Shipping Challenges, M&A, And A Whole Lot More, With Guest Will Quinn

[00:00:00] You know, Will, Kevin reminds me of when he does that. You remember the movie, Cattie Shack and the Goapers kind of dancing on the... OK. I think that's what that, right? It's all right. Yeah, we're going to come on the ball, right?

[00:01:13] It's more like, it's just gonna get that gun out that he had and start shooting. I don't know, that's... That's not how it's going. That's not how it's just playing. Just telling you, I'm just being honest with you. That's not how we want to start our day.

[00:01:26] We're kind and friendly. No guns, no shooting coasts. OK. Not what we want to do. All right. Hey, fellas, good to see you guys, man. Tom Burton, Will, Kevin Brown here to discuss the news this week and wholesale distribution. Will, how are you? So, an inch, son.

[00:01:45] I'm happy to be here. It's its chilly, it's cold, but hey, that's what we signed up for, 11 in the Midwest. Yeah. And there's nothing here that's going to kill me outside. Good. Are you from the Midwest originally? Yes. Gotcha. Very good. OK, cool.

[00:02:04] Well, so it's a little bit dirt spack right to see your dancing already. So, man, I didn't... I love that again. We need to be on TikTok because we want to fully boil down to.

[00:02:17] We need to be on TikTok because we need to be on TikTok because we need to be on TikTok. That's what this is going to become. The around the whole dance moves. Yeah? Yeah. You had dirt beverage in there? Yeah.

[00:02:28] OK, so, man, we're a way off track already. Right? This is funny. So I was messaging with dirt last night and dirt beverage was on with us last week.

[00:02:41] And just a phenomenal writer, speaker, and a supporter of independently owned and wholesale distribution in general, but distribution across the board. But we were messaging yesterday because we found we have a mutual friend.

[00:02:54] And I'm not going to say who that mutual friend is, but what I'm going to try and pull together is get dirt back on with this other gentleman use a global keynote speaker. And very well known which turned out to mutual friend of both of ours.

[00:03:07] And we're going to do a people episode hopefully April May. So that's a little cat out of the bag. Got a lot of work to do on that yet. But dirt's got a big event coming up that we're going to try and help him promote.

[00:03:18] But that's that will get working on that this morning. Will quit my friend introduce yourself to our audience a little bit about you a little bit about info and then we're going to dive into the news.

[00:03:29] Sure, thank the fans again for having me on one will quit on the distribution guy. If anybody else tries to say they're the distribution guy, they're wrong because I trademarked it. So I'm celebrating my third year with in for super excited about that.

[00:03:44] In for a global software development company and our really claim the fame is having industry specific ERP that allow our customers to get a faster time to value. And before joining in for I spent my career in the industry so I came from Granger.

[00:04:02] I spent some time running distribution centers for companies like Coca-Cola and that's the industrial supply, electric and before that I cut my teeth and supply to analogistics in the Marine Corps. So just a wee bit of experience in distribution. Oh, we bet. All right.

[00:04:21] So well, how long have you been the distribution guy? Like how long have you had that tagline? Officially it's about two years now. Okay. And it's, I believe in the life file that two years ago and it's still kind of crawling its way through the system.

[00:04:39] It's not quite yet. So I could go challenge. I could go throw it in. No, no, no, no, no, no. Very good. Why do you say what you are in fact the distribution guy words of wisdom about to flow freely as a comment.

[00:04:53] Big clap out from Susan Merlow as well. So that's obviously your well known and looking forward to having me. We've got sneak guests coming in later in the show today to do a little highlight with us on some cool stuff about M&A and in the,

[00:05:08] do the independently on distribution as well. So before we dive into the news, let's hit what we have to do a little bit of housekeeping every week. So my name again is Kevin Brown. I'm here with my lifelong friend and business partner Tom Burton.

[00:05:20] Tom and I are the co-founders of Leedsmark Technologies who graciously sponsors this event each week. And covers the cost of production and so forth. Leedsmark Technologies developed the channel cloud AI enabled CRM and customer intelligence platform.

[00:05:37] And what that does is it enables wholesale distributors and manufacturers both of modules for each one of them to accelerate growth. Bring time to value within their technology investments and highly understand their customer in ways that they haven't been able to before,

[00:05:53] which really drives growth within the organization. So we do that only for wholesale distribution and manufacturing. We don't work with companies outside of this arena, so very specific focused product. We get together every Friday morning here at 9 o'clock Pacific on YouTube live, Facebook live, and LinkedIn live.

[00:06:11] And we talk about a newsletter that we publish in that newsletter is called Around the Horn and wholesale distribution. If you don't get that newsletter and you would like to couple simple ways to simple ways to get it,

[00:06:22] you can send us an email at hello at leadsmarktech.com, and we'll get that right out to you just request the newsletter or we have a website for this podcast and live show. It's called Around the Horn pod.com.

[00:06:37] So www.around the horn pod.com and you can see listen to past episodes there and sign up for the newsletter.

[00:06:45] So we review this newsletter. So those of you who are listening later in the day on Apple podcast, Spotify podcast, whatever podcast format you might listen to once it's posted there. You won't be seeing the newsletter that the rest of us will know these handsome faces.

[00:07:01] If but you will be able to listen to all of the content as well. So think I got all of that. Let's dive in and start with some of the news, huh?

[00:07:12] So again, we're looking at this around the horn. Well, the around the horn and wholesale distribution newsletter.

[00:07:19] Got some of our articles posted up here now. The first one we'll talk about today is we've talked about this a little bit a few weeks ago, but this becoming much of a bigger issue about global trade rates related to the red sea attacks and the shortage of ability to get

[00:07:35] the benefits. Container ships through the Suez Canal so that article talks about 1.3% there's a global trade drop and 1.3% already with these now before I throw this out to you guys, I want to tie in on this for a second and put a little context to this right.

[00:07:53] The little additional research talked about roughly 12 to 15% of global trade by volume and about 30% of the world's shipping container traffic goes through the Suez Canal. 60 to 70% of trade between China and Europe translates the Suez Canal.

[00:08:13] And then obviously anything from the Middle East that's coming to Europe or North America is going through there as well. So they talk about 200,000 containers are going through their daily today.

[00:08:27] Typically it's a half a million so will you're logistics and distribution. I'm going to throw that you're some of your thoughts. It's some of your thoughts on this one first.

[00:08:36] I was going to add that statistic about the 12 to 15%. But yeah it's huge and it's continuing to escalate. So we're hearing more and more attacks and more and more responding attacks from the United States, Britain and our allies.

[00:08:58] And what's happening is companies are some of them are just saying all right we're not going to go so we're going to take the long route around the cable good hope to kind of head that off.

[00:09:11] That's you're adding 10 days to the 12 travel time. So if you're anticipating getting this freight in now you just have to add two weeks to the transit time.

[00:09:26] So now you have to order more you have to order more frequently they're using more energy it's increased costs and for the ones that are continuing to go through.

[00:09:35] Now they're having to add mitigation through a very good measures and kind of retrofitting some of the shipping containers with war wire or the big big water cannons snipers that sort of thing. Because this is just this seems to be going somewhere not well.

[00:09:57] Well, I have a question if I'm a ship or right if I'm somebody who is sending the freight.

[00:10:06] You I have you and I guess do I have when I you know decide who I'm going to ship with or work with and I decide that I don't want somebody who's going through the school as well.

[00:10:16] If I was ship, I don't want my stuff going through there as well.

[00:10:19] Is that happening as a world in your wherever or anything else the or the actual customers paying hey I don't want to ship company for rush to art taking one way or have a different route.

[00:10:33] I'm not sure but I imagine there are companies that are asking right and I imagine the more you ship the more influence you're going to have on the ship or itself. So I personally don't know.

[00:10:46] I don't know the answer to that as well but I'm fairly confident that as you're working with your own large organizations work with their own logistics and supply chain teams are making those decisions and working with their freight carriers. But at the same time.

[00:11:02] The smaller ones that are working through freight brokers and assistance and so forth or probably able to identify that.

[00:11:09] I think one of the challenges that really goes with this is that you know supposedly you know this the hovie groups and so forth that are apparently a ringing back are supposedly going after US US allies and or.

[00:11:23] Is rarely backed or own ships, but that's not what they're seeing what they're seeing is lots of others are getting hit through this so it's not just.

[00:11:32] Nobody's apparently safe through this whole piece but you know we always try and tie everything we talk about on the show here back to how that impacts also distribute right.

[00:11:43] So what we know from this is there's some statistics are second article that we have posted today related to this as well talks about air freight rates going up because of this because critical items people aren't going to be able with that extra 10 days and so they're looking to ship by a by air.

[00:12:00] But what's happening now is ocean freight rates, the article references have risen by as much as 10,000 dollars per 40 foot container. Now you know there's times where you can do $2,000 for a 40 foot container depending on where it's going to come from Asia here but.

[00:12:17] Big impact on cost big impact on times and then there's the whole factor that goes with us on his setting is. Fuel prices right so in this article talked about the shelter from the oil takers are temporarily being rerouted.

[00:12:34] Round the red sea and it's talked about a 10% or 5 to 10% pricing fact so. I don't know what it's like in Illinois but in Southern California we're just for the first time starting to see gas under five dollars a gallon. How long it's been left.

[00:12:55] Yeah we've seen around three dollars a gallon so they don't want to. A little taxid as much as as they do in California but it's still if you go to Wisconsin or Indiana it's still you probably 30 40 cents cheaper. Okay yeah interesting good.

[00:13:14] All right well let's get a jump ahead let's talk about this article about younger B to B fires and celebrating debates on you want to lead us off on that. Yeah you everybody hear me okay are.

[00:13:26] Okay yeah there's a little bit count and I think on you're in a fan I don't know what's what's going on there but should be gone now it is gone now boy that was a big change.

[00:13:36] I'm astounding like that when I see it right my home it's amazing how things work correctly. All this technology stuff. So yeah so this was another I think really good article in you know about the but I think there's two things in this article that really stood out.

[00:13:57] One is obviously more demand for self serve and not having to deal with sales people and the other is the fact that they were talking a lot about the fact that I believe now the majority of B to B decision makers are now millennials are younger.

[00:14:13] So that's old guys are no longer the majority of us of the decision makers that are better out there. I think that though you know and this is something that I did some research on when I first was researching my writing my book.

[00:14:29] The problem with with people doing everything self serve is they and it's very easy for people to get confused and not really get from here to there on what they're trying to accomplish and what they're trying to learn.

[00:14:41] So I think there's going to be you know we've talked a lot about this more and more of a.

[00:14:46] A need right people want to do things more self service but how do we how do we facilitate that self service process in a way that doesn't allow the buyer to get.

[00:14:57] And then we can ask down rabbit holes and different directions and and don't make any decision or don't make any purchases along the way which is a risk.

[00:15:06] When you're not being guided you know with the right sales person are having the right guide if you want to call that.

[00:15:12] And then the other thing we just talked a lot about is how do we make our sales people more valuable so that the buyers even if they're younger buyers are willing to have that interaction and want to have that interaction.

[00:15:24] You know there's a few a lot of different nuances that came out of that article will which you're take. Yeah, it's a lot to unpack and I can't say you know I don't know anybody that's in Gen Z that wants to use an AS 400 green screen.

[00:15:41] I like what you're. And yeah exactly so you want the the user experience to be to be friendly and I you know they just want to be able to do it right they don't want to talk to people.

[00:15:54] They don't want to order from sales because they just want to go on find what they need and go and that's why your your website has to be amazing so even if they're not going to be doing the ordering specifically from the website.

[00:16:10] It's got to have all that information you have to have the expertise around the data good picture 360 view pictures good reviews that way they can do their research and then take their antiquated system they have to use and make their ordering.

[00:16:27] Yeah, well it's interesting you know I think is we will talk in a few moments about some of the statistics from this article but you know I think what for me how this boils down is.

[00:16:40] People want to make decisions when they want to make decisions and and I think that the younger generation whichever.

[00:16:48] Gen we we add this into as we get younger and younger buyers and let's just say I think they that one of the stats they were talking to where people here born after 1981 or later you know they're saying that they now yeah that was what it was those born in 1981 or later now hold the keys to decision making for the majority of purchasers now.

[00:17:09] It's important you know we talk about and sometimes we get stuck here where we dive into an article and we start talking about all of our thoughts versus the article.

[00:17:17] This was a survey done by forced to research of 14,000 B to B buyers right so as we talk about these stats I think it's important that we always continue to reference that.

[00:17:30] For the research from where the articles from and so for the article that we're referencing today if you're listening and not with us live is from digital commerce 360.

[00:17:40] And so for me how I look at this if I were to try and boil some of this down is we have two factors that are happening in the workforce right and and I say we talked earlier today as it's a little digression here about our guest last week in hell.

[00:17:55] We have a lot of research and strategy group work coverage with the unleashed WD and Mike marks with any river consulting group and we what we caught my biggest takeaway from that amazing group we had last week is we don't talk enough on this podcast about people.

[00:18:14] And we have two factors in my mind that are hugely impacting manufacturing and wholesale distribution one is if you're distributor your end users be to be buyer is becoming younger and wants a different experience.

[00:18:27] Two is the people that you're going to be hiring to sell to that person are going to be younger and younger and younger and that impacts manufacturers the same way by.

[00:18:37] The buyers at the distributors that are working with manufacturers are becoming younger and I think well this is personal opinion to go with all these stats is that.

[00:18:47] It's less that the buyer only wants a and I think if you ask a little bit deeper question that it looks like they did here I think that the buyer is looking for.

[00:18:58] More flexibility than just an online experience and it's more about doing things when they want to. Of course, I have an appointment with Joe on Tuesdays at nine and he brings bagel for the shop right.

[00:19:14] I don't want to have to be ready to see Joe from XYZ Supply at 9 o'clock on Tuesday mornings. If I want to get Joe, I want to message Joe, I want to call Joe.

[00:19:25] I may need Joe to come in, but we'll decide when that is and I may want to do this purchase at 9 o'clock at night from an iPad from home while I have Netflix on. Right?

[00:19:36] I think what's big part of this is they're looking for the flexibility in winning how they do things because these are the same people that don't think about what they're having for dinner until they decide are they going out or is door dash coming to their house?

[00:19:49] Or I think there's three things. Right. They agree with you. I think they want it where they want it, right? The channel they want it, where I'm not may do, when they want it to your point.

[00:20:01] But I also think that the third variable is if they are going to interact with the sales or a person, they want value and high value from that interaction. So that's a hard order, right?

[00:20:15] When I want it where I want it in providing high value for the person attached, I wanted to hit on a couple of these comments that have come through. I think they're really good. Let me go back to your one bad made. I think this is true, right?

[00:20:30] Is the top of the final becomes automated, there's no training for new sellers. What we're going to have to do is we bring on new people, Kevin, to your point, is we're

[00:20:39] going to have to train them in a way to respect that buyer and know that they want that value. They want to have the channel options and they want to be able to put that and have the

[00:20:50] wind and the where and the when and then have the value at the same time. And also when it brand ends point here as well. The overall experience is still important. We'll change but buyers still want direction help support. They want flexibility, but they still want seller support.

[00:21:07] So I do and they want that with value. So I think it's all those things that we've talked about. You know, I think that's actually well said. I like that comment both on that from Bob and from Brandon as well.

[00:21:20] You know, and it's interesting Bob Britain here made another comedy said that the skill sets for sellers who are selling digitally or different than traditional face to face selling. That is something that we need to be thinking about right as as business owners and

[00:21:34] as leaders about how am I transferring that. I wanted my call it last week, I love that as belly to belly, right? You know, that's historically how we do things we put our boots on in the morning. We get in the truck.

[00:21:45] We go to jobs, I could job cider plant to plant or whatever it is. Well, now we need to have a hybrid selling method exactly like we have a hybrid buying system. Right.

[00:21:57] So if I can buy from a bot from by email on the website or I can call customer service or I can still see my rep, I have all of these methods are selling tactics need to go along with that as well. Right.

[00:22:12] Now, my prepared did I can am I comfortable enough right? And within with you know, our company leads more technology there. See our I'm in customer intelligence solution. We jumped in on one of the trainings that you and your team did yesterday with one

[00:22:26] of our newer customers and a couple of their guys over there for the training were in their vehicles driving to customers and listening. Right. And so that mindset for sellers is going to have to shift too, that I'm going to be prepared

[00:22:40] to meet my customer where they want to be. Yes, part of the beauty of the Army channel experience is being able to just like everybody says is by what you want, when you want from whatever device you want.

[00:22:54] And utilizing the technology, like I used Jack, GPT to put the article in there, so give me the I points and it's detailing some of those exact statistics that you're talking about where three quarters of everybody would prefer to buy from a website than from an actual

[00:23:11] sales rep. But in those 25% of times you want to be able to have that person, the sales rep that's got the knowledge and has got the acumen to help make that sale. Yep, I think that's great. You know, it hit some of these statistics right.

[00:23:28] They talked about live chat with a real person 45% people had interest in that call centers, 38, but 35% were still saying they always want to have access to that sales rep. And I think the reality is I think we've kind of nailed this on this particular article for

[00:23:44] the morning here is that you know, people want that flexibility and their buying solution with fine mahole sale distributor or a manufacturer my online presence, my online tools for communicating whether it's digital twins, AI bots, standard bots for now.

[00:24:03] I need to have lots of tools because I need to meet my customer where my customer wants to buy not how I want to sell. And I think if you keep your mindset in business today of how I want to do things, the

[00:24:15] world is going to move past you. Yeah, and add value right and provide a because sometimes the buyer doesn't even understand the assistance or the guidance that they really need. Right.

[00:24:28] So kind of you know, make sure that they make you make them aware of the value that you can provide so that they want to take advantage of that that's there anyway. Yep, very good. All right, let's jump to our next article today.

[00:24:41] Interesting article from CNBC about the number one challenge fortune 500 exec say they are facing with employees right now. Guys want to dive in on that? This was my favorite article. Was it okay? Yeah, I didn't really talk about AI at all. So, Tom, you're interested in AI?

[00:25:03] Well, yeah, last week, not this week. This week, I'm interested in in productivity. So the number one challenge that they're talking about here is, you know, they were saying, well, as it worked from home or whatever.

[00:25:15] And if you really look a couple layers and lower, they're saying that executives are very concerned about employee productivity in general. And we've Kevin, we and I've talked a lot about this.

[00:25:28] And I think this all goes back again to some of the stuff that we were talking about last week on the show with dirt is productivity is not an issue of whether you're necessarily you're working at home or you're in the office.

[00:25:42] I believe the productivity issue is the distraction that we get every day. And I'm going to date myself, but in my first 10 to 12 years of my career, right, before cell phones, if they call the office, I remember the rules were no personal calls. And that's an emergency. Right.

[00:25:59] And you went work. You didn't have emails in the effects of text messages and all of that. Now we're in a world of constant distraction, disruption and interruption and some people deal with it well and a lot of people don't.

[00:26:14] And the product, whether you're at home or in the office and the productivity suffers. Now I'm not naive to think that it's going to go back to the way that it was right in there.

[00:26:25] But I do think it's a real, real issue that in the same way that we need to do sales training. We've just talked about that and our people that way. We have to also train them on how they can be productive.

[00:26:37] Otherwise, we end up like all of us that are doing work 24 by seven because we're constantly behind the curve. Right. And I think that's the risk that's what's the trade-off has been. It's all this technology we've been distracted and now we end up working 24 by seven.

[00:26:55] We don't in the day at any certain point. So well, let me tie this in real quick because we kind of started talking about our thoughts. But this article is from CNBC, what they interviewed was 100 Fortune 500 and 100 Fortune 1000 CEOs about their biggest organizational challenges.

[00:27:15] And basically what they said in this ties into Tom Stots on this is only a third of the executives with an in-office mandate said they thought they're in-office policies of any impact on productivity. Instead, 76% of the Fortune 500 executive survey said they're worried about how their teams

[00:27:32] are working or more worried about how their teams are working than where they work. So and this article talked a lot and you know, will you work for a large company?

[00:27:44] In a moment maybe you can talk about kind of what happened as the pandemic hit with a large distributed team. But you know, this talks about there was soaring productivity in the first part of

[00:27:56] COVID. But then in the first half of 2022 statistics say the productivity plunged at the sharpest rate since 1947. Right? So now with these people are saying is I got to figure out how to

[00:28:08] get more out of my people and I have to provide that environment within the workplace. So I will want to kind of throw that over to you because you work for a big company, Tom and I work for a

[00:28:17] much smaller company. So at the start of the pandemic, the pandemic, I was still a great job and it was a 1.1 million square foot facility. Wow. And you know, it was a lot

[00:28:31] everything was question marks like we didn't have the benefit of knowing what we know now. So it was a scary time. It was a challenging time. It's like well we still have to get our orders out the door

[00:28:44] and that's not something we can do from home. Right? So you know with 700 plus people in that building, we had to say okay well we're going to designate different areas. So the receiving folks you're

[00:28:56] going to stay over here, you're going to have this color raised band, a breast band on, you're going to eat lunch in this area. We're going to try to keep people segregated, the shipping

[00:29:06] folks that are over here, inventory control folks. Obviously need to be everywhere but just try to keep your distance. And there was challenges like okay well how do I keep socially distance and

[00:29:17] do a team lift and an item that's 100 pounds? So those were challenges that we had to overcome. But I think they're in the early part, you know, there was I think there's several factors.

[00:29:32] So there's labor challenges and with more and more people required to work longer and longer hours, you'll see you're seeing that product. You're seeing some burnout. But as far as main the distractions part I think it goes back to presence, right? If I'm going to be present at

[00:29:54] work, I want to focus on a task, right? So if I'm going to say one of my tasks is to write a presentation to do some enablement, I want to focus on that not get it, not look at every email

[00:30:08] as it comes in one by one and try to answer those because the starting, the stopping the whole idea of multitasking is just not right. Like we can't do all three or four things at

[00:30:21] well at once and do them well and do them productive productively. So I can focus on one task complete it and then move on to the next thing. Very good. I like that. Well I wonder,

[00:30:35] I wonder the drop that you talked about in that article about from 2000, did you say it was 2020 and then yeah, the first part of 2022. Yeah, I thought it dropped. You've corrected and then to, right, you need 2022 down to 1947. I was relaxed last

[00:30:51] year in low-to-level productivity. So I'm wondering during lockdown, right, if we were a much more productive because everybody was home our kids were home we weren't running around we weren't doing

[00:31:01] a whole bunch of things and then lockdown ended. Life kind of came back we stayed the work from home, we stayed some of the other things and now we had more distractions right. I mean we were pretty

[00:31:13] you did everything else to do. Right. Well stay yeah. Right. I worked. Right. I just could like to work but we didn't have to you know take kids to school, run around, go do it. I mean

[00:31:22] we were very secluded in what we were doing and so therefore maybe that's where the productivity. I loved it. I went out. Yeah. I loved being locked down. I'm one of the few.

[00:31:33] No, I think that's good. You know and so the issue I think that we have here and again you could you know look at this as well these are big companies and so forth but again

[00:31:43] what we try and do here every week right in the purpose of our show is to bring these topics and bring them back around of what do they mean to wholesale distribution and manufacturing

[00:31:54] and it doesn't matter if you're the CEO of a fortune 100 company whether you're in touch with these things or not. If you're running that family owned or even pe owned distribution company right

[00:32:07] you can understand these factors and tie these into how am I understanding productivity in my business. One of the things that's not discussed in this article though but I think is paramount to this bigger

[00:32:19] discussion is lack of a better term virtual assistance right you know we have people I know that are on the show with us today of common if you have virtual assistance in other countries

[00:32:33] that are active in their business working on you know US hours and a critical parts of these companies and if you can nail the productivity part and it doesn't matter if you're an electrical

[00:32:46] distributor in the middle of the country or if you're a pipe valve and fitting company in Southern Florida right if you can nail having a culture of productivity in your organization you need that figured out

[00:32:57] you may have customer service executive assistance in other parts of the world because you have a culture built within your organization right that people want to flood to. I agree I think people do

[00:33:12] want to I think people do want to be productive right we don't want to leave at six o'clock or seven o'clock and feel like we didn't get anything done right so I do think that you know companies

[00:33:21] that can create a culture of productivity better um and there's you know even if we incorporate AI into that as we go forward will attract people right who want to be in a more productive

[00:33:33] culture yeah so I do it anyway it's definitely an issue um yeah well we tried continue to bring these things to the surface of things to be thinking about for you know that I'll use the word

[00:33:45] constituent so I guess and those are the same you know for our company with leeds more technologies and wheels company within foreign ERP we're talking to the same people every day and

[00:33:54] then bringing these things to the forefront or us bringing these things to the forefront for them is is why we're here every week so let's jump on to the next article because Tom you said your

[00:34:03] those favorite two letters what are they again something with an A a a a a i right yeah so this was really interesting right this is an article from AP news it talks about more CEO's fear fear

[00:34:15] their companies won't survive 10 years as AI and climate challenges grow right and the core of this article I think was much more tied to the AI function and the changing workplace in this

[00:34:30] setting that we better get our arms around this and understand how this is going to impact our business yeah I mean it's and here's what's interesting is that most don't really know why

[00:34:44] they have that fear right so it's not like I know that this is going to happen and I you know I'm gonna be there's a little bit of this mystery that and I think that's where the fear is coming from

[00:34:55] and um it was interesting I read this morning that there was a uh as you to me or one of these court places where you can go get courses or whatever they said that people are buying the AI course

[00:35:09] once every minute so there's more and more really need and demand right now for you talk about you know helping to guide is to what is AI what is it going to do positively we're gonna potentially

[00:35:26] negative or impact the business so I think a lot of the fear is from the unknown think about climate changes the same way yeah I mean there's a lot of a no in there so it's more of a fear of a

[00:35:36] the unknown I think than a fear of a specific item well you know they're they're looking at this and they comment in this article right this was 4700 CEOs and they they talk about meeting basically the quotes says uh their questioning whether their companies will survive the

[00:35:53] survive the coming decade without a major overall because of pressures from things like climate and technologies like artificial intelligence so right there's going to be a cost implications on going with with climate change and so forth but the big factors can they compete

[00:36:12] in a marketplace when they're not advancing technologies and the biggest takeaway from here is they're talking about overhauls of their organization now that's a big big deal when you're in a large

[00:36:24] organization but that can happen a lot quicker in a smaller and mid sized organization another one of this statistics here the 45% of the respondents for worried their business is wouldn't be viable without full reinvention right that's a big that's a big number it's funny weren't we talking

[00:36:47] about this just a couple days ago about you hear this word transformation a lot digital transformation and well Kevin and I were talking about and I'd love your take on this I believe that the digital transformation that we've been doing for the last 10 years with technology

[00:37:05] provided really incremental improvement to what we were already doing in our business but what's going to be happening now without overhaul you're just talking about is not only am I going to just

[00:37:17] be adding some technology to improve what I'm my processes or what I're doing the process is the technology and the people are all going to end up changing it's going to be a true transformation versus an incremental improvement or reinvention or reinvention yeah right maybe that's

[00:37:33] a great term to be looking at we've been looking at digital transformation for you know eight ten years of different things now we've got to reinvention potentially because it's not just

[00:37:44] which ERP system or which CRM do I have it's what is it doing to impact all facets of my business and even and again we see that as we talked about the words about CRM they tend to want to

[00:37:59] just try and automate what they've already been doing mm-hmm now what we've been trying to do is go no no let's take a step back and rethink where the puck is going not where the puck is right now

[00:38:10] and where you want to be in a year two years three years and let's make sure that the process is in the structure and the and how you're using the system aligns to that not just on what you're doing

[00:38:22] it's a hard thing right and that's what I mean about true reinvention or or true transformation will I use being that in your world yeah there's a lot to impact there so at first I would say

[00:38:34] is you know you want to see this these tools like artificial intelligence just like that it's a tool but it's it's something that I can use to help my business better I could help serve my

[00:38:45] customers better I can do things better it's no different than in the warehouse with a foreclift right it foreclift is a tool by which I can I can make things better I can I do things more efficiently

[00:38:57] but if I don't understand how to drive a foreclift and how to use the foreclift it's not much good to me right it doesn't make sense to take an ERP take it to the cloud and then do the exact same

[00:39:10] things that you've always been doing because I'll now you just have a hosted environment where now you don't have to upgrade all the time but you haven't made you haven't made strides to improve the processes now as terms of revamping or reengineering your whole business

[00:39:27] unless you're you're being left behind like if you're in the horse and buggy industry and and now uh for it has has made a car but yeah then you need to transform but if you're just if you're an HFAC provider you're providing electrical distribution or industrial supplies

[00:39:44] you don't need to transform your business because of artificial intelligence, machine learning and automation you need to upgrade your practices as your procedures to utilize those tools so that you can increase the efficiency of your employees without just going out there and saying

[00:40:00] work faster I think that's a good point I push on you a little bit with that I think there are people in that arena that can do exactly what you describe and I think there's other companies out there

[00:40:12] that that reinvention is probably going to be what they're going to need because they are I mean we were joking earlier today right about you know green screens on on big terminals and we see that sometimes or or very antiquated technology and some of these companies are

[00:40:30] going to need to figure out how to you know I mean it's not in common right that we still see you know I want to say inventory cards but you know something similar still in warehouse is here

[00:40:41] in there where yeah we have some automation but we have a cookboard you know hanging on the end of the palette rack too so there's gonna be a balancing act with this but that's I appreciate

[00:40:51] those those are good comments well and and it's so valuable when we have guests like you because you know with an organization that you work for in for with your broad scope globally

[00:41:01] with customers all over the world and one of the main I don't know the size but I'm going to suggest wholesale distribution of manufacturers probably a large vertical for in for your insights are extremely valuable. I want to hit Brandon's comment real quick Kevin before we

[00:41:17] move on because I think it ties together what we just talked about he says I believe we're invention is a good term too because it helps create the mindset that we have to think differently

[00:41:26] no matter what yeah I causes us to think differently so I do agree well you can't certainly have a one size fits all right every company is a different situation but I do think that at

[00:41:37] every company needs to take a different mindset to some of the technology and tools and things that are in the AI that's coming and how could that be used to maybe reinvent a little bit more

[00:41:49] than they really would normally do otherwise right and I'm due need to require but if you take that mindset it gives you the opportunity to at least make a valuation on what makes sense for

[00:41:58] your for your business on it. Good let's jump ahead guys we're going to have rinsured on time and we've got a lot to cover still so each week I'm going to kind of hit this plug and

[00:42:07] reminder in that if you're listening on the podcast that we do each should say that this live broadcast goes in our podcast format later in the day today if you're listening in on

[00:42:19] the podcast what we're looking at on our screens and reviewing is the around the horn and wholesale distribution newsletter that goes out every Friday morning, O-Dark 30 Pacific time to thousands of thousands of people and we recap the news of the world and North American particular and trying

[00:42:37] tie that together how that impacts manufacturing wholesale distribution. If you don't get that news letter please let us know you can reach us at hello at leadsmarttech.com and request the newsletter or just

[00:42:49] go to our website for the podcast which is www.aroundthehornpod.com and we will get that out to you so you're not seeing what the rest of the audience it's live and seeing if you want to catch this

[00:43:02] you can also go to any time you want to the lead smart technologies page on channel on YouTube, Facebook or LinkedIn and the live broadcasts are recorded there so next article we have a

[00:43:13] feature each week in the newsletter called Tech Talk we have just a couple of moments before we need to jump in because we're going to bring another guest in in a couple of minutes. A.I. chat bots

[00:43:22] for ERP assessing the benefits and the tools I am just going to go straight to will the distribution guy and ERP guy and I'll let you get started on this one at time and I'll chime in.

[00:43:33] Sure I think that goes back to the first couple of articles you were seeing is like well how can I get my questions answered without actually having to talk somebody how can I do something

[00:43:43] more efficiently? I know when these first things came out it was irritating. I just want to talk to a person but now that the technology's been out there for years I go okay 90% of my questions

[00:43:54] I can answer through a chat bot and the other 10% as long as I have a person I can talk to that's great. Yep what's interesting is I'm watching any tools are just going to make this

[00:44:05] better better and better and better. I don't want to talk to a bot that just takes me to an knowledge base and gives me seven articles to look at right because that's what we're seeing

[00:44:17] so often still today with within organizations is hey here's the answer it's probably in one of these and then it just has ready to push you out and says did you find your answers successfully

[00:44:28] of what you were looking for? No I didn't let me chat with a human who actually knows the information or a digital twin is what's really going to be wonderful right because I can have John or Judy

[00:44:41] who are my keen support people that would know the answer to everything that have a digital twin that can actually communicate to a certain level. So I'm looking forward to these these things

[00:44:52] advancing a lot before I throw this to you Tom though what I love probably most about this is you know there's customer facing things but a lot of what they reference in this article too

[00:45:04] about chat bots with the ERP is available for the employee that's using the system. That's what really gets neat intriguing for me is hey you know what it's great that we talk because we talk constantly about whether it's e-commerce or whatever it might be and the tools

[00:45:19] you have for your customer but what about what your people get in these tools to help them do their job better through a bot? Yeah and I'll just talk on this real quick because I know we got to move on

[00:45:31] is just think about what I call a conversational interface or a conversational experience. As an employee with an ERP or even traditionally with CRM or other applications it's very transactional

[00:45:44] you know you go in you enter your stuff in you maybe run a report you do some things like that but if I have the ability to have a conversation with my data right talk to my data that's the

[00:45:54] word that we use which I believe these chat bots and especially AI give you the opportunity whether an internal employee or an external customer to talk with the data and use that to then get relevant valuable information back versus those other chat bots back and you know that

[00:46:11] as you just pointed out that are all based around not all of this. Yeah and knowledge based I think so it's I you know I'm a big big big proponent that conversational and talking with

[00:46:23] data is the future whether it's a customer or an internal play and I think you know ERP is a great place for that to happen along with you know CRM another sort of data center application

[00:46:36] is a organization. Good. Well let's jump let's jump ahead that was a good article I appreciate wills feedback I'm going to pass right by our because I'm going to come back to each week we

[00:46:46] have a segment in the newsletter called industry scuddle but she typically tied to M&A or some other good announcements with that but we also have a section called in review and the in review

[00:46:56] section in the newsletter is where we might post another article about something that we talked about significantly in the past. We were talking earlier about the Suez Canal and that impact on global shipping we have an article we posted this week about California's long and battled

[00:47:09] ports are winning back some in-ports so Long Beach LA Harbor some good news in there and then we posted good read is what we call it each week it's just an interesting article and it's talking

[00:47:20] about AI at Davos and the Glitterotty they called it at Davos and all the discussions so if you're watching AI there's some highlights and some low lights coming out of the Davos economic forum

[00:47:31] and in Switzerland right now going on currently that that article is about so the important piece we want to talk about this week is the top warehouse trends of 2024 and this is an article that

[00:47:47] need to shhh. Tom how's you normally drive the show here? If I want to share wheels article this is Will's article I need to stop and reshare right? I believe that is well you don't need to stop

[00:48:00] and reshare but you need to share a different. Yep I will fix this here for us and um here we go. Will Quinn our guest today wrote this great article posted in industrial supply magazine the future of distribution 10 top trends and predictions for the next decade so will

[00:48:20] let's let you dive in and hit a few of the highlights for that if you wouldn't mind. Sure so it is we've been talking about efficiency there's just some there's a lot of exciting

[00:48:33] technologies that are coming out that are going to be helping to help distributors in the next 10 years and it's really time that they get you know everybody gets on board because the what we call industry 4.0 is really about artificial intelligence and machine learning and automation and robots

[00:48:53] and right around the corner is industry 5.0 and a lot of companies haven't even caught up to 4.0 so 5.0 is is is co-bots is are the the robots that are working with people to help make those jobs

[00:49:09] better like well let's type the the robot do the heavy lifting and I'm walking along with that robot so automation analytics data let's let's get there for let's go to the cloud first right

[00:49:22] get all the data from all of these disparate systems right every company has got a number of companies that they're using with the different softwares put all that data together so that I can we can use artificial tells us we can use machine learning to help automate processes

[00:49:41] put automation into your your distribution center so that you can go from industry 3.0 to industry 4.0 get that going and then move on to industry 5.0 before 6.0 gets here because technology is is accelerating the pace of it is accelerating right and and as soon as

[00:50:04] I was just watching you know 60 minutes piece on quantum computing that's just to take us even further much quicker and it's amazing what they're they're projecting they're going to be able to do with that

[00:50:18] that's great so let's hit these 10 real quick we won't that go in each one of them but and you know I wanted to mention this if you want to scroll down you can scroll down

[00:50:28] yeah I'm going to do that I'm just going to make the comment here real quick is in reference to will will as a prolific writer and a good writer so if you're not following will on LinkedIn

[00:50:38] and watching for his articles I would highly recommend that will twin the distribution guy so first one at hand here is automation revolutionized supply chain we talked about that advanced analytics and big data right Tom Utah constantly about that vast amounts of data that manufacturers and

[00:50:55] wholesale distribution have those are going to start driving decision making number 3 the last mile delivery revolution for sustainable and eco friendly practices 5 is the rise of direct to consumer

[00:51:09] D to C channels that's a whole episode show we could do in itself in that discussion six is block chain revolutionized traceability and transparency seven is hyper personalization and customer centric experiences earlier discussions that we've had today eight augmented reality another

[00:51:28] whole show we could probably do about a warehouse with augmented reality three phenomenal nine 3D printing enables distributed manufacturing and 10 collaboration and eco system integration man we should just do another show where we just talk about each one of these those are great

[00:51:46] yeah i know it you know one thing we've never we've we've stopped talking about since a i is the whole blockchain and web three aspect yeah i think that's an area that's kind

[00:51:57] of gotten swept under the rug a little bit technologically and there's an area that i think is going to have a much much bigger role so i'm glad you called that out call that out will no that that's

[00:52:08] good stuff the other thing that in fact we want to talk about the i would just highly recommend this article again it's an industrial supply magazine dot com is where you can simply find it

[00:52:19] the future of distribution top 10 trends and predictions for the next decade written by will Quinn but this last mile delivery revolution that's where we're starting to think about you know drones

[00:52:30] dropping stuff off on a job site right think about just a construction project and i hate the idea of drones flying all over the place dropping things off but um you know how many times you're on a

[00:52:42] job site where a skilled person has to just stop and go to the grain's location or the white cap or whatever it might be to pick up something that's a seven dollar part but the project

[00:52:53] stuff right where over lunchtime potential you can get a drone to drop something off so that last mile is cool so great article thank you will for writing that i love you how much you post

[00:53:04] and right good article so continue that if you would or just the weekend warrior do an a project yeah i mean times do i need to go back to home depot or or lows because oh i i forgot this

[00:53:18] right forgot that well if i can just i can just continue working and have a drone deliver it yeah why not yeah yeah exactly right exactly right exactly right with that i click the wrong button

[00:53:28] there time when you take us back to where we want to be yes okay so i will get this ready we are going to um jump back to see i want to share my screen but we'll say Kevin that that's very

[00:53:45] article you're referencing in this week is it is by my colleague Jerry these days about the warehouse and we're going to publish great read too yep exactly right good so we're back here two hour around the horn newsletter sharing and we're going to have us

[00:54:04] time will you bring Andy in with us we've got Andy Mitchell joining us from portland or you important to Andy yeah i'm in portland can you hear me fine we can we can hear you great thanks

[00:54:13] for being with us Andy tell i never get your title right would you tell me your title real quick i'm vice president of mal-resafedian supply and i'm based here in portland Oregon very good

[00:54:25] there's more words after your vice president title but but you you and uh are the right hand of uh of Tim why the the owner of mal-re and you guys are doing some great stuff out there we

[00:54:35] brought Andy in um and he's a regular listening in on our on our show each week and we appreciate the feedback and the comments that he makes uh as you can see on the screen right now and in our

[00:54:48] industry scuttled but section that we have each week we talk a little bit about m and a we've got an article here about border states and an acquisition in the electrical market large acquisition

[00:54:58] or an excuse me a large goal that a major roofing distributor has for e-commerce sales but Andy you guys just announced i think yesterday is when that went out and announcement of another acquisition and could you kind of share with us a little bit about the last

[00:55:14] i don't know what the right number is here and he's at the last five years or so mal-resafedian acquisition terror this acquisition is the 14th of dumb with Tim wall here in the last

[00:55:26] eight and a half years you know we're going the business from uh in the last eight and a half years from about 60 million and basically being the bay area in a Pacific Northwest to a

[00:55:35] last year a quarter of a billion dollars and a national distribution company as of today we've got about 600 employees and 40 locations but yeah we're real excited we just uh close to deal this past Monday on buying RMI Rocky Mountain industrial this was a family owned about 24 employee

[00:55:54] seven million dollars safety industrial distributor and Wyoming with locations in Casper, Cheyenne and Rock Springs you know Wyoming's an interesting market um i also expanded in November and to Colorado Springs and there's about the same amount of population and Colorado Springs

[00:56:11] as risen the entire state of Wyoming but it's also a more of an industrial state you know probably more of the um workers are working in oil and gas mining and you go into towns like Casper

[00:56:24] and you see their basically to supply towns there's supply and the oil and gas mining industry across the state of Wyoming and also North Dakota so yeah you know we had locations in Denver

[00:56:36] so we're sort of around that area and this really helps fill out our Rocky Mountain area and also gets us into some new markets traditionally we've sort of done a little bit and

[00:56:46] dabbled in the oil and gas and in the mining sectors and this now gets us in with key customers in that region. That's great to hear. So the big thing we were kind of wanted it to catch today

[00:56:58] as well any and you when I first met you and started calling on you when I was still on the the manufacturing side and called on you you guys were mostly kind of Pacific Northwest as you described

[00:57:11] earlier but now you have a national footprint pretty much right where how far east you go we have facilities in Florida and also in Boston. So and that was all came through acquisition right

[00:57:23] yes acquisition and we've done a couple of organics and phoenix and amorello. Very good so you know what I think would be valuable for our audience today is you know your maleries on and correct me

[00:57:35] if I don't state this perfectly but safety distribution and some industrial and then we see a lot of large industrial distributors also do a little bit of safety and you cross paths with quite

[00:57:47] a number of those companies who are even in some of the same associations and or buying groups that as your part of and both you and Tim are in different boards with affiliated distributors.

[00:57:59] You see this with some others and not just in your region but others and other parts of the country where there is a growth in acquisition by family owned and independently owned wholesale distributors

[00:58:13] kind of I don't want to just say gobbling up the little guys but doing strategic acquisitions partnerships and buying even distressed companies. Maybe talk a little bit about kind of that whole process not just malery but what do we see in across M&A in independently owned distribution

[00:58:30] which is very different than private equity firms buying up companies and or national like probably trade a national company's buying up companies here in there. Yeah I mean we could spend a whole session on this but I'll just try to cliff-noted a little bit the marketplace is getting

[00:58:45] very challenging for the smallest derivatives and there's a lot of family owned companies that have a passion towards worker safety and giving the best and supply chain to their customers. The challenging thing is is that many of the large manufacturers are rationalizing their distribution

[00:59:02] sending many of their customers to wholesale distribution which is a place for wholesale distribution but of course that gives you a few points off and in this industry which is a single digit margin profitability EBITDA industry three to five points could knock you in

[00:59:18] around your business out there. The air challenging thing is in the last three to five years the banking industry has become more challenging and so we continue to talk to our staff if you're

[00:59:29] bringing on a customer it's going to do $100,000 a month. Well I probably need to buy 45 days worth of inventory and then the customer is not going to pay me for 45 to 60 days and now all

[00:59:38] of a sudden how do you afford $100,000 for the cash flow and if your bank isn't working with you and you don't have the right size and also generate an profitability to make your banking

[00:59:48] partners happy you can't continue to grow. We continue to keep in touch with probably 40 different companies across the country and this phone was interesting one about two or three years ago we sat

[00:59:58] down with the family had a little visit and cast burns said hey what's going on told the mal-restory of we're the same as you are it's just we've gotten bigger and we can we can have all those

[01:00:09] attributes that compete with a wills former employer and so forth and so on yeah and you can say green literally came up four weeks ago on Wednesday and a variety of events have happened over the last

[01:00:22] two years that have put them in a situation that basically they need to sell or they needed to basically close down to business and this was a marginal business out there and so literally

[01:00:34] in a matter of four weeks we uh Tim and I thought there are two weeks ago did two days of due diligence I brought a team out there to do inventory and as of Monday this week they were on

[01:00:43] our computer system phone system emails and you know they're now we're having a 1.6 million dollar for them and to rate our part of 37 million dollars for the inventory and we're out there you know there's little transitional challenges that continue to work through but you know that team

[01:00:59] now has the strength and ability to go out there and service the customer is interestingly speaking to many of their customers last week in person I found that the customers loved RMI it's just RMI wasn't given them the supply chain that they needed and then speak to an

[01:01:16] earth customer they had most of the business they had the the mushroom brushes which I never knew what a mushroom brush was until last week but yeah we put them on our Milwaukee tool and I go

[01:01:26] well I don't see we had that Milwaukee business because RMI wasn't competitive and I said well we can talk to you about that yeah that's a still person excited next to us there's turned

[01:01:35] running going hey I haven't been competitive in the past so we love talking to these companies I had an hour when yesterday from Southern California call us we had a hour conversation with them

[01:01:46] they're in the same sort of situation so you know we're continuing to you know pick up opportunities and get these people that have a patch and for servicing customers for solving solutions for

[01:01:56] customers and then bring them part of a larger organization so they can go out and do what they really like to do and don't worry about the financing the employee issues they HR and all those

[01:02:06] other reasons out there that larger companies need to deal with any of this this model is happening across the board it does it's not just safety it's it does build supply it's gas and welding equipment it's construction equipment it's building materials it's across wholesale distribution

[01:02:24] correct yeah we're seeing it in all channels out there and you know we're as you mentioned we're part of affiliated distributors and you know we have a number of our members whether it's

[01:02:33] a Martin or you know devolves safety or blackhawk that are continuing to lead and you know we want to have the independence the smaller the business continues succeed but it is a challenging market

[01:02:46] place out there you know we have three or four offers right now out there we'll probably knock down two or three this year but you know what's happening in the marketplace post COVID a lot of these

[01:02:56] companies 2021 man I made a fortune so to hold on to hand sanitizer and then all of a sudden it woke up in 2022 I mean every one of these companies I mean I just inherited

[01:03:09] hundred thousand north worth of K. and 95s and 95s and Wyoming yeah these companies went deep in this stuff they can't sell it we'll cost of doing businesses got not higher and it's just a very

[01:03:21] challenging marketplace that they've woken up to and they want to continue to ensure continue out for your customers and for your associates that's great. Tom will any questions or thoughts about some of the endie comments? I have lots of questions and thoughts but I will save them

[01:03:37] for another time and you have to come join us because I have lots of questions that I would love to dig into on some of the stuff you've been saying. Good. Well we've had a year show in your format

[01:03:47] I mean it's really I think bringing the leaders in the industry together and helping us to think outside the box I think many of us are focused inside our business on a day to day type basis and it's

[01:03:56] nice to be able to break out and do something else so while we appreciate this opportunity to network and learn. Now there's ample opportunity for what companies like Andy is doing because if you

[01:04:07] look at just industrial supply it's extremely fragmented you may have Ranger and McMaster car and Grit and McM. They have a tiny percent of the overall business so there's lots of opportunities for companies like Andy to continue doing what they're doing and and hats off to these family

[01:04:25] owned businesses. The kind of businesses that dirt beverage highlights in his we supply America to or that really care about people. It's exactly right well good well that's kind of kind of

[01:04:34] wrapped things up for us today. Andy thanks for being with us we really appreciate when you being with us consistently don't go anywhere just hang on for a couple minutes will thank you so much

[01:04:43] for being with us we always appreciate one your feedback when you're with us can pop and comments in and our interaction that we have on LinkedIn and other formats but having you as a guest is great

[01:04:55] we appreciate that time anything to add to the in closing. No thanks for both of you. We're going to wish everybody thanks Kevin keep dancing doesn't matter what Tom says. Thanks buddy appreciate it

[01:05:07] no matter whether Tom wants to shoot me like I'm the mole on the go for on a caddy shack on just take the hose in the hole. That's all we got that's safe report. Everybody that was with

[01:05:17] us today that made comments that we're listening we had a large audience across LinkedIn YouTube live Facebook live and later today those that are listening from the podcast when it goes onto the format thank you for being with us we appreciate you every week if you have

[01:05:33] thoughts or ideas of what we could do better. Guess we could have topics we should cover please reach out and let us know find me Tom on LinkedIn find us directly through lead smart technologies

[01:05:46] but we thank you all for being with us we wish you a wonderful weekend be kind be safe and do good things thanks everyone