In a VALVE Magazine article from January of 2018, we discussed the effect that digitization is expected to have on the distribution business. The necessity of adding and adapting to digital technology and warehouse execution systems to meet customer expectations is one challenge. It was the area most distributors recognized would require important investments this year and for the foreseeable future.

However, the biggest disruptor to industrial distribution is what is being called The Amazon Effect. But it isn’t just Amazon that is causing the disruption. There are many other internet competitors, like Alibaba, that are causing concern.

For the last several years, at industry gatherings of all kinds, the subject of automation is guaranteed to dominate the conversation. Whether it’s the latest digital control system to monitor and operate valves, or the “threat” to jobs from robots and machine learning, digital advances have created opportunities and challenges for employers and employees alike.

At the 2017 Emerson Global Users Exchange, Mike Train, executive president of Emerson Automation Solutions, pointed out during his keynote address that “the past 30 years have brought us fantastic advances in the manufacturing sector, including greater operating efficiencies enabled by automation, but the incremental benefits gained are diminishing. The pressure is on industry leaders to take the next step to the game-changing performance made possible by digitally empowering the workforce.”

Manufacturers and distributors across all economic sectors are adopting and integrating inside sales models in record numbers. The scalability, measurability and predictability of this model has made it the new preferred channel for companies who have a mandate from stakeholders to grow sales and revenue quickly and within budget constraints.

This shift has caused demand for talent to outstrip supply. Attracting, hiring and retaining people is harder than ever before as companies compete for the same, small, limited pool of knowledgeable, revenue-generating talent. It’s an insidious problem that can thwart inside initiatives and diminish a company’s ability to hit sales and revenue goals.

It is becoming increasingly difficult for process manufacturers and producers to execute large capital projects. Edward Merrow, founder and president of Independent Project Analysis (IPA) and author of Industrial Megaprojects—Concepts, Strategies, and Practices for Success, noted that:

“…large, complex projects in petroleum, minerals, chemicals and power fail much too often for comfort. Large cost overruns, major delays poor operability, and far too many safety incidents characterize well over half of the industrial projects of $1 billion or more around the world.”

Even smaller projects are having difficulties in meeting budgets and time schedules due to the growing complexity of expertise required to successfully plan and execute these projects.