Typically, one associates fervent support for the latest technology with someone in the field, whether a software engineer or IT guru. Who doesn’t necessarily come to mind, although it can be argued they should, is a C-suite credit officer.

But in talking with Chris Arrington, senior vice president and chief credit officer with SRS Distribution, he makes the case that people working in credit should be among those spearheading tech-focused approaches to their work.

“I'm very passionate about empowering our talent so they can do more and be effective and be more efficient for the field team that's on the front lines trying to sell it for our customers,” he said.

This drive to strategize and implement ways to make SRS’ workforce more effective has contributed to the distributor’s successes, but just as important to Arrington is having the motivation to see implementation through, even if there are stumbles on the path.

Making Changes

After earning his bachelor’s degree from Oklahoma State University in 2004, Arrington joined Ferguson, a leading distributor in the plumbing, HVAC, fire, fabrication, and other sectors. He went through its Management In Training program, which put him on the path to multiple supervisory roles in credit, including commercial credit in the Texas and Colorado markets.

He eventually became director of credit at Ferguson, and the company grew from a $5 billion to a $17 billion publicly traded company. In 2020, the opportunity arose to join SRS Distribution, where he could lead his own team at a national level. He said SRS’ growth and culture, as well as the fact that 25% of the company is owned by employees, drew him to the distributor.

“You really don’t hear about that, public or private,” he said. “That was one element. Second, it was just their appetite to move fast. They want to be the leaders in technology, digital adoption, thinking outside the box.”

Those elements spoke to Arrington, who, in addition to his undergrad studies, took courses on leadership at the University of North Carolina, American University, and even some graduate-level classes at the University of Denver to learn to code.

As the senior vice president and chief credit officer, Arrington oversees both SRS and its Heritage group and is responsible for credit extension, day sales outstanding [DSO], cash application, collection of A/R, and customer set-up functions. To do all this, Arrington champions the adoption of technology to better serve customers and attract, retain, and enhance employees.

“We've used technology and resources to automate administrative and manual things … and so that attractsa higher level of talent,” he said. “Especially the younger generations. Do you think that they want to do it the way it was done 50 years ago with … a massive amount of spreadsheets?”

A Distributor of Technology

As a veteran of the industry, Arrington is familiar with the typical challenges facing companies like SRS Distribution, including labor. But he goes a step further, recognizing that “change” is one of the toughest obstacles to tackle, often appearing when trying to implement new technology.

“I think with a lot of things … you have to change, but you have to see it through,” he said. “It might take a year, might take six months, it might take five years, but we're going to see this through.”

When he arrived at SRS, he said he had made “massive amounts of change,” which he admitted people didn’t like; he even lost some employees because of it. However, the results speak for themselves: he says the company has tripled its sales since 2020 with roughly the same number of employees. According to Forbes, SRS’ revenue in 2020 was reported as $3.1 billion, while in 2023, it was reported as $9.6 billion.

One of his pushes at SRS is to use technology to enhance its talent. This can involve compiling multiple data points—like a customer’s ability to pay or going past due on an account—and making them readily available to employees. 

SRS-group.jpgThe credit team of SRS Distribution meeting for its Annual Credit Managers Meeting. Photo courtesy of Chris Arrington. 

Combined with services like automated messaging, online portals, and even tech that automates credit limit increases, it’s about streamlining the work. Arrington said this has helped SRS improve its DSO and have less bad debt.

“We have automatic approvals when they apply, if they meet a certain criteria, and then we let our talent go ahead and deal with the more critical items that are relationship-oriented, or the bigger accounts that need a lot more than just automation technology,” he said. 

Conversely, without technology, Arrington said the same amount of work requires more time and labor, which can become costly and ultimately slow down the process for everyone. 

“A $5,000 balance you’re going to have to mess with? You’re spending the same amount of time as a $5 million account, and then everything becomes equal, but then you let the bigger account slip away because you don’t have enough time or attention on it,” he said.

One technology that is set to revolutionize the way distributors and the world in general do business is artificial intelligence, and it’s not about to go away. ChatGPT, an AI-powered chatbot that does everything from coding to writing contracts and essays, gained 100 million users within two months. By comparison, Facebook gained the same number of users in four-and-a-half years.

Arrington envisions AI playing a pivotal role in distributors' operations, especially as more baby boomers leave the workforce and the labor pool remains shallow.

“If that labor demographic is happening — not just in our industry, but everywhere — how do you fill that? That's where AI comes in, to kind of fill some of those labor gaps,” he said. “If it's not happening today, it is going to be here in the next five years.”

He compares AI to how businesses have incorporated smartphones. Being just under 45 years old, Arrington recalls the days when you had to use a desktop computer and corded phones if you wanted to hold meetings or answer emails. Nowadays, all that and more can be done with a device that fits in your pocket.

“[AI] is not going to be ‘you get to choose to have it,’ it’s going to be a need unless you can, in the next five years, soak up all the labor from all the other competitors and from different industries,” he said.

Naturally, Arrington isn’t talking about replacing employees with bots. Instead, it’s supplementing administrative work with automated procedures and providing data analysis on pricing, inventory levels, credit, and other areas to empower employees.

“We want to use AI to pinpoint stuff, not only to make the supply houses successful, but if we get that information early and arm it with our talent, and they're trained for it? We can help make our customers more successful, too,” he said.

A Driving Force

Implementing technology is only half the equation. Arrington said there must also be a willingness to evolve and grow — the “change” he encourages the industry to overcome.

He likens the process of using technology to owning the latest vehicle – in this case, an electric car.

“You still have to drive and maintain it, so you have to build the infrastructure saying, ‘We're gonna do this with technology.’ But you have to have the right infrastructure to maintain that, to evolve it, and technology's gonna break, just like a car, and you're gonna have to fix it,” he said. “But you have to see it through.”

Switching from cars to sports, he employs a football analogy: You know what needs to happen to score points, but not every play will result in a touchdown — sometimes, it’s simply making progress in the face of adversity.

“Have a vision, have a plan, have the appetite and will for the plan, and know that it’s not going to go perfectly,” he said. “Things are gonna break but we're going to fix it and we're going to learn from it. So you’ve got to have the appetite to initially take that first step and find the right vendors to be able to do it.”

As much as he advocates for technology, his ultimate goal is to become the “best servant leader to your people,” whether that’s supporting employees or customers.

“A lot of my day is planning, strategizing, then motivating, seeing how it's done,” he said. “So, I'm taking pulse checks, and then I'm always looking ahead. I think that's what a lot of good leaders have to do at higher levels … you have to get on the deck of the ship and see where the overall ship's going.”