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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.
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