The Supply Chain Snags While AI Rolls Along

[00:00:00] Welcome to Around The Horn in Wholesale Distribution With Kevin Brown and Tom Burton. Sponsored each week by Lead Smart Technologies, Tom Kevin and their guests Review The News of the Week

[00:00:16] And dive deep into the topics impacting manufacturers, Wholesale Distribution, Independent Sales Agents, and the Global Wholesale Supply Chain. Whether it's M&A, Sass and Cloud Computing, B2BE Commerce or Supply Chain Issues,

[00:00:31] We peel back the onion with our guests into the topics that impact your business the most. How are you, my friend? Well, it's bright and sunny. There's no waterfalls that might wind up. So that's good sign. Oh wow. Well, for the moment anyway.

[00:00:47] Yeah, it's been raining a good chunk of the night here, but nothing crazy. You know, there's people other, probably people listening in that are just kind of giggling it as we talk about weather because it's.

[00:00:57] The world is ending because it's been raining for a day and a half and it's 53 degrees outside. So. Well, as disappointed. Oh, sorry, but yeah, I was I was playing with some tech technology there,

[00:01:12] and but don't worry, well, I will not let you down and coming. That's I think he just comes and then he takes off after you're done with the day.

[00:01:18] Is he good? You know, maybe maybe I need to start my own whole like little YouTube channel on chairjancing for. Yeah, there you go. Where to get going on TikTok. Perfect. All right. Well, we'll run that by the appropriate parties and see if that's a go or not.

[00:01:37] Yeah, we'll see what we get. All right. So welcome everybody. Good morning, Mr. Kennedy just join us and yep. Well, the large has a good comment sounds like California is the same weather as Minnesota.

[00:01:51] I would what I thought in Minnesota, Lars that there would have been white things falling from the sky, not rain drops, but you never know in Minnesota. I have a friend that just moved there from Arizona.

[00:02:01] And my experience with Minnesota weather is you don't like it wait 20 minutes. So that seems to be a change, but anyways, dive in this morning. I'm Kevin Brown here with my lifelong friend and co founder of Leedsmark Technologies Tom Burton. We get together every Friday morning.

[00:02:20] And we talk about what's going on in the world of manufacturing wholesale distribution. Mergers and acquisitions e-commerce. We even talk about artificial intelligence, occasionally.

[00:02:31] When we try and bring all of the news of the world, whether it's the economy or whatever might be going on in supply chain issues and so forth.

[00:02:38] It kind of boiled that down a little bit and pull that together in a way that's kind of digestible for the folks that we train serving manufacturing wholesale distribution.

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[00:03:48] A couple of final things in closing, Tom and I as I mentioned are the co-founders of leedsmark technologies, leedsmark is an AI enabled smart CRM and customer intelligence platform.

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[00:04:48] And quite a few people growing each week. In fact, we got a lot of newsletter signups last week. So it's great. So Tom, ready to dive in? Let's do it. Right. See, so we're talking a little bit about the economy as we get started today as well, huh?

[00:05:04] That's our normal normal starting point. It is. It's become a habit and I think it fits well with the new format of the newsletter as well.

[00:05:13] It does. It does now I do like a new format. I think it's much easier to go through. So once again, lots of different and conflicting information. Feeling I'm going to watch you machine. Yeah, it's like kind of like that. It's the confusion, the confusing economy.

[00:05:32] But yeah, so it says the US economy grew at a blistering 3.3% pace and Q4 while inflation pulled back. And on top of that, just this morning, we had the job report and job report was super strong.

[00:05:47] It wages are going up. But at the same time, it's saying that prices have dropped or a little bit anyway. Prices are leveling out. The inflation is leveling out. So I don't know what you're thought on this.

[00:06:01] Well, I just washing machine is the idea that just sticks in my mind. We've been talking about this for two years now. Kind of the ups and the downs and the qualities with us this morning that made a comment earlier.

[00:06:16] He was on with us a few months ago. And I'm trying to remember what he said. But we just, I think I've been this way all along.

[00:06:25] It's like wanting to keep the positive thoughts going on moving in the right direction. We're going to come out of this great. You know, we're still I think going back and forth now with this.

[00:06:37] You know, I don't think I've seen anybody in quite some time that things we're going to have a recession of any type and so forth. But the soft landing is a soft landing or is it doesn't even, isn't even a landing because it's not needed.

[00:06:51] You're seeing some great news here, but then a little conflicting things. You know, earlier in the week we had the Fed back out with, you know, kind of almost hitting the pause button on lowering rates and then you had mentioned this morning when we were talking that

[00:07:05] We've got the 10 year note is what how many bases points was that up? 14 or something this morning.

[00:07:13] Yeah, we just got all these different things kind of happening and then you look at the stock market. You know had an off day, but we're still at record highs and he was yesterday was a little bit of an off day.

[00:07:24] And then this morning, you know, meta which is one of his magnificent seven they described them as now in Wall Street, you know, highest training value ever well, you know, well over $400 a share.

[00:07:38] It's just there's still some of this, I don't know what you call it other than, you know, up and down a little bit of turmoil. Yeah, and I'm looking at, I'm not, I won't say I'm changing my tune, but I'm definitely looking at this a little bit differently.

[00:07:53] I would I'm seeing a curve. This is being recorded just so you know, I know. I know. I change my mind all the time. Is, is, what I see happening if you just kind of look back over the last few months or leave in the last year.

[00:08:09] I think that what we're learning is we can survive and grow without the free money, right? We had free money for whatever it was 10 years, 12 years, whatever it was. And we all got used to it and you saw some bubbles obviously created in 2021 right from from free money.

[00:08:27] But what's happened is, is it looks like despite the fact that we don't have free money in fact money is relatively expensive. There's a lot of it out there. There's a lot of it out there and we're still cranking away from a GDP and growth perspective.

[00:08:42] I think a lot of that is related to efficiencies. I think we're going to get more efficient as we move ahead. Yeah, I do, I do have still large concerns about the debt situation and the consumer debt.

[00:08:56] Not the venture owned debt or you know that the United States debt but the consumer debt. That's a little bit of it. It's a little bit of it. Yeah, I work with the whole show and itself.

[00:09:06] But for, I do, it looks like clearly that the economy is moving on its own despite the high cost of capital. And we'll just have to see if there's any other sort of things along the way.

[00:09:20] Yeah, and I, you know, a couple of things I just want to hit on real quick is in both Bob and Brandon brought up a couple of points. Like there's a lot of conflicting news and sometimes you don't hear the whole story like, you know, Brandon says,

[00:09:32] Meta had a $16 billion loss on Metaverse. They were all excited because they had a billion dollars or revenue. Merceded realize that they spent whatever it was 16 billion or whatever to get that billion.

[00:09:45] So there's a lot of, you know, stories behind the stories but overall it does appear that we're able to grow despite not having free money. Yeah, well I think Tom, you know, I haven't said this in I think a few months now in our discussions but.

[00:10:00] I might take personal takeaway on all of this right is that we're seeing when you look at Wall Street and you see large corporations and so forth.

[00:10:13] And I'd suggest we are maybe need to take a look at the metrics that we use or that are used in economics.

[00:10:23] To really evaluate where we're at because what I think we're looking at is, and again personal opinion we've got an episode hopefully coming up in Q 2 with a good friend of mine, Sean Dover Vacu's.

[00:10:38] And a con of PhD in economics Wall Street Journal best seller multiple times and he's going to be joining us on a show coming up and.

[00:10:46] And I wish he was with us today to ask this but my view is I question whether we're using the right metrics in this day and age.

[00:10:56] Based upon the technology that's involved with automated trading and all of the other things that are going on in the world because clearly right Wall Street could care less in theory right.

[00:11:08] Broad scope of all of these factors because it's just charging ahead now we see some dips and some ups and downs here and there right within Wall Street, but they're baking in what they think the feds going to do and other factors are going to be.

[00:11:22] Earlier on so I just question whether we are looking at the right stuff and we talked about this a few times and I won't harp on this but you know is below 3% of a good number of inflation is it 2% still is what is it.

[00:11:35] But we can see this to me it just feels like this pressure from all of these different factors and we look regularly I'm sorry to rant here, but we look regularly at the PMI and you know the purchasing managers index and you know mid states can some manufacturing consumption.

[00:11:51] Dad and we look at all these different probably have like 6 or 7 different factors that we've looked at over the last.

[00:11:57] to 18 months here on the show and for me everything feels like there's something pent up and waiting to push in Wall Street saying forget it we're plow in ahead and there's all these other things that are ready for positive things. I don't know. Just one guys take.

[00:12:17] Okay okay well we'll see through what I said I want to add if you want to. No I don't look and I think Bob made a good comment here right I like what he says he says we need to trust our gut feelings.

[00:12:32] Sometimes it's more reliable than what we're reading I tend to agree is I don't try to get caught up in a lot of statistics and numbers you just have to look a lot.

[00:12:42] Maybe you have to observe and look a lot more than just listen because if you listen you end up with a lot of conflicting data.

[00:12:50] And you know I think that's why I've been concerned about the consumer debt there is if you just observe there is a lot of consumer debt right and.

[00:12:59] There's a lot of other things that are going on that necessarily aren't talked about so anyway I know we need to move on let's move on before before we go right you and we you brought this up earlier and there's another.

[00:13:12] I guess we both enjoyed called the all in podcast and you know those guys spend a lot of time right all in podcasts.

[00:13:21] Kind of funny there the four technology executives and they talk about the economy and health and business and little politics and so forth but you know they're ranting constantly about the unsustainability of the countries debt so.

[00:13:39] You know that's even a bigger factor that we've never really even talked about here but we can't even sustain pain making the debt payments when interest rates are higher right.

[00:13:47] So that's a big challenge as well I just feel like there's some demand and I don't even say demand there's an enthusiasm that's there because we're seeing on the consumer side you started the discussion right talking about people are spending and buying and doing things.

[00:14:02] Maybe I just all throw this out there one final time before we move on I just wonder for using the right statistics to measure all these things still.

[00:14:09] No, I don't think so I don't think this I don't think this statistics tell much of a story at all because they're siloed and you know so again you have to look.

[00:14:18] Kind of holistically and you have to look at things from yourself and not rely on any one or two two things under there so yep all right to it's time on that.

[00:14:28] The Forbes magazine most survey companies are vulnerable to other supply chain crisis so we made the adjustment to our newsletter if you get that you'll see that we haven't economy and supply chain section and we're still in that section today.

[00:14:41] I thought this was pretty interesting you know we've talked about the Panama Canal number of times last year.

[00:14:49] The amount of ships waiting to get through there and then we've been talking about often on about the Suez Canal but this article talks and it and to me one of the biggest takeaways of this is fragility is the word that they use of the world supply chain.

[00:15:03] They talk about escalating tensions in the Red Sea huge shipping companies that are bypassing the Suez Canal which are increasing rates increasing delivery times all the fuel that comes out of there we talked about a couple of weeks ago.

[00:15:18] There's some of the major shipping lines, mayors and hapugloid they're not even completely avoiding those roots as well so we put that together right with the pressure of a broadening.

[00:15:33] Political conflicts in that region as well and the risks that come with that you look at the fact that the Suez or the Panama Canal is now substantially lower than the last results that they put out there.

[00:15:49] It's that lake gatoon I think it's referred to at is six feet below where it was a year ago which means there's less water which means there's less room which means ships wait longer some ships can't even get through and then this article talks about China and the Ukraine threats and the caution that we need to have if we're dealing with the global supply chain.

[00:16:12] Yeah, so I think fragility is the right word seems like you read this as like supply chain has become a bit of a Russian rollet exercise never going exactly what's going to happen.

[00:16:25] And you know it's hard to say right how do you actually mitigate against all that risk and fragility maybe its diversity probably more than anything on on all of that but and I don't see the fragility necessarily changing anytime really soon.

[00:16:41] Yeah, and it could could get worse in some cases so to me the only real answer right as you have to have contingency and. And diversity on stuff if you're otherwise you are really kind of playing Russian rollet with your with your supply chain.

[00:16:57] Well this uses the article again this is you know if you're listening in on the podcast we're reviewing the around the horn and wholesale distribution newsletter we do every Friday here this article again is from Forbes magazine and it talked about.

[00:17:12] The survey that they did it was 10,000 businesses the survey was conducted by done in Bradstreet. They said only one in three surveyed firms are considering diversifying their supply change to multiple sources and multiple regions as a top priority.

[00:17:27] And for is considering improving supplier communication and consolidation is the key priority to ensure seamless supplies point being is. If you're not working closely right now in our audience that we promote our our podcasts and our show here too is manufacturers and wholesale distributors right.

[00:17:48] Both of them critically relying on supply chains right distributors whether they're having direct relationships things being shipped from our.

[00:17:57] Sure or worrying about it being cautious about the supply chain of the manufacturers that are key suppliers if I'm a distributor and I sell building materials or hvacker electrical or whatever it might be.

[00:18:11] This article is suggesting that the things that are going on and again it talks a more that we didn't even reference here about the fragility and the challenges going on in the Ukraine and.

[00:18:21] I think that's the thing that is being the largest raw material supplier for chips and hardware hubs and all different types of stuff they're changing trade policies and certainly we're going to talk in a moment about you know their manufacturing contraction and China if you're a distributor and you're not communicating.

[00:18:39] And I think that's a great idea of what you're doing with your key suppliers on what's going on with their supply chain the article and I think the ticket says two words that are takeaways from me from this article that I thought it was a great article was fragility and blinders and it makes the quoted says.

[00:18:58] Corporate leaders who delay it ensuring that they can get the materials and supplies their organizations need when there is a disruption to supply chains can be putting their companies at risk and denying that they will ever face such a risk.

[00:19:09] And it's going to be the equivalence of wearing blinders, which is never a good luck for business executives love that. Never a good luck to have the blinders on so you know dive deep if you're not doing so already so good stuff.

[00:19:24] All right what's next manufacturing distribution segment of the newsletter. AP article China manufacturing contracts for fourth straight month in January. It's going on there. Well it says that you know that of course manufacturing has been dropping in China since really since COVID since we had all delays there.

[00:19:47] Not surprising right I think the the guess the China manufacturing party really took a big hit with that and all the companies of you have looked and obviously doing manufacturing in other places.

[00:19:59] And you also have you know again some of the same problems that we've just talked about so it's not China is a little bit of a got a little bit of a mess.

[00:20:09] I mean if you look at their economy was really based around all of this and then obviously you got hit and it's not going to and I don't see it recovering anytime soon.

[00:20:17] Yep yep no you're right and I mean this goes Bob made a comment there earlier and about complicated supply chains add more points of failure and you know this just kind of ties in there was you know.

[00:20:29] A couple of things out of this article and we don't have to spend a large part of our morning on this but you know if the article quoted as global demand for manufacture goods has suffered.

[00:20:40] As central banks around the world of raised interest rates okay right we know that we have decades high rates of inflation globally.

[00:20:47] And it says the price pressures have eased in recent months but demand has yet to rebound to pre-pandemic levels now it may be some markets it could be surpassed.

[00:20:57] But you know as a whole but here's one of the big takeaways that is article for me right and and I'm sure we've got people that are less well almost I'm sure I'm extremely confident we've got a lot of people on here there's smarter than I am related to supply chain issues but.

[00:21:12] You know as you look at this we've got a lot of discussion about on showing and reshoring but. Many of the people that are working on that there are year or two out on those things right you can't just say we're going to on shore.

[00:21:24] You know manufacturing of x, y and z and have that plant ready and people hired and whatever else needs to go with that in place.

[00:21:32] But there has been a move for a lot of things when you think about a lot of things that are latex related and cut and so operations and so forth have been moving to Southeast Asia as we talk about.

[00:21:45] Lousen Vietnam and Thailand and so forth and some of those surrounding companies countries but this article made a really interesting point that I hadn't been thinking about that only makes great sense right and it's just another data point to be considering right is that.

[00:22:01] Those price pressures and that are going on in there these have ramifications across that entire region because so much of what's being manufactured or assembled.

[00:22:12] I might have moved out of China but what percentage of those raw materials are being manufactured in China that are being used in your final good so you might have a manufacturer if you're a.

[00:22:23] A distributor that's distributing something is making something saying hey you know we moved this portion to.

[00:22:30] You know Vietnam is an example but yet what percentage of what is going into that finished good that's getting shipped to you to sell to the end user is coming out of China still so anyways we could probably spend all day talking about supply chain but that to me is.

[00:22:45] I guess I guess would be the take away from the articles today about supply chain issues right yet.

[00:22:52] Political instability and multiple major regions of the world we've got economic factors going on here and in Asia as well and we've got to pay attention to these things maybe closer than ever. Yep absolutely.

[00:23:10] All right on to e-commerce and marketing segment of the morning huh yeah now we're getting into the fun stuff. I think the other stuff is pretty important though Tom.

[00:23:21] I didn't say it was it wasn't as fun wasn't as fun okay right I got you so this first one we can we can go through quickly the investor money for be to be marketplace slows in 2023.

[00:23:35] In addition to less venture capital being infused in the B2B marketplaces the number of deals reach to five year low totally just 23 for 2023 a 40% dip from the previous year.

[00:23:48] My my take on this and just looking at the data there is that marketplaces are just satirate there's satirated right how many marketplaces can you really have right and I think there was obviously a lot of like everything else maybe a bubble if you want to call that in the whole.

[00:24:03] I think it's a good place investment thing you'll probably see some consolidation if not already and that's even discussed in here too yeah but it's just been it's been saturated.

[00:24:17] So like it's like anything else it probably just got a little bit ahead of its keys on on just the whole growth of the marketplace area.

[00:24:26] So this article is from digital three digital commerce 360 which we get a lot of content from them regularly and it talked about this huge dip 40% dip in B2B marketplace investments.

[00:24:40] I thought it was kind of interesting this is from the aplico research that they published recently and they published this every year. But they used in that article they had an example though and I think to your point about you talked about saturated.

[00:24:55] The vast majority of marketplaces that are out there when you pull Amazon in a couple of other large ones away right the vast majority of them that are be to be driven are.

[00:25:07] Even if you're strong and a vertical they're still less known and less used and I think that's what some of the challenges is we've not got enough people going to the marketplaces to sustain all the marketplaces that have been developed.

[00:25:22] And my takeaway on that is tied to this aplico study did and they referenced a company called Acculings which had been number two on there list of B2B mark a place is it started out as a provider of SaaS based business management app for roofing contractors.

[00:25:40] Well, that's where they started and then they moved to a B2B marketplace after they built a dominant market position and they did all of that. What was interesting though is that was kind of a win because somebody took.

[00:25:53] They started off as a SaaS software for the end user and then they took that and went back to distribution of manufacturing turned into a good marketplace.

[00:26:01] But then they talked about another company or was this indigo ag which I've never heard of that presume it's an agricultural marketplace they did a big pivot in 2023.

[00:26:15] They'd burn through all their investment money and needed to go back to the capital funds for capital markets for more funding and did you catch what happened. No, 94% discount compared to their prior three and a half billion dollar valuation. Okay.

[00:26:32] That's the game right got the hype got the big dollars behind him and my assumption is I don't know this and I'm just going to reference I won't say it's this indigo ag.

[00:26:42] But in general what could be what could have happened in a lot of these instances and it's to your point earlier right about you know an abundance of mark a place has been built and I'm my belief is that not enough people are coming to them yet is that they built it and they didn't come.

[00:26:57] Right, so the old adage didn't work in this setting but I mean talk about a haircut. That's what you call it down that's what you call it down around. I'm exactly right.

[00:27:09] I'm surprised they were even able to get capital that's that's an off a cliff down round right I mean down rounds are you know 30 40% and stuff like that isn't uncommon to hear but 94%.

[00:27:22] So anyway stuff to keep our eye on you know mark a place is are going to grow. You know our regular guest Brian Beck that's an expert on mark a place is from in Syria.

[00:27:32] Great guy to be following on LinkedIn and seeing some of his content I'd love his take on this but didn't get the dollars flowing it last year will have to see what this year looks like let's keep an eye on that as we go through the year.

[00:27:45] All right now I know you like the next one article so seven ways marketers should be using generative AI now good article from Forbes. Why don't you get it started on that.

[00:27:56] Yeah so there we don't need to go through all seven but there were seven sort of strategies or use cases that they talk about. Here about how marketing can use generative AI.

[00:28:07] You know you're not a couple of more pretty obviously you would think of regenerating content or writing blog post or you know that kind of stuff.

[00:28:15] I thought though and the one of them that really jumped out and I think is really something that's currently being underused with the AI capabilities right now as they said use it for brainstorming and forming ideas.

[00:28:29] Yeah and going back and forth on ideas and you know we've done that a few times just for our own marketing and for our own effort.

[00:28:37] Yeah and it's quite remarkable how just by going back and forth a little bit it can open up the creativity and give you some thoughts and ideas that you wouldn't normally have on your own.

[00:28:49] And I don't see that a lot currently with you know people that I see anyway using AI and business they're using it more to generate content versus using it as a tool to help them.

[00:29:00] Again brainstorm great strategy, look at strategic options all of that so I thought that was an interesting use case that they did spotlight in here that's not you know typically adopted.

[00:29:11] Well and it's interesting and this is a very broad discussion but I actually posted something myself on LinkedIn the other day about this. I've been watching this movement of you know I've been very active on LinkedIn like daily activities for 1314 years.

[00:29:31] I've been a member since 2006 I think it was 2007 remember been subscribed whatever we call it but user.

[00:29:40] But I'm watching this abundant flow from people that historically haven't posted a lot that is this really structured content with and they put a couple of little emojis into and there's nothing wrong with that.

[00:29:53] But I think what we're seeing here and I'm I'm appreciate this article because you know talks about the first of the seven items they discussed was writing marketing content.

[00:30:03] But I think what's happening is unless you've spent some time to learn about prompts and how to discuss things or how to get the AI tool to use your brand voice and so forth.

[00:30:14] What we've seen or seen a lot of as people going to chat GPT or barter whatever tool they use and saying write me an article about these five points right I could go in and say write me an article about the seven points about AI and marketing about writing marketing context coming up with fresh ideas creating beautiful.

[00:30:32] I think that's a great idea of creating beautiful images generating video analyzing sentiment creating multiple versions of ads for different audiences analyzing. I think that's a great idea of what's happening with an article but does it if I take in the time to help it understand me.

[00:30:49] Have I taken a time to help it understand my company and my brand. I didn't exercise to build and you should be talking about this because you're the expert on these things but I did a rudimentary.

[00:31:01] Although you did give me a small pat on the back I made a small GPT by spending about an hour probably an hour and a half of talking to.

[00:31:11] Chat GPT about leads more technologies and I just wanted to get a feel for what would come out of that.

[00:31:18] So I asked it I said ask me 20 or more questions to help you understand the brand the company and our marketing needs and it was a lot of work.

[00:31:31] I was able to put that into a document and make a GPT now from those answers and now we can do marketing content against that.

[00:31:38] So I guess my thought on this and you're like I said you're more in tune with this is the technical guy in the group here but. People need to be thinking about deeper rather than just asking. Chat GPT or barter or whatever tool a question.

[00:31:54] The we've talked about this forever but one of the biggest things that we're seeing more and more emphasis on this year for companies is using their own data right in their own training a model or using a model that's based around their data and around their company.

[00:32:12] And so I think that's interesting about that and some that I've been working on with some different companies is a lot of us don't know what our companies really do. It's like we don't know ourselves that well. Yeah, and so you start to learn.

[00:32:26] We can't tell our own story. We can't tell. We can't articulate clearly our ideal customer profile. We can articulate our market. We can articulate our offerings. We can articulate our competition. I mean it's amazing actually.

[00:32:41] We kind of maybe know that it's there but we can articulate it and so therefore it becomes difficult to train the model if you will around the business. Although the model might train you.

[00:32:52] But if you can if you can use it to help you then get to those answers. Right and go through there, then you now have a foundation to then go back and then infuse it in there.

[00:33:05] So you have to you have to take the journey along the way. And it's it's quite remarkable I think that a byproduct of this whole AI thing is whether it's yourself personally or your business or whatever.

[00:33:21] I think I'll just say businesses are going to get to know themselves a lot better than they ever had before. We're going to talk about some HR and people issues here in a minute.

[00:33:32] I mean think about how many people and especially in large companies really understand the business. They don't and a lot of they understand their job possibly but they don't understand the business. So typically they understand the job of how they did it at the last company.

[00:33:47] Yeah or the based on their experience right so anyway it's. Very I thought some really good points in there and how to use the the the generative AI not just a generate content.

[00:34:00] But to actually start figuring out how you create better content and more relevant content that's based on your business and and your your knowledge right it doesn't even have to be business a good beer own personal knowledge. So Tom before we jump ahead Susan Kammerlo commented here.

[00:34:16] Only one of those seven prompts make sense to use in her opinion so Susan what which one is it. Susan works with wholesale distributors on marketing and messaging and social media.

[00:34:26] So tell us what it is Susan if you're still listening love to hear that I really appreciate there was a couple of things right I'm not overwhelmed right now with making images and things like that but.

[00:34:38] For me it's a great tool because I once I take set the time aside and get in a groove I enjoy writing. It's hard for me to get things started so when I can throw some ideas out and get some some further ideas to work from.

[00:34:56] So you know generating or coming up with fresh ideas brainstorming on that. Susan needs me to tell her the seven again writing marketing copy coming up with fresh ideas creating beautiful images generating video analyzing sentiment.

[00:35:12] Creatable version of ads for different audiences and faster and easier and cheaper is one of the those are the seven so. I think there's a great tool that can come along with we start building up.

[00:35:28] The not sure what that's the one okay I'm not sure which of the seven but for me the analyzing sentiment helping generate ideas right and then doing multiple messages to different audiences. I think those are great tools and that becomes that multiple versions of ads and content for.

[00:35:49] The audiences is just fantastic got you Susan yeah she agrees with me about helping helping prompt ideas and maybe bring in some other facts and so good stuff. All right let's move ahead all right.

[00:36:04] Cyber security we're in our tech cyber and a i section right then we just talk about AI. Yeah but that was in marketing time.

[00:36:15] We're going to talk about AI again when we get to the HR and people section that's true okay so this is but we're focusing here more. Yeah it's okay so we're going to focus here on some cybersecurity stuff and.

[00:36:29] And some other related related AI issues this kind of start with this first one Schneider electric confirms data access and ransomware attack. I guess not a surprise other than maybe the fact that they. Confirm that it actually got done.

[00:36:45] Looks like they hit a lot of different things you know impacted some of their major brands and so forth. Again nothing I guess revolutionary based on some of the stuff we've talked about before but more of the same sort of I guess risk related to the cyber attack.

[00:37:01] But hit last year successfully on a broader base by a different group using different tools. Hit again now on the Schneider electric is probably the biggest name and electrical products and components globally and they have a whole different division that there's sustainability business which is.

[00:37:20] A big chunk of that is consulting related front of mine's wife works for that ceiling got racing buddy of mine's wife works for that division and that's what got hit that sustainability consulting group they work with. Schools and big business but.

[00:37:35] The issue right now is that they're having to go talk to as and these are the only ones that mentioned was. Major brands including.

[00:37:43] Hilton hotels PepsiCo and Walmart they have to go back and they're talking about that their infrastructure has been compromised through this this particular group is called cactus who are taking responsibility for it and you know what's my struggle.

[00:37:58] This is a struggle just frustration is like with these groups out there that are popping up and they're popping up daily almost right is. They're almost like that you know the what did they call it the.

[00:38:13] The body bombs or the vest bombers or whatever that you would see you know in the past and other parts of the world that you know would would go into a.

[00:38:23] In a organization and you know one of their people became a martyr because they blew up a cafe somewhere and then this group comes and takes credit for it and it just to me it's just horrendous to.

[00:38:36] To think about you know we've got these sub groups popping up going after smaller businesses and that's one of the things we've talked about before right is the idea that. You've got these larger successful groups the previous one I think they talked about was.

[00:38:51] Can't remember the name of the other group that had hit them previously but. It was. They're bold going after these big companies, but my concern about it is just like you see in capitalism anywhere else is.

[00:39:07] You know you get somebody working in the large company that's ice I can go do this to or I can go do a better and now we get these smaller organizations that are going after smaller businesses so important stuff right now.

[00:39:20] Yeah, no that you mentioned blinders before this is not an area to have blinders on. And it only it only bothers you are actually when it happens. Yeah, when it happens it's not a not a good scene.

[00:39:35] Yes, so they talk about you know they're using the same tools and protocols I think they call them like TTPs that are they mentioned like standard ransomware playbook. Well known methods and so forth.

[00:39:50] So kind of a big deal and most of these I think it reference were coming in through VPN gateways and we've saw some information last week or the week before about email attacks and so forth.

[00:40:00] So something we need to be thinking about within our organizations and it doesn't matter you know whether you're 50 billion dollar a year you know two location building material distributor or your half a billion dollar manufacturer or multi billion dollar manufacturer distributor.

[00:40:17] The threat is there and it's there for all of us. All right, what's next is we are still in our tech cyber in AI section. The FTC here we go. What do you think? Oh boy.

[00:40:35] Yeah, so this the Sardicle this from Tech Target FTC launches inquiry into gender to the AI partnerships.

[00:40:42] Same sort of drill is before right is are we are big companies by partnering with small companies is that you know distorting the quote is is a starting innovation and undermining fair competition.

[00:40:59] You know I think that partnerships right now are actually imperative is and especially with larger companies maybe working with smaller companies that can afford to invest in the way that the larger companies can and And AI world right now.

[00:41:15] I think unfortunately this is another probably a political move or you know we've seen this before on some of the.

[00:41:23] Yeah, we've got an FTC chair that's on F Graham is on another another power another power play move which I think is just absurd actually at this point and where we are.

[00:41:35] You know we're also we're also getting our sea legs right whether you're a big company or a small company on this and so I think working together and partnering and all of that.

[00:41:45] We can see how things then settle out and go forward but to try and throw sand in the gears right now just to me seems unnecessary. Well, I think that's saying in the gears is probably good right because some of this could.

[00:41:58] I don't think it's going to thwart the speed of things something these companies I don't want to say they don't care but this is an annoyance in this space right but what the point about this is and you were talking about.

[00:42:11] You know smaller companies getting a leg up by you know having investment or support from larger company so.

[00:42:18] So I'm about Google and Amazon that have a large partnership with anthropic and the more well known one that everybody sees out there and has been in the news so much is the Microsoft partnership slash you know massive investment.

[00:42:34] into open AI right in the chat GPT model and now that tool coming into a lot of Microsoft products but I just in my mind look.

[00:42:44] I don't think that we need to get rid of the FTC or the you know in that setting but some of this stuff is just such ridiculous political overreaching and this is a whole another topic but if you're if you have any interest in.

[00:42:57] the stuff and targeting and overreach you know go look at all of the take the limit this is crazy stuff if you go on to go look at this go do a little search online of all of the us.

[00:43:13] the us government that are having some type of accusation or investigations or actions against Elon Musk and his different companies. And the most of that and then realized he didn't even he did the White House hosted an electrical electric vehicle summit and didn't invite the founder of Tesla.

[00:43:40] So you look at the overreach on some of these things and if you look into the musk it's just astounding and I'm not a conspiracy theorist guy but if you if you look at all the agencies that are poking around at his different businesses at scary.

[00:43:54] But this is ridiculous right let's let capitalism do a capitalism does I you have a good idea you can either do one of two things or three things you can grow it organically.

[00:44:07] you can go get investors behind you to grow it on your own or you can work in partnerships and investors from partnerships and.

[00:44:17] And so we're going to have a look at the right way with it and this what we're seeing here are these growth opportunities for these organizations open AI had billions of dollars behind them already but now they're partnered with Microsoft which is just going to accelerate all of this right exponential.

[00:44:31] And it's hard for every you know you can't do everything yourself right whether you're providing a hardware or you're doing software or whatever.

[00:44:40] It's just look I get the point about you know creating sort of monopolistic situations and under mining fair competition I can understand conceptually that situation but we're so early in what we're trying to like I said we're all getting our sea legs in and trying to figure out where we fit and right and how we do it I know they're going to you know the position the.

[00:45:00] The the counter argument we will we don't get it now right it's going to get out of control and all that kind of stuff but I it all comes back to me is that.

[00:45:10] What what AI is today and how we use AI today and how it will be in six to 12 months is very different so we got a lot of these things play out.

[00:45:21] And I think again it's just showing relevance trying to be relevant and all of that but it's it's to me is a bit unfortunate. Got to make a name in case that an administration changes I think in this case right I mean I.

[00:45:35] I hate to throw rocks at somebody but this this particular FTC chair is I think over reaching quite a few things all right let's jump into our.

[00:45:47] Excuse me sales and M and A segment of our newsletter that's out each week January and M and A round up a strong start to 2024 this was a great article by our friend my cock it might be with us.

[00:45:59] I wish I had our guest list come at mics here in the next few weeks within the next month with us again he's been with us before this was from the recently acquired MDM publication that we quote regularly and now part of the National Association of wholesalers so it was interesting some data that came from that.

[00:46:17] Strong January came out of the M and A but 37 deals MDM covered. M and A deals involving distributors as well as manufacturers that's pect the majority of them 28 of the 37 were involving distributors.

[00:46:34] But that kind of pales and comparison to the 50 that were covered in January in 2023 so it's kind of interesting to watch what's going on with all this maybe ties back to some of the factors from our.

[00:46:46] Economic discussion that we started with today but people are buying and selling right there's money out there and PE there's money out there and large organizations for investment and acquisition.

[00:46:56] Yeah, it's interesting you know member Ian mentioned he and he'll are mentioned in our show a couple weeks back. 2023 M and A were you know was definitely down. So maybe there's some pent up demand maybe you know again I don't know what valuations are looking at.

[00:47:13] I know that we talked a bit about that before as evaluations a drop so ready to be valuations are getting more reasonable which has opened up the door for some of these M and A actions to take place.

[00:47:24] And I think it's interesting right if you look at the list again for those of you that are listening on the podcast that's recorded we're looking at a live on our live broadcast on LinkedIn live YouTube live in the Facebook live that we're.

[00:47:40] Looking at the news that are we published each week it's called around the horn and wholesale distribution of manufacturing if you'd like that you can reach out to us.

[00:47:48] at www.arroundthehornpod.com and we'll get that out to you but if you're reading this article the majority of the deals done this year are.

[00:47:59] some publicly traded companies and some very very large organizations picking up smaller ones but it also mentions this you know a couple of handful of maybe smaller deals we had Andy Mitchell from Mallory safety right his.

[00:48:14] from a niche safety supplier in the Pacific Northwest to the 48 branches across the country now in the safety and industrial segment you know they're working with that the smaller.

[00:48:26] company that's maybe struggling with interest rates right now or they don't have a strong balance sheet to compete and to grow against and so they're acquiring some of those smaller companies we see multiple deals but what I saw most of this year you today is bigger organization deals.

[00:48:42] good well we appreciate that info and it's great that you know we've got organizations like MDM and any W National Association of Manufacturers as well distribution strategy group lots of different organizations are following these acquisitions.

[00:48:58] David Gordon and his newsletter Scott Costa who's going to be with us in a few weeks as well from the electrical distributor publication from any AD it's great to see all of this.

[00:49:10] the groups that are falling hardies doing the same thing following in ISA are all following on managing and watching this. so what's the next time you mentioned this earlier right.

[00:49:23] yeah so this is our new people in leadership section here's where we are in the AI high cycle according to HR tech leaders and I thought this article was.

[00:49:34] good on a couple of fronts one is talking about how AI will be used just to manage HR operations and you know getting employee information and helping employees especially in larger companies get information they need.

[00:49:49] and so forth but the other part they just barely touched on this was the how do you start training or how do you start really enabling employees to.

[00:49:59] and I think this is an area that has been really really really underestimated just kind of what we were touching on before. it's really easy to go oh we're going to lay off a bunch of people because AI is going to make us more efficient.

[00:50:16] yep but if you're rusty your workforce doesn't really understand how to leverage AI or how that's going or how to you know use it successfully. now you're going to end up with fewer people that really don't know what you're doing and expectations are not going to.

[00:50:31] to play out so I think the HR world of related to AI is maybe one of the biggest areas in an organization that have to really understand. yep I'll AI would be incorporated into everybody's job and in the business.

[00:50:46] well in to right you know to kind of your point here is that you know the HR side of things right is where we end up with policies and so forth as well and you know we've got. what's that acronym bring your own device.

[00:51:02] BYUD right which we've done with cell phones right well what happens when we've got a handheld AI device right how do we what's the use cases how are we able to use those things what what are what's acceptable.

[00:51:17] this is you know big issue too right what's acceptable that of company documents that we load into a into an AI tool chat GPT is an example right to analyze there's so many factors that but I like I really like we're talking about you know the people side of it and having them trained in understanding.

[00:51:35] yeah and then Bob asked where are we on the AI high cycle according to the article. I believe what the article is trying to say is we're kind of coming out of that and racial hype.

[00:51:45] I believe if I remember right from the art you're right it's it's it's here and we need to start in I think this is a great question right.

[00:51:55] it talks about hype cycle and then it says making meaningful use of a chart of AI in HR this just happens to be from HR executive magazine.

[00:52:04] where this articles from right but so they're taking a bend but their point out of this article to answer to that question is really tied to the.

[00:52:12] yeah okay it's here it's here to stay and now it's time that we get our head around it and what does it mean to our organization.

[00:52:18] yeah so if I remember the gardener hype cycle right you have the hype and then you have the trough which is the area of disillusionment. And then you kind of start to have some real irrelevant use cases I think where.

[00:52:29] it's still weird to say because of as I said before AI is so it's not you just can't categorize AI is one thing right and what AI is today and what it will be in the future.

[00:52:40] in terms of its application and use cases is is there but I think what they're saying here is that yeah we're definitely either headed into that area of disillusionment or coming out of it.

[00:52:50] But I think it's going to happen much faster the velocity of that hype cycle and those peaks and troughs are going to happen much faster is different. applications of AI come out and how those get incorporated in the organization.

[00:53:05] Well and they make the comment in here right it says in 2023 HR leaders shifted from viewing AI is a novelty to considering it's a legitimate tool for organizational success. And starting to look into the applications within the HR and the people side of a business so.

[00:53:24] They talk about you know looking at it as transformative advancements but they're going to take time and they it says one of the quotes here's when it comes to gender today I and HR I find the people are significantly underestimating.

[00:53:38] How much it is going to change way HR professionals can do their jobs and how well possibly impact the employee experience in the long run so I love that right and this kind of goes back one of the reasons we added this segment to the newsletter as we had our.

[00:53:52] And our all star cast on in January with Mike Marx and Ian Heller and and dirt beverage and dirt spent quite a bit of time talking about you know his travels and is we supply America to work calling on family owned and independently owned an employee on distributors.

[00:54:10] And he really kind of got that's thinking about in fact he called us out on it and said you guys don't cover the people side of things very much so we added this people and leadership section as well so I think this is a nice little fit here as we look at the strategies that can come out of.

[00:54:25] Using AI within the HR side of an organization that is going to benefit the employee right and I think when we start having you know AI sharing with us whether it's looking at.

[00:54:37] And it's a simple example right I mean, I mean, this is this is the same surprise you'll just hit my head right just how with with the wholesale distributors and manufacturers that use.

[00:54:58] Leeds more channel cloud our CRM and customer intelligence platform right we're ready AI tools against all their connected data from. ERP and from marketing automation and from e-commerce and bring that we're running an AI tool against that called genius feed that is bringing alerts to.

[00:55:17] quotes that are closing leads that need to be worked all the different things that can accelerate business growth could use the same kind of tool within an AR thing that says hey you know what Tom's been out five days in the last six months because of his his you know I'll use my case right his mother's failing health.

[00:55:33] Let's check in with Kevin right his mom's in failing health right and I think it's just kind of triggered for me from this article reading at this again this morning was some good stuff happening.

[00:55:44] Well, I think going back to what we were saying earlier employees are going to have to get to know the business the business are going to have to get to know the employees right and that's a little bit of a different objective versus okay your worker you come in you know that kind of stuff it's it's.

[00:56:02] It's a very different you know again this is what dirt was is been emphasizing and not just on our show but he emphasizes in general is.

[00:56:11] You really need to be more act more of like a family rather than hey you just come into your job and leave it five o'clock right and this is going to allow the HR people to understand their employees I think better in the same way employees are going to need to understand the business better so hey we're almost going to be on time if we can kind of zip through this last part here.

[00:56:31] Well you have a time limit I don't have a time limit between mind mind so that's fine, but you know you're right so we just back to the format right we just hit our last segment of the newsletter.

[00:56:42] People in leadership section we also have an industry scoutel belt section there's three articles there this week we talk about there's some published data what's going on with hearty which is HVAC refrigeration distributor group for that trade association they've got some macro.

[00:56:59] Economic data and some residential market analysis their revenue for there which is interesting right we have quite a few. Customers in the space very large distributors in this space that are hearty members that are.

[00:57:13] You know charging ahead and their businesses are extremely strong we're talking with a couple of others right now but hearty distributors sales revenue fell in 7.8% it's at a December so. Interesting to watch what happens with that coming January February.

[00:57:28] We talked about it last Michael talk about a little bit further we've got some executives from National Association of wholesalers coming on the show this year.

[00:57:37] I think we've got three of them scheduled throughout the year to talk a little bit more about any W's acquisition of MDM I think it's going to be good for everybody across the board I think it's going to be valuable lesson.

[00:57:50] The content that we can share in our little platform and space on the on the planet that we occupy so that'll be helpful.

[00:57:58] Another acquisition by Imperial Day good information there so that's a little bit about it again this we're following through from our newsletter that we cover each week all around the Hornet wholesale distribution.

[00:58:08] And manufacturing if you don't get it let us know we'd be happy to share that finally in closing today we have a couple of weekly features one's called the good read.

[00:58:18] That tends to be articles about leadership as well it might be about executive health or mindset or just good for the sole type stuff is what we try and share here this is article talks about the best way to share information with your leadership team good article from ink magazine that might be of interest.

[00:58:38] Last two segments Tom that we cover each week we have our index tracker of publicly traded distributors.

[00:58:44] This is something that the good folks Ian and Jonathan at distribution strategy group post on their website you can see it here on our newsletter but it's always available if you want to see what the index of publicly traded distribution companies are are doing out there it's a great little tool to watch this segment of the stock market and so forth.

[00:59:06] And lastly bunch of events coming up right we've got next week is the distribution AI summit that is an MDM event.

[00:59:15] Granger show the following week and then we start going into AD and an AED and PDTA and so forth events I'm headed a week from Monday to 80s affiliated distributors marketing and ecommerce event where we're a preferred service provider partner there so I'm looking forward to that one so anything to add.

[00:59:35] Yeah, it's a great idea. Yeah, it's a marketing summit was a great event last year in San Diego I'm kind of jealous I'm not going to be attending this year. It's in San Antonio you want to go for me you're going to.

[00:59:46] San Antonio San Antonio's got some really good Mexican food. I'll change the plane tickets. All right. You're going all right. That means you need to go pick up the the trade show booth and all of that stuff and get it all shipped you good with that.

[01:00:01] I'll take care of it. I'll give you my customer projects and I'll trade you. I'll go to the show. You keep you keep working on helping our customers view their data in ways they've never done it before all right.

[01:00:13] All right good well that's it from stormy Southern California Tom Burton Kevin Brown we get together every week to discuss what's happening in wholesale distribution. And manufacturing we look at events throughout the world that are happening and see how those impact the audience that we serve each week.

[01:00:32] Finally, if you'd like that newsletter when last time hello at leadsmartek.com or www.aroundthehornpod.com all of our episodes are recorded in the leadsmart technologies linked in page Facebook page and YouTube channel.

[01:00:49] So you can see all of the previous ones there and lastly if you're a podcast listener and want to listen from your car whatever it might be apple podcasts Spotify podcast wherever you listen download us there.

[01:01:01] Last thing one more request click the like button the follow button the share button. Leave a review on the podcast formats that helps us get this message out to a wider group of people finally things everybody for your comments Tom I'll see you Monday.

[01:01:18] Yeah, there in Bob. Thanks Susan. Thank everybody who jumped in with all the great comments.

[01:01:22] Yeah I'm playing to come and see you down in Orange County. If long as I don't get trapped here by whatever the next storm is supposed to be just take the canoe if need be versus the car. Right.

[01:01:35] Yeah, so well, all right. So we'll wish everybody a fantastic weekend. We will see you next week and we will ask you to be kind to be safe and do good things. How are we going to weekend?

[01:01:51] We hope you enjoyed today's episode and our guests each week. We try our best to dig into the topics that are impacting your business.

[01:01:59] So please reach out to us and let us know how you think we can make the show better or topics you'd like for us to tackle or talk about more often and even guests you'd like to see join us.

[01:02:09] We're looking forward to bringing you next week's session and hope that until then you stay safe, stay focused and do great things. If you haven't already, please subscribe to the podcast and leave a review to help others in wholesale distribution get access to the conversation.

[01:02:26] And finally, please check out our sponsor LeedsMark Technologies and their manufacturing and wholesale distribution industry CRM, customer intelligence and channel collaboration platform. That's LeedsMark Technologies at leadsmarttech.com