Distribution Without Frontiers

“You don't understand!” Gabriel said excitedly. "I have the production line stopped! Every minute that passes costs millions of pesos. I urgently need to find the component! Just tell me where I can pick it up and I'll go right now!"

To which a kind voice replied on the phone: "My goal is to help you as much as I can, but the best I can offer you is 72 hours door-to-door, stressing the fact that some of the processes like customs clearance do not depend on us."

Gabriel felt the blood rise up to his head and his mind clouded. There didn't seem to be many alternatives and he knew that if he didn't resolve this production interruption in the next few hours, it would be his last day at the company.

“Did you try to talk to the manufacturer to check availability?” asked the voice on the phone.

“I've tried everything!” Gabriel replied, distressed and upset. "The part is obsolete, and the manufacturer's alternative is to change the machine’s system. I get 36 weeks on the arrival of the components and an additional two weeks for installation. The supposed ‘distributors’ won’t have the component for more than a year. You guys seem to be the only ones to have it available. I just need you to send it to me right away!"

His whole body was a bomb about to explode. Suddenly, he could only see the face of his wife and young daughter receiving him at the door of their house with a terrible sense of failure.

The most complicated part of this "common” situation in the industry is that these parts are available or could have been available; only their access was limited in part by the manufacturers themselves and partly by the lack of investment by the distributors in RPS and digital platforms, so that potential customers could find them.

While e-commerce is destroying all borders, showing the availability of spare parts and equipment in real time worldwide, many manufacturers continue to focus a significant amount of effort on trying to keep their distribution model limited by territories, using non-tariff barriers or sales policies for customers in geographical areas to authorized distributors that have millions in low-turnover inventory and must cover a purchase quota by respecting price lists. 

It is curious how global manufacturers support and promote international trade and at the same time, seem not to trust that the market is catalyzed by the natural forces of supply and demand so they continue working on models that have already been superseded. They even open up opportunities for small online distributors who compete much more efficiently and without taking the risk required of authorized distributors, who cannot invest in better systems because they have all their money stuck in inefficient inventories. 

They pressure the authorities to open free trade so they can bring products into the country and at the same time, they promote rules that do not allow customers to bring those same products directly.

The combination of the large online sales platforms (generalists like, eBay or specialists like Radwell), the ability to collect and concentrate big data, logistics models and now the use of artificial intelligence will end up with a huge number of distributors that have not noticed that they are sentenced by the regional distribution model and have become the weakest link in the chain, although for the moment they continue to sell. 

Hector saw his friend's face and asked, "What's wrong with you?" Gabriel replied anguished, explaining the whole problem. Hector responded with a new question. “Do you have the budget for a plane ticket?” To which Gabriel replied, "Money is no problem at the moment." "Pay for the component and give me the address where we can pick it up in New Jersey Today, we settle this matter," Hector said as he picked up his phone and began a conversation: "Hola primo, remember how you always tell me that you want to send me to visit the nephew … . 

In the opinion of a server, everything is a matter of time. These barriers gradually will continue to fall but in the interim,  new models will emerge that will take a good part of the business that the old schemes were intended to protect.