Innovations, Supply Chain, and Gen Z: The New Drivers of Wholesale Distribution

[00:00:00] Music There we go. There we go. I'll be Friday. It must be Friday. Yeah, love that too. Love that too. How are you? Okay, look at my beautiful new studio. That's right. Yeah, everything. Yeah, well, you know what, that's what happens when you move.

[00:01:16] So it's been busy week. Yeah. It is you week for you. But I'm here anyway. I don't have my good microphone, so hopefully it comes through our eye. Yeah, I'll get you. Gotta get that office set up properly, you know?

[00:01:30] Yeah, we can't rely on good help for that. Look at that beautiful plant back there. I mean, that's what more do you need? That's right. You'll have it all. I'm confident for the big show next week. You'll have it all in place and all will be good.

[00:01:43] So that'll be awesome. Well, it's kind of getting ready and dive in Tom. So we are here again. Like we are just about every Friday and less there's a crisis of some sort. And an airplane of vacation or a hospital, I guess is the case.

[00:02:00] And I'm Kevin Brown and I'm here with my lifelong friend and co-founder of Lead Smart Technologies Business Partner Tom Burton. We get together every Friday morning as mentioned. And we do this with our around the Horn podcast and live stream as we're doing today.

[00:02:17] And we talk about the happenings of the week throughout the world. Most of it typically in North America here, but we look at everything from the economy and supply chain wholesale distribution manufacturing. E-commerce sales marketing, supply chain issues, mergers and acquisitions.

[00:02:35] We talk about all those things that are happening in the news. And we try and break those down as we like to say, peel back the onion, so to speak on how that impacts wholesale distribution and manufacturing. So again, as I said, we do this every week.

[00:02:47] But what you'll notice is if you're with us on the live stream is in a few moments, you're going to see that newsletter that I referenced earlier. That goes out every Friday morning. Again, it's called around the Horn and wholesale distribution.

[00:02:58] And manufacturing goes out every single week to about 10,000 people or so. If you'd like that and you don't get that, you can certainly let us know. We'd be happy to share that with you. We've had a handful of requests for that this morning, which is great.

[00:03:14] And that goes out as I mentioned about 10,000 people. We review that here. So if you happen to be listening on on the podcast a little later date, you won't see that newsletter that's up in front of you. But again, you can reach out to us.

[00:03:25] You could request it at hello at leadsmarktech.com. Very simple or you could go to the website for the podcast, which is www.aroundtheHornPod.com and request it there. So we're appreciative of that.

[00:03:40] We're sponsored each week by the company, the Tom and I work for lead smart technologies. That's what makes this available. We have an editor and a producer and people behind the scenes helping us with this and leads smarts the sponsor of that as well.

[00:03:51] It leads smarts his developed AI enabled customer intelligence and CRM solution. So we develop for wholesale distributors and manufacturers. So before we jump ahead to last things, one, if you like what you hear each week, the best thing you can do to help us get out there.

[00:04:08] Further is to hit the like the subscribe or the follow button on the LinkedIn technology page on YouTube, Facebook, LinkedIn, or if you're listening on the podcast, whether you're on Spotify or Apple podcast or whatever format.

[00:04:23] Hit the review button and hit the subscribe button and that will get us out to more people. So that's special but Tom, something else happening. Next week. Well, I personally want to say good morning to Ron, RP, great to see him again. Fantastic.

[00:04:38] And Thomas as well, good morning and Marty and I think this is a great yes it must be Friday because it's around the Horn day. Beautiful, thanks Marty. But next Friday. Yeah, next Friday. I think should be a national holiday. Yeah, what's going on? Nothing usual.

[00:04:59] Just a few people coming together. The normal thing. So today is today is number 99. We've done this 99 times, it's just astounding to me that this little thing that we talked about getting a newsletter out

[00:05:13] that then turned into an effect I think I might have mentioned this year recently. I went back a while ago and went to the lead smart LinkedIn page and found the original show that we did.

[00:05:24] And they're not perfect now but they sure are a lot better than they were at the beginning. But we came together quite some time ago and said let's give this a try.

[00:05:34] And here we are now, but you know what's interesting is we're coming up as to get today's number 99 coming up on 100. And we've put together quite a group of people here.

[00:05:45] Most of the folks, Dr. I think all but one of the guests that we have for the 100 episode has been with us before and are just great people.

[00:05:53] And you know what I look at this time is something, you know, I think first thing we can think about here is that we want to use this 100 episode to promote the show and to promote lead smart and whatever it may be.

[00:06:08] But you know the reality of this is this means nothing what we're doing. If we didn't have the people that come every week, you know there's hundreds of people each week.

[00:06:17] I put up kind of, I don't know if you saw it or not and I know you had a crazy week but I posted something on LinkedIn the other day because I asked anybody if they had connections or contacts in an article.

[00:06:27] Or if they might be going there because I was looking at some of statistics for the podcast and we have every week we have six of seven continents people listening. And it was an article that we've never had anybody in Antarctica.

[00:06:45] I looked back to the beginning of the podcast and it does not show any. I could have a whole sale distribution. Well yeah, so I don't know what's wrong with that but we need to get that so we have those stats in place.

[00:06:57] But my point is you know we're not here because we're trying to pat ourselves on the back of the 100 episode thing.

[00:07:03] The reality of it is each week we get more people each event I go to each it seems like almost every day there's an email coming in with. Somebody that we might not have met before maybe heard of their company before that is requesting the newsletter.

[00:07:16] So something's going right here but it's because of people like we have on the screen here that have been great guests for us and are coming back again. So let's hit them real quick. We've got some of these folks are famous and some of them are infamous.

[00:07:30] Some of them have the risk of being on a post office wall as well. But we got Ian Heller with the distribution strategy group joining us. Dirk beverage with unleashed WD and we supply America tour going to be with us.

[00:07:46] Dirk's going to be with us from the road as texting within the other 80 trying to track down where he's going to be. He wasn't positive exactly at that part of the morning where he was going to be but we got Mike marks you know Mike is.

[00:07:58] Mike's the spark plug for that show I think. There's a lot of spark plug there. That's true but I guess Mike is the one that you just don't know what you might hear.

[00:08:12] Right you just don't know it would mean you know what I can be a wild card sometimes too but we've got our good friend Mike pocket Mike spent on the show multiple times with us Mike's managing editor. I think that's right with modern distribution management.

[00:08:28] It's a great morning with Glufflin who's with us today. Marty just made a comment a few minutes ago. Marty is founder of Mozayah Partners which is a strategic marketing firm that works with wholesale distribution and manufacturers and helping them.

[00:08:42] Find their voice in the market and understanding their customers better and how to market to them better. Marty's the former Chief Marketing Officer of Affiliated distributors. We've got Dan Schubert with us Dan is just on his way back now with probably an emotional hanging over from a

[00:08:56] week at the Republican National Convention he's had some pretty amazing posts from that being in Wisconsin this week but Dan's the chief revenue officer of the National Association of wholesalers.

[00:09:10] And then round and out this group is our good friend Paul Kennedy and Paul is the president CEO of Dakota Supply Group with DSG with us regularly been on the show before as a good friend.

[00:09:20] Great human being and an icon in the distribution world so I'm pretty impressed and I guess. Marty's concerned that he's not going to get a word at edge wise with.

[00:09:32] I'm not so sure it's going to be you know, Dirk isn't going to be the only talker in that group. Yeah.

[00:09:39] The other side of that Marty isn't pretty confident that Dirk will let you talk because I know you've signed some invoices for him a few times when he's done some of the events that you've been. But just to wrap up and we'll get in the news here.

[00:09:49] I just want to this is not going to be the normal episode where we're going through the new.

[00:09:53] But a handful of topics similar that we did to the game of the year kind of midyear review on a number of different topics and get feedback in the world that's here.

[00:10:03] So a little bit of a different format but yeah, I don't think it's going to be a quiet ship let's put it down. No, but it's going to be a lot of fun.

[00:10:09] I can call it calling it the Aloha Friday, Potapalusa because I think how I sent the invite out to these gentlemen. So we've got it's going to be a fun day but you know, before we jump off this in all seriousness, this is going to be fun.

[00:10:25] Maybe some giggles there's going to be our editor and producer. John Taylor is going to be with us for the show.

[00:10:33] John will do some fun out takes. I think we'll have some great bloopers probably will keep some bloopers from before we go live and after as well, but.

[00:10:43] I don't want to sound sapy there's there's a better word than humbling, but I'm just going to say I'm grateful and appreciative because all of these gentlemen are our leaders in their fields, their leaders in their organizations and their busy people.

[00:10:56] So the fact that these folks took the time out to spend some time with us on that day, I'm grateful for. So we're looking forward to it. Any other thoughts before we do that I guess. I signed up you can go to the lead smart tech.

[00:11:09] Wait and paint just right at the top you can sign up to register for the live of the. Yeah, so and let's see what breaks out that could be a lot of fun. Yep. Very good.

[00:11:19] All right well like we said every week we get together we chat about the news and we start if you're not able to see the news. That's okay.

[00:11:26] The news letter though has is broken down in a segments we start off with talking about the economy and supply chain and then we move through some different areas. So we'll talk about that as we do that but Tom you know we'll we could probably.

[00:11:41] Pretty funny right I saw you face to face earlier this week and we had a stake, but but the company bought it this time because it wasn't part of the bet.

[00:11:51] Neither one of us is given in on it but there's no articles about interest rates in the US or or ups and downs of things other than we start off with an article.

[00:12:06] Modern distribution management recap this but there's a link here in the article if you get the news letter if not you can also find it both on our website for the show and and modern distribution management.

[00:12:15] About the international monetary fund a modestly lower is US growth outlook as global. Markets whole so kind of an interesting piece with that any initial thoughts on it.

[00:12:29] You know it was interesting and again I'm not an economic or a economist or whatever but if you looked at the growth rates in there. They're kind of right in alignment with the inflation rate.

[00:12:40] I'm not just here but across the countries are there so actually right what's not clear to me and reading this is growth continuing from prices increasing. What's the driver of the driver?

[00:12:53] Great point is it a price increase as a more demand is it all of that that wasn't 100% clear so.

[00:13:01] I think that would be interesting to know a little bit more about but yeah seemed that was a jumped out of me right it so I was like okay is this just a matter of.

[00:13:09] I guess this is continuing to increase yeah so just to quote a little bit of this years right the global economy's expected to grow 3.2% this year unchanged from what they said in April.

[00:13:20] But slightly down from the 3.3 and 2023 but they highlighted the role of China and India which are projected to account for nearly half of this year's global growth.

[00:13:33] So I thought that was kind of interesting what would triggered for me about that you know and by the way part of it why they talked about other markets being a little bit slower were.

[00:13:42] Inflation related to services in the market place we're holding up and then there's limited progress on disinflation so they talked about these that term complicating things with that.

[00:13:55] What what triggered for me though is we're going to talk about this a little more a little bit more later in today's show and we talked about it regularly.

[00:14:04] Is the idea of on-shoring and near-shoring and that's just not boosting in this country that's boosting another part to the world so with China being the strong China and India being the strongest growth factors there in.

[00:14:18] China being that manufacturing you know, bulwark that they are as we start seeing that will be interesting to see if there's any updates.

[00:14:26] I want to this something I want to pay attention to a little bit closer as the year progresses and then certainly into next year and see if that issue with China starts to fade a little bit based upon the potential of some on-shoring and near-shoring so we'll see what happens with that.

[00:14:41] So before you go I just I just subscribe this morning to the IMF newsletter and they let you pick out a bunch of countries that you're interested in and there's a they have their own newsletter that comes out.

[00:14:55] What one thing I wanted to mention before going on if this is you know something that intrigues you about global outlook on overall growth.

[00:15:03] The data and the charts and they're not sometimes we have references in some of our articles to charts and graphs that are just you know you'll fall asleep if you look at them for 15 seconds. These are pretty dynamic and valuable charts that I saw so.

[00:15:21] I'm not the numbers guy in the science guy that you are but I need the visual impact from but I think some of the stuff that IMF is doing is quite interesting to watch. Good.

[00:15:31] All right jumping ahead next article in the economy and supply chain is about supply chain from CNBC America's freight recession is nearing its end logistics experts say. This was kind of intriguing to me to watch back because we talked about we talked less recently about trucking.

[00:15:48] Then we do about the overall supply chain efforts shipping air freight we've been talked about we've talked about all the port challenges and so forth regularly. But there are some good key points in this but any key takeaways for you.

[00:16:02] Well I want to do your take on it more I think as the two shake.

[00:16:07] Yeah, no I this is an obviously my forte the logistics part of it that what what in your mind is do you believe is changing with the tracking industry and why was it that recession for that.

[00:16:23] It was it just because there wasn't enough enough for them or there wasn't enough coming in for the for the tracking and the intermodal to work on what was causing.

[00:16:33] Yeah, so we had all the issues that went with COVID right things chips getting stuck in the ports and so forth but there was during a slowdown you had and I think the article talked about that. There was just trying to remember let's see.

[00:16:50] Over the course of last few years yellow freight convoy freight and flex port were all big rep to sorry flex port just major struggles but yellow freight and convoy freight to the biggest carriers went out of business.

[00:17:04] So we've had huge issues with tighter capacity and as you've gone through that and then the recession area times it's just been hit them from all angles and so that's that's a big fairly big factor with it and now they talked about you know this this.

[00:17:20] This uptick that's going on right now a big part of it is tied to people they've been depleting inventories.

[00:17:27] And now they want to bump inventories up and we've talked about this a number of times is people are looking to bump inventories up significantly because of the issue in the that's article particularly quotes the Suez can now is being the biggest issue and I think what's interesting is it's.

[00:17:46] Because they're you know we talked about the the depth of the lake on the far side of the Panama Canal and that Panama Canal is little less water some ships can't get through it's slower to get them through now there's a bottleneck there but we just don't hear about that as much.

[00:18:05] It's interesting it's this is a whole bigger geopolitical thing that we won't go into but it seems like every week. There's two or three of the articles that we're either posting or looking and talking about or that I've reviewed through and in curating all of this.

[00:18:25] You know I mean I think most of us have heard of who to rebels before but not having an impact on global trade like they are right and you've got this whole issue where there what was the statistic thing I read a while back on.

[00:18:39] I think it's a very important thing that we've heard on it was on 60 minutes I think they said you know they're using 25,000 dollar drones.

[00:18:46] To attack these ships and it takes a $2 million or artillery blast or to take them out and so this is an interesting thing and that's so that's a big part of this why. Inventories are increasing and then it talks about the other key takeaways from this was.

[00:19:07] North American distribution facilities and top five retailers show freight volume is up by 30% year or year in June so we just talked about that increase those rates are increasing a bunch of what they talked about here those well-time was retail but you know as when you think about things related to.

[00:19:24] I was thinking about that this this this morning in the shower and you know retail wholesale you know wholesale distribution you know some people might say well you know that's retail but you know the reality of it is.

[00:19:37] When you're driving down the road and look at that truck going by you with the container that says your cost go on at or you know MSC or whatever that the freight company might be you don't know it's in there.

[00:19:49] That could be a wrench or a hard hat or a valve or a fitting going to a distributor or it could be children and real little girls dresses going to a retail.

[00:20:00] When you look at that just even the picture you know of the port of St. Peter or Long Beach here. LA in Long Beach that's in this article you know it's in those containers right but the issue of the trucks and the ships is all the same.

[00:20:12] Sure. So what we see whether it's that retail inventories I think we're seeing the same thing going on the other side. Okay. So that helped this. That helps you know I've already had a couple comments before we leave this.

[00:20:26] Will brought up he will could to see you here. I wonder if the near sure and will change significantly depending upon who wins the presidential election in the US.

[00:20:36] Interesting idea the only thing that I'm wondering you know the one area that I think both parties tend to agree on is the tariffs. That's you know both both parties have been emphasizing more care to more tariffs with China and so forth.

[00:20:52] Will that actually that won't change one way the other will that really affect the near-shoring piece right because the near-shoring piece could be related to the tariffs and the other things that are there.

[00:21:04] Well that's that's I like that comment. I hadn't hadn't thought through that I appreciate that will will have to see what that holds out.

[00:21:12] That'll be an interesting one. That'll be an interesting one to watch any thoughts for anybody out there on that we get some nice comments coming in today let us know your thoughts on that as well. All right should we move ahead? Absolutely let's jump.

[00:21:29] We're at our next spot here as we jump into our manufacturing distribution top three actions for manufacturers to drive innovation. Top three technology technology. Wow that's a that's a shocker I would have never thought of that for me.

[00:21:51] No, I mean it was what if our member was technology people and. For example, there's on short. We need factories back right it's back to the restoring piece right it's exactly right with that so yeah they talked about taking advantage of emerging technologies.

[00:22:06] They were they were looking at the increase implementation automation within businesses digital solutions throughout factories and and gaining that accuracy quality and efficiency both in distribution and manufacturers as well there but the second point was in fact bringing factories back to North America.

[00:22:26] And it's interesting one of my takeaways from that as we talked about reshoring is going into that article you know I think. We've got distributors that buy.

[00:22:39] And the manufacturers offshore they've got things coming in and sometimes those things are being kitted or assembled offshore and manufacturers certainly are doing a lot of assembly not just manufacturing offshore and I think one of the. And I think that's a great opportunity to have.

[00:23:01] Starting to kind of dip your toes in the water with reshoring because we think about manufacturing right there's a big difference between John dear you know or honey well or three M manufacturing offshore and.

[00:23:20] Equipment company with you know 25 employees maybe somewhere and how do you how do you dip in if you're not a global player how do you dip into reshoring on that really what came to my mind is assembly is probably the best place to start.

[00:23:37] Now I'm not an I've been in the manufacturing site is invested in the manufacturing company for a number of years and we started doing some things. Both manufacturing some assembly stuff in Mexico.

[00:23:48] We didn't have to do one here or two in China, but I think that that assembly and kidding type thing might be a great place to start where maybe you're bringing in some raw materials from multiple suppliers.

[00:24:01] But you're doing the assembly here to ease into that so I think that might be a great place that we see people getting to get started in that.

[00:24:09] So if you're doing it's assembly right in an area and your brain and you're kind of parts you know now you have a supply chain to in order to be the assembly that's there. Would you in order to kind of.

[00:24:26] When we try to say to basically get around some of the problems right. Would you in the bring in a lot of that inventory you know really bulky up on the inventory and then making sure that you're ready to build a symbol whatever you need to assemble.

[00:24:40] I know there's probably not a yes or no answer, but it seems like it it opens up a lot of the same issues.

[00:24:47] Well, I think what it does is it actually alleviates a lot of those issues if you pour to plan that right and I'm certainly not a logistics or an inventory management expert.

[00:24:58] If you think about it right if I decide that I'm going to shift in that setting from I'm using factory A and factory B to make similar same items for me right and typically it's more like it's more likely be one than multiple.

[00:25:14] And I've got them sending me a finished good. If I decide I start doing my assembly or kidding or whatever I'm going to do related to that.

[00:25:23] I can now manage my parts from those better and if I have a generic part maybe it's some tubing maybe it's something that's not a branded product that I have to have.

[00:25:35] I can have two or three vendors that I could be calling on maybe I even have one.

[00:25:40] You know here in the US as my backup and I can manage my inventory is across that versus being tied to one particular company that happens to be in a company that in a country that you might have some challenges with geopolitical issues or whatever it might be.

[00:25:54] Okay, so that's just I mean just maybe you know what I just miss something. I just all I hadn't been able to see the comments at first the comments came back in this was quite some time ago, but you see what's on my mind.

[00:26:09] Marty mentioned a comment earlier about a Tiki bar so yes it is a low-ha Friday and my ties will be welcome during the hundred episode show so Marty if you want me to have some my ties delivered your house let me know I'll make that happen.

[00:26:24] You want to have a my tie I will have one delivered to your home.

[00:26:29] All right, how's that? Friday my mind shifted but anyways back in closing out on that right on that you're driving innovation it was it was great there some solid points in there when you start thinking about the last piece time that we didn't talk about and we're going to talk about this more later in the show is people right when we got.

[00:26:49] The great distribution people person dirt beverage coming on with us next week we talked about this but I wanted to hit a stat here you know I like to reference these stats because I can just.

[00:27:01] Babylon for hours about my thinking on things, but let's talk about the stats regularly. It says in the US this says despite 13 million people employed by more than 244,000 manufacturers in the US there are still over 570,000 manufacturing job openings as of March 2024 so.

[00:27:22] Over a half a million openings in manufacturing and this is we've got we're going to talk about this further in some other articles today but investing in people in fact it's part of that as our next article as well.

[00:27:35] Yeah, it's pretty powerful about understanding how to fill those jobs so that was the fourth and final point from that previous article. Very good all right so as we dive in there as we talk about our.

[00:27:53] Continuing manufacturing distribution made to stay how production careers can entice Gen Z any thoughts you take away is there. A lot yeah and.

[00:28:06] And I mean this is not an issue that's just exists with manufacturing and distribution right is in the scenario that I've really been started digging into because.

[00:28:16] What I'm I'm going to you know, sure, I should write when we think of going to work right we and our you know in our childhood and we what our parents did or whatever.

[00:28:29] It was you went to work and you did your eight to five or nine to five.

[00:28:34] And that's what you did right and you will really focus right there was there was nothing else that was distracting you weren't doing I know in my early career we were not allowed to get personal phone calls at the office right unless it was an emergency.

[00:28:49] Right that was you know that was the only potential distraction right with those that are there so you went to the office you did your job and and you did the other things on nights and weekends right the one in your life.

[00:29:02] The world that we live in now doesn't think that way. And I'm saying this generally but it's generally true right and Z worker does not think about.

[00:29:13] Why walk in and do a nine to five job and I'm not checking my email and my you know my apps or my text messages or whatever it is that are there.

[00:29:23] And it's really it's struggle for a lot of companies right now to figure out how to make this work with this generation.

[00:29:33] Now if you take this in manufacturing and distribution or if you're working on the on the floor right on the concrete side of the business versus the card.

[00:29:42] Is it says here you're going to have to have the old way or you're going to have to just the old ways of doing things so trapped and retain. A generation for whom security respected making a difference make more than compensation itself I'll go one step further.

[00:29:57] I think it's the work experience as well right and I don't have the answer to it but it isn't the issue that I think we really have got to figure out. Not just in manufacturing and distribution but even in tack or anything better that are that.

[00:30:11] Well, we talked about this consistently you know on on the culture at least more technologies and you know I think you've got some strong opinions on that.

[00:30:20] You know Marty made a great comment here about Gen Z says are they more attracted to culture core values impact on this world and how my work aligns to me as a person.

[00:30:29] And I think that's true but I think what's interesting is you know we saw the previous generation it was typically more money motivated right and then you go way back right to our generation and our parents and I remember I think I've said this before here is I remember.

[00:30:50] I was asking my dad very early in my career and this was probably just as cell phones were coming out and I remember asking dad I said you know how did you do business before you know facts machines FedEx and pages right.

[00:31:05] Now look at that compared to where we are today with distractions and challenges and dad said it's because I came home it I was he said we didn't do it the way you do it.

[00:31:16] We worked from 730 to 530 and maybe brought a file home to review but we got to spend time with the family that was uninterrupted. And now think about you know what where do you find a household where everybody's not running around with the device.

[00:31:32] So very different but big motivator differences here I had a conversation probably I don't remember how long ago was but as talking to a technology executive in Utah and there's that you know whole.

[00:31:47] The corridor between Salt Lake and Prova they call silicon slopes now we were looking at some hiring there in that that region and I was talking to an executive and you know salaries for technology people are a little bit less they're probably 10% less than here in Southern California.

[00:32:03] But that this woman that ran a tech organization and is involved in in some associations there as well she her comment to me was it kind of ties into what Marty saying here and and there it's a little bit different she said you know.

[00:32:17] She said the culture that you're you would build with people here and why they're willing to work for a little less money is the quality of life right they want to be able to.

[00:32:28] Hey it's it's I want to leave it for because my this group that I cycle with are going mountain biking on such and such a trail today or a snow day right great powder day they want to go skiing.

[00:32:40] And so there's just different motivations where to your point earlier right and you know early party your careers no personal phone calls at work.

[00:32:47] You know you had a certain amount of you know PTO we didn't even talk about is this much vacation and this much for doctors and that's it and it's just the world is different now and and businesses and companies need to adjust as this article talks about.

[00:33:02] Yeah and obviously we don't have time to get into it I think that. I think there's gotta be an adjustment I think there's going to have to be an adjustment in both directions I think the Gen Z culture is going to have to learn that.

[00:33:16] Work is maybe not the way that they think it is but I also think on the other hand that is the you know the employer we're going to have to balance that as well.

[00:33:26] And I don't know that I can imagine I just was thinking back in the job that early job that I had which was a start up which was a tech company.

[00:33:34] If we would have it the idea of them thinking that people are going to have their cell phones in their hands or their computer all day long looking at websites and right I will not would have been like a concept that would have been unfathomable.

[00:33:46] You know I'm from a distraction perspective in the business so.

[00:33:52] Yeah, I think there the challenge is going to be with this and and and to mention to another people's thoughts as well but I think that if you say balance I don't think it's going to get balanced Tom I think there's going to be a bit of an adjustment that's needed you know to your point about both sides.

[00:34:11] But I think the reality of it is is that businesses are going to be having to adjust and find a way to make things happen.

[00:34:20] At a higher level of production than you might see sometimes today but I don't think you're going to change that you know what you're talking about is changing a global culture versus an individual's culture.

[00:34:32] And and that's a challenge so it's going to be interesting yep so it's going to be interesting times with that so. There's a good comment that came in here communicating these things is a differentiator for customers as well so. Good good good good good.

[00:34:50] Okay good article coming up here as well from published in supply house times and. I go here last night notes there jumping ahead to this was from Brad Williams with a barren's your group.

[00:35:05] It can talk the title is why big box retailers fall short against local industrial suppliers but it really talks about some of the things that are that are important that that.

[00:35:14] And local distributors are working on and you know it starts off talking about digital transformation and automation and. I wanted your takes on this as well time but you might take away was if you read.

[00:35:28] The the bullet points in this article separately they seem fairly generic when you put them together it's a nice kind of roadmap right for how to compete against the big guys and how to really differentiate.

[00:35:41] It was pretty comprehensive the the title didn't quite do justice to the article I didn't think yet but there was um yeah quite a. A good comprehensive as you said roadmap or blueprint for companies to be thinking about in order to compete and how to differentiate right between.

[00:36:00] You're not going to necessarily need to be the same as the other just have to play to your strengths. Yeah absolutely the it's it's interesting.

[00:36:11] As it puts us together one of the things and we talk about this regularly and conversations about data one of the things they talked about was fragmented legacy IT systems.

[00:36:20] And and that though it's both sides of this if you think about big box retailers you know it's it's a struggle for everybody to make change and there are.

[00:36:30] fragmented struggling systems at the big guys and we talked to people at the you know whom do you pose HD supplies.

[00:36:40] Those types of folks regularly some loads folks they're struggling there but they have the big big budgets to make those changes and modifications to that as a whole as well so. We see budgets and big budgets and big things don't always make your lean and nimble.

[00:36:56] Yeah, you're a loss of the is very slow yeah yeah they did five years to turn this ship were as a small company can turn the ship in six months.

[00:37:06] It's right I think there's a lot of opportunity for smaller players to turn the ship faster and to get a big competitive advantage over the big companies have all these resources but.

[00:37:17] I mean we see that in some of the larger companies we work with I mean just it can take weeks to make the most simplest of decisions which in a smaller company can happen and.

[00:37:28] Yeah, you're absolutely right I think that there were some key points in as they talked about. So digital transformation automation customer buying behavior and how many channel trends we talk about that all the time.

[00:37:42] fragmented legacy and IT systems and then industry consolidation and one of the things that we're seeing more and more through the M and A side of things is people buying adjacent. Right.

[00:37:57] And so I think that's a very important thing to be lighting plumbing by valve and fitting electrical and and starting to add industrial and maybe even industrial safety products to that as well.

[00:38:10] And sometimes that comes very quickly and I would I really appreciate it as they talked about the high degree of fragmentation.

[00:38:16] And so I think that's a very important thing to be in opportunity for M and A as well it made me think about you know if you are in a position as a as a distributor and you're.

[00:38:25] You're trying to position yourself well against the big guys you if you you might be lacking let's just use the you know the legacy IT and fragment of legacy IT systems that are they're referenced here.

[00:38:36] You know if you've got a strong balance sheet you can acquire your way into those systems as well right you could go.

[00:38:43] Kind of kill two birds with one stone you could find whether it's a competitor or somebody in a new vertical that you want to get into or new market you want to get into geographically. That is way ahead of you in some things.

[00:38:54] The higher that company because you have a strong balance sheet that will then lead you into that place of solving that issue that you have in your business. And we see that here and there so a lot of.

[00:39:06] Yeah, a lot of opportunities we appreciate that it's first time we've. We've used anything here from Brad Williams, Brad's with the barons your group there. Investment banker that does a lot of consulting with family owned. And we have a lot of opportunities to do that.

[00:39:22] We'll sell distributors as well so good article there so next we wanted to ask it. I'm going to real quick before we get here. Yeah, I agree I understand Ron I'm dating myself to it.

[00:39:31] You know, he's we're going back to our previous article right at a page you're just a page. It was definitely different right it's like. It was an exception to get interrupted or disruptive versus. It's being the ubiquitous situation that we we have now.

[00:39:48] Yeah, so he's right on I have to laugh when when I was just as cell phones were coming out. I had a small company that I just started.

[00:40:02] I worked as a reserve firefighter and I worked in two different locations for the Orange County fire authority here in Southern California. And I had one point in time where I had the bag on in my car and I had three pages.

[00:40:18] No, you know as I's a darling and my wife and I were just talking about this the other day because we were talking back about when we both had pages. And I said I always say that you know if I was important I would have no pages.

[00:40:33] There's other people would have the pages right but yeah because I had two different pages for the fire authority and then one for work and then I this new crazy you know.

[00:40:41] Was it you know three dollar a minute cell phone, you know that I had as well for conversations but those are those are the old days are RP. It was the old day so good.

[00:40:52] All right let's move ahead to our next segment of technology cyber security and AI are we skipping the commerce and marketing why why would we do that. I don't know. I just got. Yeah, let's not do that. We're going to catch that first article my apologies.

[00:41:09] Yeah, I forgot about that and that was kind of cool. You know interestingly enough is from digital commerce 360 how manufacturers get a B to B sales boost for man was on prime day thanks for keeping me honest on that two companies that they talked about here grasshopper company.

[00:41:26] Grasshopper makes the lawn equipment that takes care of the White House and lots of other places like that.

[00:41:35] And which you wouldn't really think about prime day sales and then a Dina braid which is a manufacturer of abrasives and cutting tools and and and power tool related items as well so for power tools I should say this was really interesting it is is in and basically what's going on right the prime day.

[00:42:00] Creates like that halo effect for e-commerce. Yeah, so people get all excited about. E commerce right with prime day much like I guess even black Friday or cyber Monday or whatever at the thing so it's like oh wow this is where I got to be thinking about bond.

[00:42:17] And even if you're not selling on prime is what they're saying they're not doing big prime day promotions on Amazon. They're taking it right in the way of essentially the writing that e-commerce wave and saying what people are in the frame of mind buying on e-commerce.

[00:42:34] I think it was really really a brilliant positioning and marketing strategy to actually do that and it's some.

[00:42:42] I hadn't really thought about it, but you know that does create that big halo effect for e-commerce every year and the B to B to B and B to C world whereas Christmas sort holiday time it's more.

[00:42:53] B to C but it still creates that that halo effect for you can jump into. No, thanks for sharing that way Tom and I think you're spot on what's interesting about this is in in the quotes that you're here tie right into this right is.

[00:43:09] Distributors have it's kind of like a three tier approach right distributors either fully embrace Amazon and want to participate and understand that their vendors have a presence there and so forth or they are.

[00:43:25] Maybe having wanting to have a presence themselves of some sort but frustrated with their manufacturers being there.

[00:43:32] Or third is they fully embrace the whole thing right, but some of them are just we want nothing to do with any say Amazon out loud in their presence and you're going to have it a struggle with it.

[00:43:44] And then you've got a on the manufacturer side, you've got a whole lot of them who are in a position where they say there's no way I'm going to upset the apple cart with my distribution network.

[00:43:56] So we're going to stay away and then there's others that look at it and then it's I guess it's threefold here three points here again is there's others it's a well you know what it's just another distributor Amazon business and in at the end of the day that's really what they are.

[00:44:11] Another distributor they just go to market differently and I'm going to embrace that and then the third that's more pot most powerful that which is what these two companies are doing grasshopper and Ina brain is they're embracing Amazon to sell as a platform but they're also trying to use it to support their their network of distributors as well.

[00:44:30] But you could do this even if you're not selling on Amazon at all if you have your own website or your own website you can still have a prime day special and ride that way. Right, just the positioning perspective.

[00:44:42] Yeah, and you buy on your website but you're giving it to you all or you're providing some you know. Discounts or whatever it is you can still ride the way.

[00:44:50] So well yeah I think you know both of these were have a position and had had a place on on Amazon as well. And these in this case study yes.

[00:44:58] Yeah so in here the two things right run of leaders that's global brand manager at Dina Brade makes some good comments.

[00:45:07] I've had a chance to meet Ron a couple times it's affiliated distributor events in superguide and you know he talks about their their Amazon storefront but what's interesting in this is you know that both of these companies saw this nice lift out of what we think about is that you're going to buy shoes or toilet paper or.

[00:45:26] You know some sporting equipment from Amazon prime they saw it with you know pneumatic power tools and and average price of this. Grasshopper company their average product price is 20,000 dollars.

[00:45:40] Right so they saw that last thing I wanted to mention about this article because he's a friend of the show is both of these companies received it. I'm going to quote the article both grasshopper and Dina Brade had received advice on Amazon Marketplace strategy from in Ciba.

[00:45:55] A digital marketing agency and that's our good friend Brian Beck branches to great great guys been on the show a couple of times and he's in there's I'm sure plenty of other firms out there but Brian works with.

[00:46:08] A lot of big big companies like this in helping them find that balance of their strategy so that they can support wholesale distribution while having a presence in market and just Amazon but Marketplace is as well.

[00:46:21] So if you get a chance you're looking at that once some feedback on that Brian and the in Ciba folks are are solid on that. Okay. All right where we headed next.

[00:46:32] AI readiness requires buy-in technology and governance let's move on that fairly quick this morning any big takeaways from you.

[00:46:42] Well I think in general and I'm pleased to see this right I'm pleased to see rather than we're even seeing this and talking to our prospects and customers rather than just trying to patch in some sort of AI.

[00:46:57] Companies are recognizing it goes back to our data discussions we've had over and over and over and over right that there is a readiness process.

[00:47:06] To get ready to actually do more of a holistic AI strategy right patch work piece and I think that's good I think you know a lot of everyone kind of ran out of getting one of that cool AI app somewhere here and there.

[00:47:20] We had called patchwork AI and I think people are realizing the value that is being received from that is.

[00:47:27] Well interesting in some cases minimally overall compared to what they were expecting and realizing the importance of using their own data and not only their own data but their processes, their best practices all of those things and then having the right.

[00:47:42] And so I thought this was a good overview of that I do believe that in the next year that is going to be a big team is AI readiness I feel like a lot of the work that we do.

[00:47:53] You could say what we're doing CRN and customer intelligence maybe that's 50% and 50% of what we're doing is AI readiness right and getting the thing that people in place ready for actually.

[00:48:05] To take advantage of some of the things that are you know hopefully coming down the road sooner than later.

[00:48:11] Well, you're spot on I think with that and this isn't and I think this is what distributors are very quickly learning is they've spent so much time in the last year and a half two years and it's really since like what was in November of.

[00:48:27] And so the first thing that I think is that it's been a year and two when opening a high popped up right is it triggered so much for people. And now what I was talking to a.

[00:48:35] A writer in researcher in this field that earlier in the week about this and now people are saying okay we can see this vision of what's coming. There's limited amounts of things that are really available today that work really well.

[00:48:50] And so I think we go build my roadmap to make this. Make myself you know in a position where long term I can be. Be executing this and my my philosophy on this and it's kind of our philosophy.

[00:49:02] I'll say from the company standpoint I wrote something on LinkedIn earlier this week about this is you I used the term. In AI readiness and it ties into what you're saying about you know the work that we do it that leads part with helping.

[00:49:15] And so the distributors and manufacturers you know the work they're doing to get customer intelligent AI enabled customer intelligence and CRM. Is work that's going to help them in the long haul on their AI readiness in general.

[00:49:28] I used the term in a post I did earlier this week and I said you know it's that old adage that if you want to go fast go alone. Right if you want to go far go together.

[00:49:39] And I think that ties in really well to identifying is my organization. I think very, very few gentlemen that's talking to me over the week he said you know outside of the grazers or the fastenalls or the the West goes or those types of organizations.

[00:49:54] It's going to be difficult for wholesale distributors that even with good size IT departments to go figure out their AI not just their roadmap but actually executing against it.

[00:50:07] And they're better served to have a partner that can be there you know walk hand in hand with them through this to help them in their journey.

[00:50:16] Well the other reason of having the partner is it's so easy right in your own company to get caught up in the analysis paralysis. I'm trying to let you know great get into the way of good and or perfect perfect getting the way of progress.

[00:50:33] And I think having that it's almost like an AI coaching exercise that I've seen a lot of what we're doing is like no.

[00:50:42] Here's what we can do here here's what we can do here and help them make those decisions quickly so we don't get caught up in this analysis paralysis on things. Perfection AI does not need perfection that's not it.

[00:50:56] It's not a prerequisite what AI needs is the right foundation and that foundation can be actually kind of even mediocre and still get a lot of very positive outcomes as we as we look ahead so.

[00:51:11] Yep, no I think that's great. I mean, I think the reality is if you can get started in these things with a trusted partner that has good AI solutions it can work with you through all of this.

[00:51:21] That's what's going to differentiate for people that gets to get fast opportunities out of things. Good. All right where we head to next time on the sales and M&A sales. Yeah, we'll get through this pretty quick here.

[00:51:35] Yeah, good. So they get an article here about setting sales benchmarks for farmers versus hunters and that came from the Center for Sales Strategy dot com and I just thought this was kind of neat.

[00:51:47] It talked about you know, you've got hunters and gathers right in your organization and as hunters and farmers or so to speak and this was a good article talking about you know some benchmarking for that whether it's what are the metrics for each of those.

[00:52:01] How do they balance out you know sometimes we think about you know a hunter is generating leads and he meetings going.

[00:52:09] They talk about conversion rates here in farmers that are cultivating those relationships that get started by other groups so you know they talked about that and a lot of it was balancing between the two.

[00:52:20] And then finding a harmonized compensation and success plan to go with all of that.

[00:52:26] So if you're managing if your sales leader and you're managing both hunters and gathers or hunters and farmers as they reference here balancing that component and I say what I've lived that trying to try to manage that compound on both sides it's how do we do that and and you know it's.

[00:52:47] It's very different because you'll find organizations where you know you'll have and it's not just this is on the sales side not thinking about the.

[00:52:55] That lead gen type stuff that goes on and marketing but it's like if I'm out there you know working hard to get that customer in the door.

[00:53:04] I'm going to expect a very high commission rate or compensation that goes with that but you know oftentimes it's that it's that farmer or gather farmers they recognize it here that really gets that customer to the next level where all of a sudden what the sales guy sold if we just kept selling a mat.

[00:53:24] We wouldn't ever grow very much but it's that farmer and but they typically not compensated quite as well in that setting so good article here.

[00:53:33] Well we have a customer that I think one that I'm thinking of that has done really good job with this you know they're in the office supply.

[00:53:42] And the way that they've set it up is for their hunters in order to get the commission credit for a new account. The account has to buy twice. And I want to ask about it twice.

[00:53:56] Once the account has bought twice it didn't get handed off to the farmers if you call it that whose job is to obviously can keep keep the recurring stream going but increase the wallet share in the way and take advantage of the white spaces in there.

[00:54:12] But look at you with all these distribution terms. I want to know if they're distribution terms or not but the idea of getting and I think it's really smart about getting not one purchase from that first that first process that's that right once they purchase twice.

[00:54:30] Then it's like okay there's a relationship and I think what they've realized is that the relationship didn't really exist just after one purchase right.

[00:54:40] But after two purchases and this is office supplies and office materials and you know, holds to a type of things then you start to build a relationship and now you can effectively farm that account building forward so things like that I think are and we're seeing more and more I think I'm seeing more and more companies I'm working with want to do more hunting.

[00:54:58] And not just you know focus entirely on the farming piece so. Yep, that's great very good like that. So let's slide right into our people and leadership segment there's good article that we posted here and.

[00:55:13] This was from human resources director magazine and it's talked about coaching deficiency leaders worker and workers dissatisfied with mentorship level and I just I thought kind of like that. That is a good article about people being coached versus directed any thoughts on your end on this one.

[00:55:34] Well, I think it ties exactly what we were talking about earlier. It's the same concept and in particular with. And I think I think that is the right solution for this whole Gen Z problem. Mm-hmm. Look at it from a coach perspective, right?

[00:55:48] Because a lot of people don't want to do something people don't want to do a good job but they don't want to.

[00:55:53] Have a great you know result and their job and their company, but I think they need coaching and help maybe more so than previous generations on how to accomplish that.

[00:56:02] And if you look at it from that perspective, or just saying go do that and you know just being the boss and telling them what to do and all that stuff you're going to get much better results. Hence what's there talking about it?

[00:56:14] My wife taught me decades ago that saying have you considered is a lot better than you should. Mm-hmm. Right. And that's just this most simplistic piece of it all, but this was good.

[00:56:26] It article talks about some statistics and in one of the quotes here it says what people are looking for. Given the world of change in ambiguity is for someone to coach them through thinking about a solution, not providing the solution.

[00:56:40] Makes me think about this Tom you may remember this. There's Dan Martell who's a. A former technology guy that now does coaching and guidance for. Sass founders and startups like ours.

[00:56:59] He has I think it's called one three one rule with working with his team and you know people will oftentimes come to a leader and say, you know how do I do this or I've got the example I was watching one of his videos a while back in the example is an HR person that said,

[00:57:17] Yo, I need to hire 12 people this month. What do I do? And his thing was take time out. You're the HR director. I hired you to tell me what to go do here.

[00:57:29] But his comment is I think the one three one is one is clearly defined the issue at hand. Then he asks for three possible solutions and the related outcomes to those.

[00:57:44] And then the one after one three one. The one is what is the first one that you see right now that looks like the right solution. And he said something like 99% of the time. Conversations over as soon as you get some started on that discussion.

[00:58:00] I feel it's a good cultural mindset that people start to do on their own exactly or not just knowing right that my boss is going to ask me one three one.

[00:58:09] I want three one strategy. Yep, and then maybe I might give you an opinion or a thought or somewhere else to look.

[00:58:15] But I'm not going to solve it for you. So Marty made a good comment here. So many roles that a manager needs to play for Gency employees.

[00:58:23] Also time is value is important with short tenure Gency employees. And that's that's one of the key things and one of the articles we hit on earlier today actually talked about that is when you start understanding how to work,

[00:58:37] especially in manufacturing how to adjust the culture on a manufacturing plant floor that fits more to a Gency. Right that job and we see this in the technology field all the time right is you know you see people that have been somewhere nine months and then

[00:58:53] You know 12 months or 16 months and they're just bouncing around and moving on but we can appeal to these people if we develop our culture within our organization correctly.

[00:59:02] People don't leave jobs and the managers right so yeah great point yep, yeah our process is in system so you know with slight. I just took a couple of things to comment on that congratulations to folks at first supply.

[00:59:16] In Wisconsin top workplaces in the industry award that they received which is great by the way one final comment on this that I usually make it halfway through.

[00:59:25] Making it to tail end of the show if you're listening on the podcast you're not seeing the fact that we're reviewing through our newsletter that we publish each week called around the Horn and wholesale distribution and manufacturing.

[00:59:36] If you'd like that newsletter and you don't get it simple email to hello at leadsmarktech.com and we'll get that right out to you or you can sign up for it at our podcast website which is www.aroundthehornpod.com and we'll get that right out to you so Tom slide into our industry scuttlebott.

[00:59:56] I'm a acquisition by Valan the industrial supply company in Ireland has got them moving internationally now out of the US and Canada in Mexico. I'm a little bit more industrial in the Pacific Northwest you just did a headquarters in Pacific Northwest.

[01:00:10] I just did another acquisition and another acquisition for white cap that's discussed in there on the construction supply side. Lastly every week we have a couple of other features we talk one is a good read and the second one is what we call a second look.

[01:00:29] We didn't in the second look piece we publish each week it's usually a follow up article or something we've talked about this is about more read see issues in the Suez Canal area there but there's a pretty cool article here that we published and called your heart digital twin may save your life.

[01:00:49] Just give us quick as our resident AI and technology expert walk us through quickly a digital twin.

[01:00:59] What digital twin is a virtual copy of something right so in this case it's an example of taking a scan or doing whatever of your heart this example in virtual pretty day virtual. Copy of it essentially and then being able to.

[01:01:21] Use AI essentially to emulate and look at well whether the possible things that could be going wrong with that part or with whatever how do we improve that harder whatever it's a virtual copy of something that you can then.

[01:01:36] Coach you can then adjust you can make things and look at and even do what ifs.

[01:01:42] I would you to see I'm sure you could say what if I did a robe exercise for 30 days what with the heart look like after 30 days in terms of the beats and the pulse rate and all that kind of stuff so it's right they're talking about this it wasn't just hard it was all organ you know all.

[01:02:00] This was this was pretty cool this was um they talked about the article starts off kind of talking about the.

[01:02:10] The market size and so forth and they use that you know avatars that that we see in a zoom meeting and personas and so forth that we see and how to show ourselves with a pair of sneakers on and and that they're using that is some some.

[01:02:25] Some digital twin ideas but this what they're doing in John Hopkins University talks about.

[01:02:31] They're creating digital twins of real patients hearts with potentially fatal arrhythm is is where they're starting so that's an arrhythm is an irregular heartbeat said first patients complete a cardiac MRI then researchers use AI to turn the scan images into a 3D reconstruction of the patient's heart complete with scarring and damage cells that we're seeing in the heart.

[01:02:53] The on screen hearted then filled with virtual cells which can generate electrical signals and a heartbeat the digital twin can then be used to predict the location of a regular arrhythm is and plan out for future procedures to fix them just I mean this is.

[01:03:10] You know if we were if you know we were to be able to talk to our grandparents and tell them about this. Just be crazy right.

[01:03:20] Well, and I do believe this is the plus side of AI right I think this is a little is I think we will have a digital twin for obviously our physical body and all that stuff we're just talking about here will have it for our job will have it for our hobbies will have it for our things that we do and if you use properly.

[01:03:39] It's I mean think about just the benefits and the insights and the right spot on the ultimate guardian angel I guess for everything.

[01:03:47] Well, you know what's interesting is you know we've we've heard people talk about you know that we're going to get a chip in planet and it's down the road it's going to do all these things well as I commented on.

[01:04:02] In our previous conversation before we went on the one live today was if you look at this is like look if you can put me into a full body MRI replicate my body and then tell me.

[01:04:16] Yeah, good point. But then tell me you know it hey by the way these are the things that we see are going to likely happen to you and here's how we want a guide you and coach you and then you came and said hey you know what.

[01:04:28] And I think we're a ways away from this but if you said at that point.

[01:04:32] But a little chip in your wrist that's going to monitor these things even closer and give you feedback you know much better than your smart watch does give you feedback and give us feedback to help keep you alive.

[01:04:44] Powerful stuff right and so things that we thought about just being science fiction are right there in front of us right now I think it's great and those two your point right that's the beauty of AI.

[01:04:54] Right, that's a similar really cool stuff that's going to come from it. So we'll go from there. So let's wrap up today. I know you've got a full day ahead of you right. Well notice our first event here just want to make sure everyone sees the idea.

[01:05:07] We're going to make you right on there for the hundred it's right there right on the. On the fan here and we show every week in the newsletter is a series of events.

[01:05:18] Whether it's trade association buying group whatever it might be events around mostly North America those shows and events are there in the newsletter so Tom why don't we have splash back up if you haven't handy the screen for next week.

[01:05:32] We're so excited and grateful as I mentioned earlier for the folks that are going to be joining us next week. So again if you tune in late and didn't get to hear next week is the hundredth anniversary or hundredth show that we'll be doing it should see hundredth anniversary.

[01:05:46] Hundredth show that we will be doing we've been around now for a bit and then we got some great people going to join us. So if you were going to have made any of our shows this year, this is going to be the one to do so.

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[01:06:25] Get this out to other people so Tom hectic afternoon for you and wish you well in in the rest of the day. Yeah everybody have a great weekend be kind be safe and do good things.