In our “50 Bold Predictions” feature, the vast majority of predictions made by industry citizens are extrapolations of present trends, which is to be expected.
After all, our world of today has been shaped in many ways by trends that began long ago. For instance, when this magazine started in 1958 computers were around, though primitive and rare compared with today’s slick and ubiquitous technology. Nonetheless, it was readily apparent back then that computers would play a much bigger role in the business world and society of the future. Same with jet airplanes, television and so many other budding technologies of the time - heck, cell phones are the manifestation of Dick Tracy’s then futuristic two-way wrist radio that captivated comic strip fans of the 1950s.
Keep in mind that not every extrapolation pans out. A half-century ago it was widely predicted that by now electricity would be too cheap to meter thanks to nuclear energy, and that robots would be performing the housekeeping chores in most American homes. Anytime I’m in need of a chuckle, I reach for a trade magazine article from 1955 that proclaims the coming era of nuclear-powered residential boilers.
Some trends continue in logical progression, while others peter out. That’s because surprises spring up to alter technological, cultural and economic landscapes. Nobody a half-century ago predicted the Internet, or the cultural upheaval of the 1960s, or $100-a-barrel oil.
Nobody envisioned competitors like Home Depot and Lowe’s, or the rise of China as a major source of products. A half-century ago the PHCP supply business was as fragmented as a jigsaw puzzle. In all that I have read from that era, nobody foresaw our industry giving rise to multi-billion-dollar national chains. It seemed that small independent wholesalers would continue to dominate this industry’s stream of commerce as they had throughout the first half of the 20th century.
That started to change midway through, however. In an article I wrote for Supply House Times’ 25th Anniversary edition in 1983, I examined an NAW research study on “Future Trends in Wholesaler Distribution” and noted: Large wholesaler firms will grab market share at the expense of companies defined as medium and, especially, small. Acquisitions and mergers will be a major fuel of that process.
That’s not completely accurate, however. A close assessment of the consolidation wave that has washed over this industry since then finds quite a few small independent wholesalers still thriving. It’s the medium-sized companies, being neither fish nor fowl, that have a harder time competing with the big firms’ economies of scale and ending up as prime acquisition targets. The smallest supply houses usually have a niche specialty and low overhead that enable them to pick off sufficient business in a local market to survive. Here’s a bold prediction: This will continue to be the case far into the future.
Beyond that, I’m not inclined to speculate much about what lay beyond the horizon. It’s easy to project that RFID tags, warehouse robotics, pervasive wi-fi and other nascent technologies will have a dramatic impact on the distribution industry in years to come. But nobody has an inkling of what epic surprises will inevitably arise to divert some of today’s trends in another direction.
With that in mind, let’s conclude this 50th Anniversary issue with words of wisdom from perhaps the wisest business writer who ever lived. Peter Drucker wrote the following in 2004, the year before he passed away a few days short of his 96th birthday.
Futurists always measure their batting average by counting how many things they have predicted that have come true. They never count how many important things come true that they did not predict. Everything a forecaster predicts may come to pass. Yet, he may not have seen the most meaningful of the emergent realities or, worse still, may not have paid attention to them. There is no way to avoid this irrelevancy in forecasting, for the important and distinctive are always the result of changes in values, perception and goals, that is, in things that one can divine but not forecast.
But the most important work of the executive is to identify the changes that have already happened. The important challenge in society, economics, politics, is to exploit the changes that have already occurred and to use them as opportunities - and to develop a methodology for perceiving and analyzing these changes.