Wholesale distributors are expanding product assortments and holding more inventory to protect service levels in a volatile economy, while planning a bigger push into demand planning and warehouse automation, according to a new research report
The report, from Phocas Software, a business intelligence and financial planning and analysis (FP&A) software provider, is based on a global survey of more than 100 wholesale distributors, Phocas said. The findings point to a shift away from lean inventory models as distributors respond to economic uncertainty, competitive pressure, tariffs, and supply chain delays.
70% of respondents manage more than 5,000 SKUs, reflecting broader assortments designed to reduce stockouts and prevent customers from switching suppliers.
The report also found that distributors are prioritizing product availability over cash-flow efficiency. 22% of respondents are holding more than 90 days of stock, and 26% report 6% to 10% “deadstock.”
On operations, the survey points to increased investment in planning and analytics. Phocas said 54% of respondents want new demand planning techniques, 45% are embedding more data-driven and automated warehouse solutions, 33% are increasing customer and product segmentation, and 31% are adjusting safety stock levels.
Demand planning stood out as a performance differentiator among respondents as 34% of distributors reported lowering inventory costs, 24% reported improved service levels, and 14% reported increased revenue tied to demand planning outcomes.
31% of respondents reported high confidence in their inventory data and 87% said data helps them manage supplier performance, with reported benefits including improved lead-time accuracy (9%) and joint planning (8%).
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