SUMMER 2023

78 THE DISTRIBUTOR’S

78 THE DISTRIBUTOR’S LINK Nelson Valderrama Nelson Valderrama is the CEO of Intuilize, a software Service platform that specializes in helping mid-sized distributors transform data into profits. With more than 22 years’ experience as P&L manager executive for major PE firms and industrial distributors. Nelson has dedicated his career to help business uncover hidden competitive advantages and unleash the power of data in the new Digital Economy. For more information contact by email nelson@intuilize.com or visit www.intuilize.com OPTIMIZING INVENTORY: HOW AI IMPROVES S&OP On May 16, 2023, The Home Depot reported lower-than-expected sales. The news is not devastating, but it could signal the arrival of more economic volatility. EVP/CFO Richard McPhail advised stockholders of further softening and uncertainty regarding consumer demand. Economists often watch housing and DYI markets for signs of change. Distributors should monitor these stressors because they extend the threats that began with COVID-19. The lockdowns, labor diaspora, supply-chain collapse, trade and tariff struggles, and continuing inflation have turned distribution upside down. Small distributors have failed; the mid-size ones have felt their growth stunted. They realize that optimizing inventory is imperative. But they need tools to optimize their Sales and Operations Planning (S&OP). Many distributors have opted for advanced tech potential to reshape their S&OP for survival and future growth. Optimizing Inventory In A Volatile Economy In the best times, 25% of small distributors fail in their first year, and 60% will not survive the fifth year. Like other failed businesses, they needed more financing and resources. They structured rigid processes to offset their entrepreneurial zeal. They invested in CONTRIBUTOR ARTICLE PHOTO BY ANNIE SPRATT ON UNSPLASH products with little market interest. And they could have planned better. Mid-size distributors face their challenges. Some distributors need more financial depth or management experience to run a positive cash flow cycle to cover the gap between purchasing goods and collecting payments on sales. Forbes sees, “midsize distributors are shifting from a focus on selling volume to differentiating themselves through value-added products, services, channels, and externally-focused solutions.” Yet some lack a talent-deep bench able to sell and market successfully. Even more distributors struggle with employee turnover and a process structure too rigid to engage and retain talent. And they, too, do not plan well for unexpected events. CONTINUED ON PAGE 126

THE DISTRIBUTOR’S LINK 79