When I retired from a successful distribution company in 2018, we were creating our strategic plan using the most current and sophisticated methods available at the time. Sales forecasting was accomplished by looking at our previous sales cycles, following leading economic indexes, and reviewing other companies’ plans and suppliers’ forecasts in our distribution vertical. Using that information, we then projected our top customer sales. Our five-year strategic plan was drawn up using a combination of SWOT analysis, future asset development, market share projections, and estimating the impact of adding new locations and products. For many gas and welding distributors, these traditional strategic planning methods have long provided the foundation for looking ahead.
Even with our best available insight, my mind goes back to The Great Recession (Dec. 2007 – June 2009): Triggered by the collapse of the U.S. housing bubble and the subprime mortgage crisis, which set off a global financial crisis. Major banks and institutions (Lehman Brothers, Bear Stearns, AIG) failed or nearly failed, credit markets froze, and unemployment in the U.S. peaked around 10% in late 2009. Governments responded with massive bailouts (TARP), stimulus spending, and near-zero interest rates. It’s widely considered the worst downturn since the Great Depression. Our forecast in 2008 went from an 8% revenue growth to an experienced 10% reduction. And in our industry, we were one of the best. I can’t even imagine still being with a distributor through the COVID-19 recession (Feb.–April 2020) and the sudden and severe pandemic lockdowns and financial imbalances.
How about now? We could not have foreseen today’s volatile landscape in the welding and gas distribution industry, defined largely by severe supply chain disruption. Geopolitical conflicts and domestic plant closures have created critical shortages of helium, carbon dioxide, and hydrogen, forcing providers to prioritize resource security and supplier diversification. To address a growing deficit of skilled labor, the industry is shifting toward robotic automation and collaborative cobot technology to sustain manufacturing output.
At the same time, aggressive market consolidation is occurring, as private equity firms and major corporations acquire independent distributors facing succession challenges. Heavy federal tariffs and the expansion of AI data centers are further complicating the economy — increasing costs while also driving a resurgence in domestic production. Ultimately, the sector is evolving through digitalization and a transition toward decarbonized energy solutions like green hydrogen.
Each of those forces is changing how gas and welding distributors operate, compete, and — most importantly — plan for the future. To effectively compete in today’s technology-driven market, new methods need to be added to traditional strategic forecasting techniques. That increasingly includes understanding AI for distributors and how artificial intelligence and other digital technologies can support strategic planning, operations, sales, and customer relationships.
To keep building resiliency into your strategic planning, it’s worth staying current through some of the cutting-edge learning opportunities now available. I had the privilege of attending GAWDA’s four-part Kiingo AI Bootcamp. I’d also point you toward the websites, bots, and forums available from the Distribution Strategy Group (DSG) and the National Association of Wholesaler-Distributors (NAW) and its affiliate, Modern Distribution Management (MDM). I highly recommend DSG’s Applied AI for Distributors program, offered each June in Chicago — our own David Schaer from Computers Unlimited had a booth there this year.
How about now? We could not have foreseen today’s volatile landscape in the welding and gas distribution industry, defined largely by severe supply chain disruption. Geopolitical conflicts and domestic plant closures have created critical shortages of helium, carbon dioxide, and hydrogen, forcing providers to prioritize resource security and supplier diversification. To address a growing deficit of skilled labor, the industry is shifting toward robotic automation and collaborative cobot technology to sustain manufacturing output.
At the same time, aggressive market consolidation is occurring, as private equity firms and major corporations acquire independent distributors facing succession challenges. Heavy federal tariffs and the expansion of AI data centers are further complicating the economy — increasing costs while also driving a resurgence in domestic production. Ultimately, the sector is evolving through digitalization and a transition toward decarbonized energy solutions like green hydrogen.
Each of those forces is changing how distributors operate, compete, and — most importantly — plan for the future. To effectively compete in today’s technology-driven market, new methods need to be added to traditional strategic forecasting techniques.
To keep building resiliency into your strategic planning, it’s worth staying current through some of the cutting-edge learning opportunities now available. I had the privilege of attending GAWDA’s four-part Kiingo AI Bootcamp. I’d also point you toward the websites, bots, and forums available from the Distribution Strategy Group (DSG, distributionstrategy.com) and the National Association of Wholesaler-Distributors (naw.org) and its affiliate, Modern Distribution Management (mdm.com). I highly recommend DSG’s Applied AI for Distributors program, offered each June in Chicago — our own David Schaer from Computers Unlimited had a booth there this year.
THREE QUESTIONS
What about tomorrow? I suggest you ask yourself these three questions when formulating your next strategic plan.
1. How are changes in technology affecting your operations?
When developing a strategic plan, be sure to consider how artificial intelligence is already reshaping your operations — often before you’ve officially adopted anything.
A report from the Harvard Graduate School of Education looked at how younger generations are using AI (gse.harvard.edu). It found that a strong majority of regular generative AI users are Millennials or Gen Z, while non-users skew heavily toward Gen X and Baby Boomers — and that a large share of teens have already used generative AI in some form. Are your younger employees using one of these tools at work? The tools worth knowing right now include OpenAI’s ChatGPT, Claude, Google Gemini, and Microsoft Copilot.
The Kiingo AI Bootcamp taught us how to build effective text prompts. For example, we were given a template prompt you can paste at the start of a conversation with your chosen AI, telling it about yourself and your work — so it doesn’t start from zero every time. They also suggested using your AI assistant to improve your email writing, do deep research and brainstorming, and handle information analysis through projects, GPTs, and skills. For the more technically inclined folks in the group, the last session covered apps and connectors — using third-party services directly within your AI, or logging into your own accounts to pull data from external systems.
2. What differentiates your company?
Personalization is your greatest asset. Make this a central part of your strategic plan. Focus on your company’s unique expertise and skills — the things that let you offer value-added services and real local visibility. Look at ways to improve bundling, assembling, repairing, and customer training, and use advanced technologies to sharpen those personalized differentiators. Regulatory pressures and cost headwinds will likely continue to slow the pace of competing online verticals like Amazon, Grainger, Home Depot, and the newer AI-native upstarts. Use personalization to protect and grow your market share.
Do you want to keep your competitors up at night? Consider asking your AI agent to run an analysis for you. I simply told Claude, “I want to do a Kill the Competitor on [name the local company].” What came back was a complete piece, organized around these headings:
- A Message to [my competitor’s] Customers
- You’re a Captive Customer — and They Know It
- Bigger Doesn’t Mean Better Service
- When Did You Last Benchmark Your Pricing?
- Family-Owned Is a Great Story. But Whose
Family Benefits? - What a Second Opinion Looks Like
- Ready to Find Out What You’ve Been Missing?
3. What means the most to your customers?
What continues to differentiate a distributor from Amazon, Fastenal, Grainger, Home Depot, and the other evolving players in this space? What I hear loud and clear, across every conversation I have in this industry, is that customers still value trust, adaptability, and deep local relationships. In your planning, think about how you can extend person-to-person availability in new ways that generate greater profit for both sides — including using AI to reduce the cost of doing business in areas like order and quote automation, SKU product information enrichment, sales system enablement, marketing, supply chain, and returns processing. AI can also sharpen customer personalization by giving you timely, accurate knowledge of what’s changing in each account. Make targeted investments in digital technology — particularly AI — a real line item in your plan, not an afterthought.
To illustrate how effective AI agents have become, let’s try “Kill the Competitor” prompt again, but this time on your own business! What customer relationship issues would be the focus of your competitor? Are there product knowledge deficiencies in some of your stores? Are there cultural issues? Weak geographic delivery? If you can look at your business, so can your competitor and your customers. Use tools like this to sharpen your customer relationship strategies.
From the positive positioning, one of the best tools available for personalization is Google’s NotebookLM. From your own research reports, you can generate podcasts, audio and video overviews, flashcards, or mind maps. Think about that for a second — you could listen to your own writing as a podcast, and use that experience to sharpen the clarity, tone, and structure of what you write next.
EXCITING TIMES
Traditional strategic planning methods — built on historical sales cycles and static SWOT analysis — can no longer keep pace with today’s volatile welding and gas distribution landscape. We live in an exciting time for distribution. How are you planning for what’s ahead? Make sure your current strategy addresses new technology, personalization, and the things that make your company genuinely different — because those are the pieces the old five-year plan was never built to capture.
