Supply House Times logo Supply House Times
search
cart
facebook instagram twitter linkedin youtube
  • Sign In
  • Create Account
  • Sign Out
  • My Account
Supply House Times logo Supply House Times
  • NEWS
    • ASA NEWS
    • Company News
  • PRODUCTS
    • Interactive Spotlights
  • COLUMNS
    • Natalie Forster: From the Editor
    • Alicia Branham: Marketing Matters
    • Brad Williams: Succession Planning
    • Melissa Rasico: Luxury Plumbing Lounge
    • Letter from ASA President
    • Guest Columnists
    • Safety Columnists
  • MARKETS
    • Codes & Legislation
    • Heating & Cooling
    • Industrial PVF
    • Plumbing
    • Radiant & Hydronics
    • Solar Thermal | Geothermal
    • Technology
    • Women in Industry
  • BATH & KITCHEN PRO
    • Bath & Kitchen News
    • Bath & Kitchen Products
  • SPECIAL EDITIONS
    • B.I.G. Book Directory
    • Premier 150
    • Rep Locator Directory
  • MEDIA
    • Podcasts
    • Videos
    • eBooks
    • Webinars
  • RESOURCES
    • Radiant Comfort Report
    • Industry Calendar
    • Industry Links
    • Custom Content & Marketing Services
    • Market Research
    • Supply House Times Store
  • EMAG
    • EMAGAZINE
    • ARCHIVE ISSUES
    • CONTACT
    • ADVERTISE
  • SIGN UP!

Your Inventory System Has Been Making Decisions Without You

Your buyers are not making most of your inventory decisions. Your system is.

By Daniel Dinh
A person looking at a computer with charts on it.
Image courtesy of Pexels.
June 30, 2026

Ask any distributor who manages their inventory and you'll get the same answer. The buyers do. We have a purchasing team, they know the categories, they manage the stock.

It's a reasonable answer. It's also mostly wrong, and the gap between what we believe and what's actually happening is where a surprising amount of working capital slowly becomes trapped in inventory.

Here is what is actually happening. Your buyers are not making most of your inventory decisions. Your system is.

Walk through a normal day. Every reorder point in your ERP is a decision about when to buy. Every min and max is a decision about how much to carry. Every safety stock level is a decision about how much risk to absorb. Every suggested purchase order that lands in a buyer's queue is the result of dozens of those decisions stacked together and executed automatically.

Across forty thousand SKUs, that is not dozens of decisions a day. It is thousands. And almost all of them happen without a human pausing to consider whether the assumptions behind them still hold.

The buyer enters the picture only when something looks wrong. A stockout on an A-item. An obvious overstock someone trips over in the warehouse. A number that's far enough off that it catches the eye. The rest of the time, the system decides, the system executes, and everyone assumes the buyer is managing inventory.

The system is not really deciding anything. It is executing decisions you already made.

Inventory is simply where this becomes impossible to ignore, because the volume is so high that no one could review it by hand even if they tried. You are not running an operation where people make the decisions, and the system keeps the records. You are running one where the system makes the decisions and people occasionally check the records.

But here is the part worth slowing down on. The system is not really deciding anything. It is executing decisions you already made. Every reorder point, every safety stock level, every replenishment rule was a management judgment at some point. It was a deliberate call about how to balance availability against the cost of carrying it. Someone made that call, and it was probably right when they made it. Then it got encoded into the system, and the system has been carrying it out faithfully ever since.

That is what the ERP actually does. It does not exercise judgment. It executes yesterday's judgment, exactly as given, the same way every day, long after the conditions that justified it have changed. No one consciously decides to keep carrying eight weeks of a part. The decision was made once, reasonably, and then nobody went back to it. The system did not get it wrong. It got it right, once, and never noticed when right turned into wrong.

Once you see it that way, the everyday problems start to look different.

Lead times stretch during a disruption, so the system's reorder points climb to protect availability. That is the system doing its job. Then the lead times normalize. But nobody resets the reorder points, because nothing looks wrong. The shelves are full. Service levels are fine. So the system keeps buying to a lead time that ended a year ago, and the excess sits there as trapped cash that no report flags, because by every measure the system is told to watch, everything is working.

A large customer leaves. The revenue hit shows up in the financials immediately and everyone feels it. But the safety stock that was built around that customer's demand pattern does not adjust on its own. The system is still protecting against variability that walked out the door with the account. Months later you are still carrying inventory for a customer you no longer have, and it never occurred to anyone to look, because losing the customer felt like a sales problem, not an inventory one.

None of this is a buyer error. In every case, the person did exactly what the job asks. The problem is upstream of the person; in a layer of decisions nobody is responsible for governing.

This is the heart of it. Most distributors have real governance for the decisions people make. There is a pricing authority schedule. There are purchasing approval thresholds. There are limits on what a branch can commit without a sign-off. We have spent decades building structure around human decisions.

Almost no one has built the equivalent structure around the decisions the system makes automatically. The reorder logic, the safety stock formulas, the replenishment parameters. Together, those assumptions drive thousands of daily decisions. They were set once, often during an implementation years ago, and they have been running ever since on autopilot.

We govern the decisions we can see a person making. We do not govern the decisions we made once and handed to the system to carry out. Those are still our decisions. The system is simply where they live now. They are executing every day, at scale, on conditions that no longer match the ones we decided under, and no one owns the job of checking whether they still hold.

The distributors who get ahead of this build a capability most never name. They develop the confidence that their automated decisions still reflect today's business without someone having to catch each one by hand. That capability is what I call Operational Trust.

It is the same capability that lets a leader step out of a routine pricing call, applied to the decisions a system makes instead of the decisions a person makes. Most distributors have built some version of it for their people. Very few have built it for their systems, even though the systems are now making the larger share of the decisions.

So, here is the question worth carrying back to your next replenishment review.

When your inventory system recommends a purchase order tomorrow morning, how confident are you that the assumptions behind that recommendation still reflect today's business — and not last year's? Not whether the number looks reasonable. Whether the logic underneath it has been governed by anyone, recently, on purpose.

If you are not sure, you have found the decisions in your business that no one is actually managing.


KEYWORDS: inventory inventory management operations technology

Share This Story

Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!

Daniel T. Dinh writes on pricing governance and inventory decision systems for U.S. mid-market industrial distributors. Dallas, TX.

Recommended Content

JOIN TODAY
to unlock your recommendations.

Already have an account? Sign In

  • Stock financial index show successful investment on property business and construction industry with graph and chart for presentation and report background.

    2025 predictions: Twelve trends supply houses should know

    As 2024 ends, I’ll review last year’s predictions and...
    Market Sectors
    By: Brad Williams
  • Background of aerial view of Industrial container port part of shipping in nighttime with a blue overlay.

    2025 Next Gen ALL-STARS: Top 20 Under 40 PHCP-PVF Professionals

    The future of the PHCP-PVF industry is being shaped by a...
    Heating & Cooling
    By: Natalie Forster
  • Premier 150: The top PHCP-PVF Distributors of 2026

    Premier 150: The Top PHCP-PVF Distributors of 2026

    Combined revenue across this year’s Premier 150 once...
    Plumbing
    By: Natalie Forster
Manage My Account
  • eMagazine
  • Newsletters
  • Manage My Preferences
  • Online Registration
  • Subscription Customer Service

More Videos

Popular Stories

Rob Micklus, Chris DellaSala, John McKeown and Bob DellaSala

2026 Manufacturers Rep of the Year: Keystone Sales & Associates

Price Increase Image

PHCP-PVF Price Increases: June 2026

Best Sales Rep Just Retired

Your Best Sales Rep Just Retired. Now What?

2026 Premier Rankings

Events

December 30, 2030

Webinar Sponsorship Information

For webinar sponsorship information, visit www.bnpevents.com/webinars or email webinars@bnpmedia.com.

View All Submit An Event

Poll

Identifying Daily Time Loss Areas for Your Team

Where does your team lose the most time each day?
View Results Poll Archive

Products

The Water Came To A Stop

The Water Came To A Stop

See More Products

Download the FREE 2025 Water Conservation, Quality & Safety eBook

Download the Fifth annual Bath & Kitchen Pro eBook

Related Articles

  • SHT 1023 Rep Council Feat Slide 1 1170x658

    Rep Council 2023: The bar has been raised

    See More
  • Winsupply’s Stock 360

    Winsupply rolls out Stock360 managed inventory system

    See More
  • Woman standing by her desk with desktop computer, working

    The Spreadsheet Your Branch Manager Is Hiding From You

    See More

Events

View AllSubmit An Event
  • April 30, 2026

    Master the Metrics That Matter: Product, Performance and Forecasting

    On Demand This webinar will cover the limitations of traditional approaches based on intuition and averaging are not enough. You’ll learn how practical applications of AI such as statistical forecasting and service level driven planning help improve demand planning, optimize reorder points, and automate daily execution within ERP systems. 
View AllSubmit An Event
×

Stay in the know on the latest PHCP-PVF industry trends.

Get tailored content delivered your way.

JOIN TODAY!
  • RESOURCES
    • Advertise
    • Contact Us
    • Directories
    • Store
    • Want More
    • Plumbing & Mechanical
  • SIGN UP TODAY
    • Create Account
    • eMagazine
    • Newsletter
    • Customer Service
    • Manage Preferences
  • SERVICES
    • Marketing Services
    • Reprints
    • Market Research
    • List Rental
    • Survey/Respondent Access
  • STAY CONNECTED
    • LinkedIn
    • Facebook
    • Instagram
    • YouTube
    • X (Twitter)
  • PRIVACY
    • PRIVACY POLICY
    • TERMS & CONDITIONS
    • DO NOT SELL MY PERSONAL INFORMATION
    • PRIVACY REQUEST
    • ACCESSIBILITY

Copyright ©2026. All Rights Reserved BNP Media, Inc. and BNP Media II, LLC.

Design, CMS, Hosting & Web Development :: ePublishing