December Premium Monthly: What We Learned in 2023 - Modern Distribution Management

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December Premium Monthly: What We Learned in 2023

Mike Hockett introduces MDM's December 2023 Premium Monthly issue by examining the year that was in 2023 and its biggest developments.
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With another year come and gone, we can look back on 2023 as a year of normalization for distributors, though not without change.

Pricing normalized, with the pace of inflationary pricing increases slowing from frequent at the start of the year to nearly calm at year’s-end.

Supply chains continued to normalize, with most distributors reporting lead times for the majority of product lines back to pre-2020 normal, though certain lines still see prolonged backlog.

Inventories normalized throughout the year, with most distributors selling down high stock levels coming off the pandemic bullwhip effect and looking to offload inventories in anticipation of a slower 2024. The U.S. Census Bureau said advance wholesale inventories ended November down 0.2% from October — marking the ninth monthly decrease in 2023’s first 11 months — and down 3.1% year-over-year.

The labor environment normalized slightly, with wholesale trade’s November employment up 1.3% year-over-year. However, the sector’s 2023 unemployment rate averaged 2.49% through November, up from 2022’s 2.33% average. Labor is still the biggest challenge for many in the industry and our research doesn’t indicate conditions improving soon.

If 2023 was The Year of AI Interest, 2024 is shaping up to be The Year of AI Application.

Besides labor, 2023’s biggest topic of conversation across distribution undoubtedly was artificial intelligence. Many distributors had already been applying AI in some form pre-2023, but the launch of ChatGPT-4 in November 2022 spiked industry interest in the technology, especially in human resources, sales and marketing tasks.

If you haven’t already, download your free copy of MDM’s Distribution AI Playbook — a detailed guide to help you and your team analyze and implement AI successfully for your unique environment.

As MDM has through each hype cycle, we’ll continue to bring you the latest developments in 2024. Join us Feb. 7 for MDM’s virtual AI for Distributors Summit, which connects leaders of the $9-trillion North American wholesale distribution industry to share what’s on the horizon for AI models, as well as the latest strategy, integration and implementation guidance to innovate and create meaningful transformation in organizations today. The vent is designed to help leadership teams evaluate, assess and scale AI investments successfully. Register here today.

Our entire team at MDM appreciates your support of our mission to help distributors build a strong business. We wish you a very strong year!

In December, MDM’s Premium content was packed with pieces discussing 2023’s M&A activity; cybersecurity breaches; 2024 revenue forecasts; STAFDA channel discussions; and talent strategy. MDM Premium subscribers can download our December Premium Monthly PDF here.

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