At the conclusion of GAWDA’s 2021 Annual Convention, the Association presented its most prestigious Award of Excellence to Ken Thompson, a 60-year veteran in the packaged gases industry. gasworld US caught up with Ken to ask him to reflect on the most meaningful disruptive changes he recalls, and what challenges he sees on the horizon.

Bundling all that has occurred in the past – transformation of the businesses from dingy warehouses to shiny, efficient show rooms; mode changes from cylinder deliveries to handling cryogenic products in portable to micro and mini bulk; outright equity in atmospheric separation; andcarbon dioxide production – have been natural progressions. 

Organization structure change beginning with the Airgas consolidations that reduced the independent distributor population from a couple thousand to roughly 425 and a swing today where employee ownership is a viable alternative to an outright sale to a consolidator. Generational changes have brought forth an amazing level of young talent; energetic, skilled in use of technologies’ best tools, and with visions of the future that are limitless.

With all of this in the rear-view mirror, the next pressing challenge lies directly ahead.

The huge majority of world society lives in the internet world. Electronic commerce is touching everything we do and operating businesses in our distribution space is no different. Everyone agrees that a process that we would have preferred to learn on a gradual basis was thrown into overdrive by Covid.

It’s important to authenticate this hypothesis with facts. A decent starting point is using Distribution Strategy Group’s intelligence gathering and sharing as a reference point. It’s true that their experience is based in the MRO, electrical, HVAC, plumbing, and power transmission verticals, but even though we add gases and containers to that mix, the entire e-commerce processes revolutions are very similar. B2B business relationships are here to stay and will expand.

The well documented narrative exists that over the next 36 months, approximately 12% to 18% of a distributors’ revenue will shift from traditional business models to some level of e-commerce. Add to this Modern Distribution Management’s most recent survey indicating that 65% of distribution products buyers will not see a sales representative, it severely narrows the opportunities for a brick and mortar only distributor to conduct business.

As these facts permeate manufacturers, they will wonder whether their traditional route to end users through distributors can continue to be effective. As a result, a growing number of manufacturers are building e-commerce sites to serve end users through direct linked connections.

These facts have not gone unnoticed in our distributor community. IWDC CEO Frank Kasnick recognized both the threat and opportunity for his Cooperative’s membership. They initiated discussions with a principal ERP provider, Computers Unlimited, seeking solutions that would permit independent distributors to provide essential electronic links between manufacturers and end users. It’s a slow process, but collaborations did occur, and during the 2021 GAWDA SMC in Nashville, one of the participants, General Distributing Company, showcased their ‘work in process’ project to a welcoming audience.  

Today, approximately 35 GAWDA member companies are engaged at various levels of collaborative platform completion that will connect them with users insisting on ecommerce relationships.  

Multiple ERP platform providers are now engaged with a number of our industry members; larger and small. The base ERP has been modified to accept numerous ecommerce front end offerings, all connected through APIs. GAWDA will provide some of this information in the Seminar Series that will be part of the 2022 SMC Agenda in Indianapolis.

While the focus has been concentrated on ‘connectivity’, the most important part of an ecommerce relationship, content, has been undergoing enormous change.

The very best connected e-commerce sites are worthless without rich content.

Content provided today by our industry participants ranges from mediocre to reasonably rich.

It must be recognized that the manufacturer is the owner of the products. Likewise it is the manufacturer who must provide the content. Accordingly, the manufacturer must search out the Gold Standard for content.  

Providing anything short of rich content is like sending out an un-trained sales rep with an empty catalog. One can research content provided by Schneider or Rockwell in the electrical component distribution vertical. Content from each of these companies is exceeding rich in graphics quality, attributes identification, animation, and configuration.  

Further, these two have made this content available to their respective independent distributors so the representation can be displayed through the channel to the user.

Our industry will continue to excel in research for new gas processes; among them renewable energy with the many colors of hydrogen, in medical gases applications, and in carbon capture. Engineers will improve many metals joining processes and design equipment and filler metal enhancements to improve efficiency and reduce costs.

There will be enormous efforts to automate processes that will address ongoing issues with skilled labor shortages.

Still, with all of this activity on going, information will have to transfer, business transacted between trading partners; and if we intend to be part of this evolution, we must become e-commerce savvy!