’s Alliance Industrial Automation Distributors website today.