Distributors stockpile as Phocas flags planning gaps

Phocas has published its first annual Inventory Trends in Wholesale Distribution report, outlining how wholesalers are adjusting stock and planning practices as competition and economic uncertainty reshape inventory decisions.

The report draws on a global survey of more than 100 wholesale distributors and covers inventory management, demand planning, warehouse operations, and supplier relationships. Phocas presents the findings as benchmarks distributors can use to measure performance and set priorities.

Respondents described an environment where core variables such as demand and lead times remain central, but external conditions are shifting faster, including tariffs and supply chain delays. The report links those pressures to a change in stockholding behaviour across the sector.

More stock

Distributors are holding more inventory than before, linking the decision to customer retention in an increasingly competitive market. The research also suggests some firms are revisiting established inventory approaches in response to volatile costs and supply.

Myles Glashier, Phocas' Chief Executive Officer and Co-founder, said inventory decisions often cut across functions. "Inventory management can be siloed in a distribution company. To do it well, the purchasing team needs to work closely with sales and finance so they can move with the market," he said.

Complex supply

The survey indicates operational complexity is growing. Economic uncertainty ranked as the most impactful challenge, with competitive pressure close behind. Many respondents reported managing broad product ranges and large supplier networks at the same time.

Seven in ten distributors said they manage more than 5,000 stock-keeping units and work with more than 50 suppliers. The report identifies efficiency gains as the top priority, reflecting the time and cost involved in coordinating replenishment, supplier performance, and customer service across large catalogues.

Inventory management is increasingly seen as a strategic lever, driven by the need to balance cash tied up in stock against the risk of lost sales when products are unavailable.

Planning focus

Demand planning was the most-cited area for improvement. More than half of respondents (54%) said they want new demand planning techniques. A further 45% reported embedding more data-driven and automated warehouse solutions.

Customer and product segmentation also featured strongly, with 33% reporting increased use. Safety stock adjustments were cited by 31%. The report frames these moves as a response to greater complexity in product mixes, customer expectations, and supply variability.

Glashier said forecasting accuracy is held back by limited access to the right data. "Demand planning is a core need for distributors, yet the industry faces an accuracy gap due to limited access to the right data. Distributors that can keep planning up-to-date with current sales are lowering the cost of inventory and improving service levels," he said.

Availability trade-off

The report suggests many distributors are prioritising stock availability over cash flow. Six in ten respondents said sales suffer when stock is inadequate. At the same time, the survey points to persistent issues with slow-moving and obsolete inventory.

More than a quarter (26%) reported deadstock levels of 6% to 10%. The report also notes that 22% hold more than 90 days of stock. Those figures highlight the tension between keeping shelves stocked and avoiding capital being locked in inventory that does not turn.

Performance gap

Phocas describes demand planning as the leading performance differentiator in the survey. Respondents linked planning improvements to several outcomes: 14% reported increased revenue, 34% reduced inventory costs, 24% higher service levels, and 12% better supplier terms.

The findings also link "trusted data" with supplier performance. Confidence in inventory data was high among 31% of respondents, while 87% said supplier management improved. Data sharing with suppliers improved lead time accuracy for 9% and supported joint planning for 8%.

Company context

Founded in 2001, Phocas sells business intelligence and financial planning software aimed at middle-market manufacturers, distributors, and retailers. It supports more than 2,900 customers and 48,000 users globally, with offices in the United States, Australia, the United Kingdom, and New Zealand.

Glashier said Phocas plans to continue publishing the annual inventory trends report and using survey data as a reference point for distributors tracking changes in stockholding, planning, and supplier collaboration.

"Our latest report is designed to empower distributors by sharing insight from the industry on current conditions. With over 20 years of experience serving wholesale distributors, our commitment remains steadfast in providing clarity amidst industry changes. We aim to give distributors practical benchmarks, so they can compare their own operations and identify opportunities for improvement," Glashier said.