Delivering for Best-in-Class Wholesaler-Distributors
December 8, 2016  |  ByPaul St. Germain, NAW Institute for Distribution Excellence Author
NAW-Virtual Reality and Blockchain - Wholesale Distribution Trends #14

Virtual Reality for Wholesaler-Distributors

Virtual reality (VR) is used to replicate surroundings, real or imagined, and create a life-like 3D experience associated with the environment. It allows for user interaction with the surroundings, using closed-loop feedback systems so that the outcomes are a direct result of the actions taken. VR has been around for several years, and many industries already use it for various functions.

For example, VR simulations are often used for training in high-risk or high-skill situations that would otherwise be dangerous or difficult to replicate. Flight simulators provide the experience of flying, complete with tilting movement of the flight deck to respond to the actions taken by the person in the simulator.

VR can also improve building information modeling (BIM), which provides a consistent 3D model that contains all the building data as a base for collaboration among disciplines such as HVAC, plumbing, and electrical. Architects and engineers use BIM when designing buildings so that these various systems won’t collide with each other or occupy the same space, particularly behind walls.

Companies are employing 3D projection technology to allow users to use VR goggles to see what a proposed room or office space will look like. Clients can suggest changes, and engineers can make them even before construction begins, avoiding problems and saving time and money.

Research is currently underway to create a bidirectional data exchange between BIM and VR. For example, if someone widens a window frame in the VR, the BIM can check the change for validity and reflect it in BIM, constantly updating the model and the underlying database. The system would also update the required materials, such as ducts and plumbing, and change the bill of materials required for construction.

As companies explore ways to use VR, it may open up new opportunities for electrical, plumbing, and other construction-material distributors. Distributors and their contractor-customers can use VR to visualize how the various components fit together behind walls to ensure that everything fits. Working more closely with construction architects to build out the VR model before construction begins will benefit both the builder and the distributor. This, again, is another value-added service that a distributor could bring to the table.

Blockchain for Wholesaler-Distributors

Blockchain is a technology that is emerging as a way to permit companies to make and verify transactions on networks in near real-time without a central point of control. A blockchain is a chain of blocks of data linked to one another, constituting a time stamped, shared, authenticated database that contains the entire logged history of an asset. The information is shared, meaning each participant in the system maintains a local copy of this database in his or her own ledger. Algorithms are used to keep every copy in sync so the information is constantly distributed and shared, hence the term “distributed” or “shared” ledger. An asset is anything that is capable of being owned or controlled to produce value.

Assets can be tangible or intangible, such as a building, food product, mortgage, patent, or cash.

By design, no one party can modify, delete, or even append any record to the ledger without the consensus from others on the network. When someone wants to add to it, participants in the network—all of which have copies of the existing blockchain—run algorithms to evaluate and verify the proposed transaction. If a majority of nodes agree that the transaction looks valid—that is, identifying information that matches the blockchain’s history—then the new transaction will be approved and a new block added to the chain. Due to the consensus required to add a new block, the information in the blockchain is authenticated, and multiple participants eliminate a central point of control.

The advantages of blockchain technology include allowing business transactions to be conducted in near real-time by eliminating central authority intermediaries, as well as performing business transactions that are verifiable and auditable. For example, for the trading of stocks in the financial industry, blockchain allows securities to be settled in minutes instead of days.

For distributors, the core of blockchain is the ability to provide a shared, secure record of exchange that can track what went into a product and who handled it along the way, introducing transparency into supply chains, revealing the provenance of a product to everyone involved—from originator to end user, even if it has been through multiple manufacturing steps at different companies—and lastly, as goods change hands, to exchange payment between organizations.

Blockchain technology is in its infancy, but is one of numerous technologies being developed, tested, and commercialized that may eventually affect the wholesale distribution industry.

In the brand-new 11th edition of Facing the Forces of Change®: Navigating the Seas of Disruption, you will find much more detail on all of these topics, including strategies and examples from leading distributors, along with suggested actions to understand and minimize the effect of disruption on a business, or present the opportunity to become a disrupter.

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Paul St. Germain, NAW Institute for Distribution Excellence Author

Paul St. Germain, NAW Institute for Distribution Excellence Author

While working for IBM, Paul St. Germain was responsible for managing IBM’s business and strategic initiatives within the global wholesale distribution industry. He researched critical issues and trends, developed IBM’s point of view on industry imperatives; guided IBM’s industry offerings and solutions; and engaged with wholesale distribution executives to help them transform their organizations.
Paul St. Germain, NAW Institute for Distribution Excellence Author

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