Dr Roy Stanley on the Black Swan Event of COVID-19: Innovation in Distribution and Delivery

For the next piece in our week of looking at COVID-19 as a Black Swan Event, Bdaily chairman Dr Roy Stanley examines how innovation in distribution and delivery is changing the business landscape and enabling businesses to grow and diversify.

“A friend of mine used to say, “If we always do what we have always done we will always get what we always have”.

“Things are now being done differently to deal with issues from Covid-19. There are some amazing creative and inventive efforts going on during this crisis. We are putting our talents into preserving and enhancing what is necessary.

“The government has come up with financially creative ways to support businesses and preserve jobs. The manufacture of Personal Protective Equipment (PPE) is being supported by a myriad of home-grown producers.

“A consortium of technologists has developed, prototyped and started manufacturing vital ventilators in record time. What normally takes years is being done in weeks and days.

“However, all this innovative effort has thrown up a major systemic issue in our commercial world: the products may be inventive but the distribution mechanisms are not.

“The issue is that the delivery mechanism is either too risk averse or too bureaucratic, so the provision of support to businesses is proving too slow, the banks can’t cope. PPE is not getting to the front line quick enough; the NHS supply mechanism is inadequate. Let us hope that the ventilators get to where they need to be.

“A distribution or delivery mechanism should be designed to get the right product or service to the right customer at the right time. New data systems can be used to more fully understand customer requirements and buying habits. This data mining allows more control of stock requirements and ultimately knowledge of profitable products.

“In most cases the more direct the distribution channel the more profitable the enterprise: from supplier to customer. The quicker we get our product to the buyer generally the happier the customer.

“It is increasingly being recognised that distribution channels are a largely unexploited opportunity for major cost and productivity enhancements.

“Evolving technologies offer realistic scope for new approaches to distribution. Remember if you control distribution then you control the market.

“Some questions to consider when looking at this might be:

“Are the distribution and delivery systems of the business fit for purpose?

“How easy is it for buyers to get access to the products?

“How can we use technology and data mining to improve distribution?

“Do the distribution and delivery mechanisms add value to the business or to the customers?

“Does the delivery mechanism encourage repeat business?

“Will distribution need to change and adapt to enter new markets?

“What other products could be sold and delivered using the distribution channel?”