Unraveling The Complexities Of The Latest Economic Data With Guest Paul Kennedy

[00:00:04] [SPEAKER_00]: Welcome to Around The Horn in Wholesale Distribution, with Kevin Brown and Tom Burton.

[00:00:10] [SPEAKER_00]: Sponsored each week by lead smart technologies, Tom, Kevin and their guests review the news of the week,

[00:00:16] [SPEAKER_00]: and dive deep into the topics impacting manufacturers, Wholesale Distribution, independent sales agents, and the global Wholesale Supply Chain.

[00:00:24] [SPEAKER_00]: Whether it's M&A, Sass and Cloud Computing, B2BE Commerce or Supply Chain Issues, we peel back the onion with our guests into the topics that impact your business the most.

[00:00:37] [SPEAKER_02]: Welcome everybody, welcome my friend Paul Kennedy. Good to have you with us this morning.

[00:00:43] [SPEAKER_03]: Good morning, great to be with you Kevin. Thanks. Thanks for the help. I'm going to see you.

[00:00:47] [SPEAKER_03]: Yeah, likewise.

[00:00:48] [SPEAKER_02]: We're appreciative of you making the time.

[00:00:51] [SPEAKER_02]: So everybody tuning in right now, Kevin Brown here with Leeds Mark Technologies and my co-founder and lead smart Tom Burton and lifelong friend and our friend Paul.

[00:01:02] [SPEAKER_02]: Before we kind of dive in and I do all our housekeeping that we do every week.

[00:01:07] [SPEAKER_02]: You've been around for a while in wholesale distribution. Maybe if you wouldn't mind give me a little bit of your story and then the Dakota Supply Group story.

[00:01:17] [SPEAKER_03]: You wouldn't mind. No absolutely thanks, Kevin and saying I've been around for a while kind of makes it sound like a mold.

[00:01:24] [SPEAKER_03]: You know, I didn't mean that you just had it had a few cool really cool jobs there you go.

[00:01:31] [SPEAKER_03]: So actually my you know, I started out with my cool jobs actually before I had an distribution after I get out of the Navy I was a pump septic tanks.

[00:01:42] [SPEAKER_03]: So that was my actual kind of introduction into the construction trades and all that and then I was a plumber for for seven years.

[00:01:50] [SPEAKER_03]: Before I got into the distribution side, I have run a couple of branches when I started with Westburn supply back in the back of the mid 90s and then they were acquired by Ferguson and the year be 2000s.

[00:02:04] [SPEAKER_03]: So it was with Ferguson for many years kind of running running businesses for them both in the US and Canada.

[00:02:12] [SPEAKER_03]: And then when I came back from Canada in 2013, I joined first supply as their president there at mid west family owned mid west, a multi generation plumbing and HVAC distributor.

[00:02:26] [SPEAKER_03]: And then had the opportunity to join DSG a little over five years ago and that's that's why I am today.

[00:02:35] [SPEAKER_03]: It's currently serve as the presidency of DSG we're a 100% employee owned distributor with 55 locations kind of across the upper mid west.

[00:02:47] [SPEAKER_03]: We serve the electrical plumbing HVAC waterworks, sewer water and well telecom data com utility and industrial automation pieces of the business we don't do everything everywhere but.

[00:03:02] [SPEAKER_02]: We do a lot of stuff across our footprint that's great that's fantastic see went from being in Canada for a few years with Ferguson is that right.

[00:03:11] [SPEAKER_03]: Yes, well we can't it but.

[00:03:14] [SPEAKER_03]: And now you're in your in way southern Canada in Minnesota right in Minnesota yes I live in live in manyapolis and our DSG headquarters is in a Minneapolis suburb.

[00:03:27] [SPEAKER_03]: Good with DSG how many branches how many people so 55 locations across eight states in the upper mid west we have a thousand 1000 employees owners.

[00:03:39] [SPEAKER_02]: That's awesome I love the the east side of things they did some work with a company in number of years ago that was an east off and got to kind of see that.

[00:03:46] [SPEAKER_02]: I did some in our executive work with them kind of got to see the inner workings of that we had another guest on a few months back Mike Mortensen with Alaska rubber group or ARG there.

[00:03:57] [SPEAKER_02]: 100% employee owned company it's great great to see that and I saw some of your team is joined us today as well so nice to have some of the new folks that haven't been with us before so.

[00:04:09] [SPEAKER_02]: A little bit of background from you is great because we know we're going to get some fantastic insights from you today so I'll set your bar pretty high for you now but I'm very confident in it so before we dive in further.

[00:04:19] [SPEAKER_02]: We're doing a little bit of the housekeeping we do every week and I'm Kevin Brown Tom Burton where the co founders of lead smart technologies lead smart is a AI enabled CRM and customer intelligence solution.

[00:04:31] [SPEAKER_02]: It's built specifically for wholesale distribution of manufacturers so our system isn't built for a school district or a law firm like traditional CRM's it can go anywhere we have built the solution based on my 30 plus years in wholesale distribution.

[00:04:46] [SPEAKER_02]: Tom's 30 years plus in the technology world we came together to build a solution for specifically for distribution on the manufacturing side and the distribution side so that's what we do.

[00:04:58] [SPEAKER_02]: But what we do also is every Friday morning very bright and early at least for us on the west coast here, Tom and air both in California we published a newsletter it's called Around the Horn and wholesale distribution that newsletter kind of takes.

[00:05:12] [SPEAKER_02]: A little amalgamation or a consolidation of a lot of things going on throughout the world in very specifically when we talk about.

[00:05:21] [SPEAKER_02]: M&A we talk about artificial intelligence technology what's happening in the economy and we bring all that together we try and relate that to what's happening in manufacturing wholesale distribution.

[00:05:31] [SPEAKER_02]: We do that through that newsletter if you don't get it and you would like to there's two simple ways to get that you could very easily send us an email email addresses hello at leadsmarktech.com.

[00:05:44] [SPEAKER_02]: Secondly we have a website for this podcast it's www dot around the horn pod.com and you can see all of our past episodes there and listen to those and sign up for the newsletter so if you'd like it you don't get it.

[00:05:58] [SPEAKER_02]: Catch us away from there we'd be happy to get you involved.

[00:06:02] [SPEAKER_02]: Final piece on this you may be with us live this morning it's Friday morning December 1st we're coming in the last month of 2023 so we're live on LinkedIn YouTube live Facebook live.

[00:06:15] [SPEAKER_02]: If you're listening to us on the podcast you will not be seen.

[00:06:20] [SPEAKER_02]: Our newsletter that will be up on the screen so we want to give you a little warning ahead of time if you're listening in on the podcast we're on apple podcast Spotify all the popular podcast formats our editors take this morning's live broadcast and prepare it for that later in the day.

[00:06:34] [SPEAKER_02]: You won't see that but again if you'd like that newsletter we're happy to get it out to you so that's it.

[00:06:39] [SPEAKER_02]: Tom anything to add before we dive into the news.

[00:06:41] [SPEAKER_01]: No I just say good morning to will good morning to run and yeah if you're out there listening jump in please say good morning to Paul and love to know where you're from and what's happening and I think it's going to be one of these discussions today where we're going to be great to get some feedback from from the listeners as well so.

[00:06:57] [SPEAKER_02]: Tom read real good comment read wills comment maybe pop it up on the screen.

[00:07:03] [SPEAKER_01]: There you go.

[00:07:03] [SPEAKER_01]: Friday morning dancing is a must for Kevin is a must.

[00:07:09] [SPEAKER_01]: Well, Queen wins my drop.

[00:07:12] [SPEAKER_03]: Well good morning well I thought you had a little better better taste than I'm dancing but good to see you this morning.

[00:07:23] [SPEAKER_01]: You said that much better than I would have something.

[00:07:26] [SPEAKER_02]: That was diplomatic maybe maybe one of our other guests will defend me as well anyways it's good to have folks with us and yeah definitely if you're if you're out there not only let us know you're here.

[00:07:38] [SPEAKER_02]: But ask questions make comments share with us your thoughts.

[00:07:43] [SPEAKER_02]: Those on LinkedIn though that are live we've seen in the last few weeks a couple of different times that we've had some troubles with.

[00:07:52] [SPEAKER_02]: The ability to ask questions so hopefully those come through all this morning and we've had a little bit of a struggle since but good to have let's see I can see this on my phone.

[00:08:03] [SPEAKER_02]: Paul you have a fan in Mike Bernard see that's who this year so.

[00:08:09] [SPEAKER_03]: You're just the best I like that so Mike is the best and if we get into digital transformation I'll tell you how Mike kind of helped steer me on our digital transformation journey here at DST that's great good well we've got Christine with us from.

[00:08:26] [SPEAKER_02]: Chris is with us here from Brazil we always love it when she joined us most mornings we have.

[00:08:31] [SPEAKER_02]: Three or four in minimum countries participating with us here live and then on the podcast and other seven to eight countries that we get out to so that's exciting.

[00:08:41] [SPEAKER_02]: So let's dive in let's talk about this economic growth there we have an article the first one we're going to talk about today is US economic growth for last quarters revised up to 5.2% up from the original what we saw and we talked about here on the broadcast.

[00:08:55] [SPEAKER_02]: A couple weeks ago it's 4.9% so I'll let you guys go throw it out to you guys have a few thoughts we'll hear if we've got pessimism optimism or lukewarm water still that we've been talking about historically.

[00:09:08] [SPEAKER_01]: I don't have any of those I just have confusion so Paul maybe you can help us unravel a little bit of this because it's just it's just hard for me to get my hands around some of the state.

[00:09:18] [SPEAKER_03]: Yeah, let me give you my thoughts and I've got the same confusion as you do Tom you know it's but what it I think solidifies to me is nobody has any idea what's going on.

[00:09:31] [SPEAKER_03]: Every time we get a one of these that can make me feel a lot better Paul yeah.

[00:09:35] [SPEAKER_03]: The you know you get these wild market gyrations and then you know a month later the numbers get revised right so yeah a couple of interesting things that I kind of took out of.

[00:09:49] [SPEAKER_03]: Out of this you know that the consumer spending was actually a downgrade in this revised report and housing increased housing investment increase I just I thought that was an interesting.

[00:10:02] [SPEAKER_03]: Dynamic and as you know as you know I were talking earlier just you know how much of.

[00:10:10] [SPEAKER_03]: You know economic growth is being driven by consumer spending and is there a detachment.

[00:10:14] [SPEAKER_03]: Or decoupling between consumer spending and kind of be to be particularly in you know industrial distribution in that space you know we actually saw some some.

[00:10:27] [SPEAKER_03]: You know lightness in our you know our business probably more so in late second quarter through the third quarter and are starting to see.

[00:10:36] [SPEAKER_03]: You know that that come back now we're actually starting to see our waterworks business pick up which is usually a leading indicator in the construction space.

[00:10:46] [SPEAKER_03]: You know waterworks investment usually goes in first so that's usually a pretty good.

[00:10:51] [SPEAKER_03]: The projectov believer is starting to grow again after after kind of leveling out so that gives me a bit of optimism as we go into twenty twenty four.

[00:11:03] [SPEAKER_03]: But you know coming off the last couple of years right where we had this inflation driven.

[00:11:09] [SPEAKER_03]: Boom it's just been different twenty twenty three has been different and I think that is caused a lot of consideration for folks as we as we start thinking about what twenty twenty four looks like and what.

[00:11:21] [SPEAKER_03]: information we can glean from the economic report, the greater economic reports

[00:11:26] [SPEAKER_03]: that are moving forward. It's clear that interest rates have had an impact on housing.

[00:11:33] [SPEAKER_03]: There's no doubt about that. We're starting to see that in effect, some multi-family

[00:11:39] [SPEAKER_01]: construction as well. Do you see Paul? A lot of multi-family projects right had maybe five

[00:11:46] [SPEAKER_01]: loans or whatever that we're lower. Now they're going to have to be refinanced or they are being

[00:11:50] [SPEAKER_01]: refinanced at a higher rate. Are you seeing any impact from that or any sort of how the

[00:11:56] [SPEAKER_01]: multi-family sort of or disconstruction in general is is handling that kind of stuff?

[00:12:03] [SPEAKER_03]: Well, the rents because of this housing unit shortage that is kind of across the country,

[00:12:12] [SPEAKER_03]: where we're what six million housing units kind of short to support demographic growth.

[00:12:22] [SPEAKER_03]: You know landlords have kind of been in a position to be able to raise rents and I think they're

[00:12:25] [SPEAKER_03]: starting to, I think I've read in this article that rents were under pressure.

[00:12:31] [SPEAKER_03]: Now, and you're starting to see some of that legislated, St. Paul Minnesota put rent control legislation

[00:12:37] [SPEAKER_03]: in here and it really dried up to your point and really dried up new investment because they can't,

[00:12:45] [SPEAKER_03]: those economics don't work for the current borrowing structure. Yeah.

[00:12:50] [SPEAKER_02]: That's interesting. So Paul and your business or what you hear from your peers and you know

[00:12:56] [SPEAKER_02]: one of the things we didn't mention I think this was you being a little humble is you're on multiple

[00:13:03] [SPEAKER_02]: boards of directors if I remember correctly with affiliated distributors, the buying group that

[00:13:08] [SPEAKER_02]: DSG is associated with other industry associations you're on some boards and very active in.

[00:13:14] [SPEAKER_02]: So I'm going to ask you this question, Tidy, you're thinking at DSG and then what your with your peers is

[00:13:20] [SPEAKER_02]: one of the things this article talked about was inventory rates going back up.

[00:13:26] [SPEAKER_02]: I don't know that everybody in wholesale distributions inventories if you could get product through

[00:13:32] [SPEAKER_02]: 2022 and earlier this year. I don't know that people's inventories fell off with that much.

[00:13:36] [SPEAKER_02]: So I want to ask you about that and then secondly, second part of the same question is

[00:13:41] [SPEAKER_02]: you know we look at purchasing managers indexes. We look at home starts. We look at all these

[00:13:46] [SPEAKER_02]: we have all these factors that come out you know the mid-Eastern market manufacturing index.

[00:13:54] [SPEAKER_02]: We've got all of these different things. Are there any one in particular that you and or some of

[00:13:59] [SPEAKER_02]: your peers or your CFO and other finance people? Are you following any one of those in particular?

[00:14:06] [SPEAKER_02]: Are you looking at them kind of combined and then benchmarking that against your existing business

[00:14:11] [SPEAKER_03]: in your history? Yeah kind of looking from a combined perspective and just from the inventory

[00:14:20] [SPEAKER_03]: investment which that was another note that I kind of took. This is the season for buying group

[00:14:27] [SPEAKER_03]: conferences and all that. Of course, in the last 60 days have been with a lot of my peers and

[00:14:34] [SPEAKER_03]: with a lot of manufacturers and the common word was destocking. There has been a tremendous amount

[00:14:42] [SPEAKER_03]: of destocking going on so you know the moderate growth that the markets are saying you know

[00:14:48] [SPEAKER_03]: and if you saw AD's published a third quarter results here I think a week or two ago and

[00:14:55] [SPEAKER_03]: you know members had you know had had good growth but that's not translating and increased

[00:15:01] [SPEAKER_03]: purchases from you know from the supplier partners because there has been so much destocking

[00:15:07] [SPEAKER_03]: going on because you had there's a lot of inventory that you know all the panic buying over

[00:15:12] [SPEAKER_03]: the last couple of years and then all of a sudden demand dropped off a little bit and everybody

[00:15:16] [SPEAKER_03]: had built new manufacturing capacity and shipped everything right with the exception of electrical gear

[00:15:24] [SPEAKER_03]: you know electrical gears is still still a struggle for for most manufacturers and for most

[00:15:31] [SPEAKER_03]: distributors but so you know from a DSG perspective our inventory is our inventory peaked in April

[00:15:39] [SPEAKER_03]: and is probably off you know from there and this is really just about destocking

[00:15:48] [SPEAKER_03]: a little bit of deflation we're probably down 20% since our peaked April that's substantial

[00:15:59] [SPEAKER_02]: lawn sales with you know with sales growth right okay so basically at these buying group events

[00:16:06] [SPEAKER_02]: the guys sitting at the other end of the table from you the manufacturer side we're

[00:16:10] [SPEAKER_02]: sweating and begging and you've got you've got some inventory left and things didn't go necessarily

[00:16:16] [SPEAKER_03]: as well as they wanted well and they and they know I mean the manufacturers are really trying to

[00:16:24] [SPEAKER_03]: understand more deeply what what you're self-release right so they can kind of plan as they look

[00:16:30] [SPEAKER_03]: forward into 2024 when are you going to be kind of leveled out from a stocking perspective so they'll

[00:16:37] [SPEAKER_03]: you know they have a better idea when they can expect a demand that's great to hear and so

[00:16:43] [SPEAKER_02]: could question kind of related to your business because I oftentimes think in my head just because

[00:16:47] [SPEAKER_02]: it's my background where I come from on the manufacturing distribution side is kind of

[00:16:53] [SPEAKER_02]: commodity driven products and you don't have necessarily as I would assume a big part of your

[00:16:59] [SPEAKER_02]: business is not commodities that a big part of our business is commodities when you think about

[00:17:05] [SPEAKER_03]: you know conduit you think of wire you think of the works pipe and it's been a big impact this year

[00:17:12] [SPEAKER_02]: so did you have a significant struggle in your in your business as well in

[00:17:20] [SPEAKER_02]: waterworks pipe-alvent fitting HVAC electrical with acquisition of products because from offshore

[00:17:26] [SPEAKER_02]: suppliers in 2021 and late 2020 we did the reason I started jumping the reason I'm asking the

[00:17:34] [SPEAKER_02]: question is on in a lot of in standard industrial maybe industrial safety you get into some of the

[00:17:41] [SPEAKER_02]: other areas with it's just almost all commodity business they went through this phase where they were buying

[00:17:46] [SPEAKER_02]: everything that they possibly could right because it couldn't get their hands on things and then

[00:17:52] [SPEAKER_02]: now they've had this maybe you could call it a hangover for in the late 2022 and to 2023

[00:17:59] [SPEAKER_02]: because things have balanced out and now you've got the offshore manufacturers you know frustrated

[00:18:04] [SPEAKER_02]: because they can't get enough orders because they was to capacity as well. Yep you know you're absolutely

[00:18:09] [SPEAKER_03]: right and that's exactly how it played out and it was not only in the commodity space it was also

[00:18:15] [SPEAKER_03]: in the finish good space because a lot of it was components that were being imported that were

[00:18:21] [SPEAKER_03]: completing finished goods you think of water heaters you think of furnaces you think of you know

[00:18:27] [SPEAKER_03]: where the the wall or motor was coming from an offshore supplier and that disruption and

[00:18:34] [SPEAKER_03]: air supply chain impacted so you had this you know kind of picking the Python of the

[00:18:40] [SPEAKER_03]: motor log that's you know kind of still working itself through. Tides kind of into the comment

[00:18:45] [SPEAKER_02]: that Will Quinn is making here Will's a regular with us on on the broadcast from

[00:18:51] [SPEAKER_02]: where works for in for the ERP company and he was kind of talking about some manufacturers that he

[00:18:57] [SPEAKER_02]: had talked to using artificial intelligence and machine learning to kind of manage inventory rates

[00:19:03] [SPEAKER_02]: I like that follow up comedy made because just in time inventory's turned into just in case.

[00:19:10] [SPEAKER_02]: Very good. We appreciate that Will. Tom let's say for any final thoughts on economic

[00:19:15] [SPEAKER_02]: stuff time. No no let's let's move on here. All right so we talked about this quite a bit and

[00:19:22] [SPEAKER_02]: it's interesting you know I wouldn't have thought 68 weeks ago when we started this

[00:19:28] [SPEAKER_02]: on our broadcast with you around the horn podcast journey that we would talk that much about labor

[00:19:34] [SPEAKER_02]: issues but you know when you stop to think about it and we're going to talk about an article from

[00:19:39] [SPEAKER_02]: Associated Press about it's called the auto workers strike cut forward sales by a hundred thousand vehicles

[00:19:44] [SPEAKER_02]: and cost company $1.7 billion in profits so again if you're listening on the podcast

[00:19:50] [SPEAKER_02]: we're reviewing a newsletter around the horn and wholesale distribution that comes out every week

[00:19:55] [SPEAKER_02]: you'd like copy of that each week and you don't get it please let us know but

[00:20:01] [SPEAKER_02]: earlier in the year what we'll be talking about we talked about portraits on the west coast

[00:20:06] [SPEAKER_02]: and the potential impact of that right the port of Long Beach in LA that literally is a

[00:20:12] [SPEAKER_02]: spit of land between them that's man-made is what separates those two I think if you put their

[00:20:19] [SPEAKER_02]: combined containers that they process that see the third or fourth busiest port in the world

[00:20:24] [SPEAKER_02]: and then you start moving tons and tons of fruits and the vegetables come in from Latin America

[00:20:30] [SPEAKER_02]: into San Diego plus cars and you work your way up to San Francisco and up to Portland and then

[00:20:37] [SPEAKER_02]: up to Seattle and then up to Vancouver portraits can be major so we talked about that quite a bit

[00:20:42] [SPEAKER_02]: then the Canadian there's going to be Canadian port strike A was a risk of that

[00:20:49] [SPEAKER_02]: verted these and now we come in and about a month ago or so to this auto worker strike and we

[00:20:55] [SPEAKER_02]: talked about the ripple effect RP Ron Paulson retired Granger executive was on with us and

[00:21:01] [SPEAKER_02]: he was sharing with us some major numbers of the trickle down effect about not only you know how

[00:21:05] [SPEAKER_02]: many people had impacted but all the different companies and now this is come into bear right we're

[00:21:11] [SPEAKER_02]: seeing it with this this glut let's just say glut but the challenge that's come out of that

[00:21:18] [SPEAKER_02]: Cut sales by about 100,000 vehicles in a cost of the company 1.7 billions in profits for the year

[00:21:24] [SPEAKER_03]: so any touch from both of you on that? Well from my perspective I think it's maybe just kind of

[00:21:33] [SPEAKER_03]: indicative of kind of this shift of the power of the worker and you know well union non union doesn't

[00:21:40] [SPEAKER_03]: matter but I mean I think we've seen it in all businesses as you know it's been tougher to find employees

[00:21:46] [SPEAKER_03]: and they have other choices so you have to have a compelling offer and they they

[00:21:55] [SPEAKER_03]: you know with you know with the union organizing they found a way to push it to the limit.

[00:22:03] [SPEAKER_02]: What's interesting too I watch this with driven many fords over the years and you know where

[00:22:09] [SPEAKER_02]: their most profits are is in their trucks and their SUVs and these guys went after this

[00:22:16] [SPEAKER_02]: hardcore right they they they went they started a little soft and then boy as soon as they hit

[00:22:21] [SPEAKER_02]: those those plants and now we can see this right those plants are shut down they're not putting

[00:22:25] [SPEAKER_02]: out as many vehicles and it's going to have a big hit I'm thinking we're going to be talking

[00:22:29] [SPEAKER_02]: about this again in a few weeks because we're going to see more data that what comes out I hope

[00:22:34] [SPEAKER_02]: at least we see the data of the ripple effect that the impact this had on the Johnson controls and

[00:22:40] [SPEAKER_02]: leaders and you know all these first second third tier suppliers that make up your car you

[00:22:46] [SPEAKER_02]: know I don't think most people think about this but I don't know what the number is in fact

[00:22:50] [SPEAKER_02]: RP just made a comment he may know because he worked at Granger running a great late

[00:22:54] [SPEAKER_02]: scenario for quite some time but I'm gonna guess there's I might be way in low here minimum of

[00:23:02] [SPEAKER_02]: 25 to 40 different suppliers are putting products into a factory that go into your cards probably

[00:23:09] [SPEAKER_02]: actually a lot more than that but we don't think about that we just think about this big picture

[00:23:14] [SPEAKER_02]: in that impact and when you hit a strike in any type of plant that ripple effect is huge so

[00:23:21] [SPEAKER_02]: it's in a state maybe maybe they all just I don't companies maybe just need to become ESOPs

[00:23:27] [SPEAKER_01]: whether there's one other thing though that I think is worth mentioning here in Paul

[00:23:32] [SPEAKER_01]: would like your take on it I was reading article last night and this was related to a man

[00:23:37] [SPEAKER_01]: who's actually in this wasn't tech industry or whatever where they said millennials and Gen Z the

[00:23:43] [SPEAKER_01]: average time they spend on a job is less than three years right now versus you know the older

[00:23:48] [SPEAKER_01]: generation which would spend 30 years or 25 years in a position and so not only are you losing

[00:23:55] [SPEAKER_01]: people and all of that but it's very hard to build that tribal knowledge right is very hard to build

[00:24:00] [SPEAKER_01]: that experience that you you need when you have that level of turnover coming along the way I assume

[00:24:07] [SPEAKER_01]: this obviously is the union tries to get these better contracts that they're trying to attract

[00:24:12] [SPEAKER_01]: people and get them to stay longer and so forth but I think also and I think you know Ron just

[00:24:18] [SPEAKER_01]: pointed this out as well I still believe that this is going to be an incentive or a catalyst for

[00:24:24] [SPEAKER_01]: more automation more AI to come in to these organizations because the AI doesn't quit I think AI

[00:24:31] [SPEAKER_01]: doesn't quit after two or three years the knowledge that's developed doesn't leave there

[00:24:35] [SPEAKER_01]: and these people that come in are not experts in what it is so I don't know Paul if you're

[00:24:39] [SPEAKER_01]: seeing that at all in your industry with younger workers or anything like that so well I don't think

[00:24:45] [SPEAKER_03]: we see it so much in DSG because we're in ESOP so you know we've got some stickyness that goes

[00:24:49] [SPEAKER_03]: beyond it but I think you're you're spot on with that and I think the you know the AI and other

[00:24:56] [SPEAKER_03]: automation that is going to continue I mean part of it is to they help you know kind of

[00:25:05] [SPEAKER_03]: there's less workers there's less workers available that so some of that work for the work

[00:25:11] [SPEAKER_03]: to get done is it's going to have to shift in how the work actually gets done.

[00:25:17] [SPEAKER_02]: I've put time you brought up a good point there right about millennials and in the amount of time

[00:25:23] [SPEAKER_02]: of jobs and I think you know historically right the labor negotiations whether it's auto workers

[00:25:28] [SPEAKER_02]: or longshoremen or whoever it might be it's about the long haul for the benefits and so forth

[00:25:37] [SPEAKER_02]: for the worker right thinking that the worker is going to stick around and you know we probably

[00:25:41] [SPEAKER_02]: all of us you know are probably within a few years of age here the three of us talking today

[00:25:46] [SPEAKER_02]: you know we probably think about our fathers you know Tom I know growing up with you your

[00:25:51] [SPEAKER_02]: dad you know it was in the same industry forever my father is in the same industry forever

[00:25:58] [SPEAKER_02]: and many many people you know started their first job got the gold watch when they retired

[00:26:03] [SPEAKER_02]: and it had been 30 40 years with the same company well now you see if with some of the requests

[00:26:08] [SPEAKER_02]: in these negotiations were that the new people coming in have a much shorter time before they get

[00:26:14] [SPEAKER_02]: to that top tier pay which is probably the idea about getting more people in the union

[00:26:19] [SPEAKER_02]: and getting them to that higher rate more quickly and making up for maybe potentially what you

[00:26:25] [SPEAKER_02]: tell me Tom is that they may not want to stick around that long so they can get good wages earlier

[00:26:31] [SPEAKER_01]: no I think you have to there has to be a wait a stickyness as you said Paul there has to be a

[00:26:37] [SPEAKER_01]: way to get more stickyness in any sort of job but at the same time you got a backstop that by

[00:26:43] [SPEAKER_01]: using AI and other technologies because that knowledge it's not even that the tribal knowledge

[00:26:48] [SPEAKER_01]: doesn't exist doesn't have enough time to develop if somebody's coming up with the way to

[00:26:52] [SPEAKER_02]: so all right let's jump on just we'll just talk kind of quickly the next article that we're talking

[00:26:59] [SPEAKER_02]: about the news letter today is again it's a little bit further on this right is the article says

[00:27:04] [SPEAKER_02]: the next on UAW is to do list add more members from non-union factories and it just it kind of

[00:27:10] [SPEAKER_02]: made me laugh it's I'm not happy about what happened here but it's really interesting I don't

[00:27:22] [SPEAKER_02]: and Elon Musk was there and they were talking about that you know the they were trying to pin him

[00:27:28] [SPEAKER_02]: down a little bit on how he felt about or what the impact was of you know Disney in some major

[00:27:34] [SPEAKER_02]: corporations pulling out their their advertising from from ex or Twitter and and he was pretty vocal right

[00:27:42] [SPEAKER_02]: he said to go you know XYZ themselves and instead it on this live broadcast and so he's he's not

[00:27:50] [SPEAKER_02]: afraid of controversy right and there's a whole another discussion about that because you know

[00:27:55] [SPEAKER_02]: you wouldn't see the New York Times of the Wall Street Journal trying to get bullied like

[00:28:00] [SPEAKER_02]: Twitter's trying to get bullied right now but I'm going to be interested if as the UAW is starting

[00:28:05] [SPEAKER_02]: to talk about the Tesla plants the BMW plants the Hyundai plants the Volkswagen plants Toyota

[00:28:14] [SPEAKER_02]: Nissan all that have these plants throughout the southeast that are not unionized

[00:28:18] [SPEAKER_02]: that may be I think a tougher battle especially when you've got a guy like a you know Elon Musk who's

[00:28:25] [SPEAKER_02]: probably got a strategy for this at some level already yeah I think it's as I read that article

[00:28:32] [SPEAKER_03]: Kevin and yeah I did see Elon's and I think later we're going to talk about such that Medella

[00:28:39] [SPEAKER_03]: and maybe an article there so more that's going on to be too much more emphasis on the way to lead right

[00:28:47] [SPEAKER_03]: but you know I think as I read that article and the interesting thing to me was about

[00:28:54] [SPEAKER_03]: after the big three settled that the other non-union manufacturers proactively

[00:29:03] [SPEAKER_03]: right so really the union is you know is driving you know behavior with the non-union manufacturers

[00:29:17] [SPEAKER_03]: but you know so I think these other manufacturers are taking the lead from

[00:29:24] [SPEAKER_03]: they are understanding the dynamics but not having a lot of the other stuff that goes along with being a union

[00:29:30] [SPEAKER_02]: of the manufacturer so yeah it's interesting what what what intrigued me and will close out on

[00:29:36] [SPEAKER_02]: this fairly quick and move on there's a lot of other good stuff to talk about today but

[00:29:39] [SPEAKER_02]: it just was intriguing to me out of this article it talked about you know one the war chest that the

[00:29:45] [SPEAKER_02]: WW has but how other unions help each other with funds when they want to go do something like this

[00:29:52] [SPEAKER_02]: and I'll just tell a kind of a quick anecdote that goes with this my my father listens closely every week

[00:29:59] [SPEAKER_02]: and the ill laugh at this so my wife and I've been married almost 20 years

[00:30:05] [SPEAKER_02]: and my father-in-law is a retired iron worker my mother is a retired hospital administrator

[00:30:14] [SPEAKER_02]: they're in the same union the last year before mom retired the iron workers came into the hospital

[00:30:22] [SPEAKER_02]: to Oregon because the nurses were organized in a different union they came into

[00:30:27] [SPEAKER_02]: organized and successfully organized the administrators so here's my five foot tall right off

[00:30:34] [SPEAKER_02]: the boat from Germany strong accent wonderful mother who was hot in the retirees a hospital administrator

[00:30:40] [SPEAKER_02]: meeting my now father-in-law for the first time laughing about them being in the same union

[00:30:46] [SPEAKER_02]: and my father-in-law was the guy that hung off the side of the 40 story building doing the iron

[00:30:50] [SPEAKER_02]: work right it's pretty amusing how these these things happen so I just love that kind of story

[00:30:56] [SPEAKER_02]: because it's unique to see this this organizing that they do whether you like it or not so Tom let's jump ahead what's next

[00:31:04] [SPEAKER_01]: well we have Amazon here now the top delivery business in the U.S.

[00:31:09] [SPEAKER_01]: you know I was kind of wondering about that though is is it kind of a false statistic in

[00:31:14] [SPEAKER_01]: a sense that they cannibalized a bunch of business from UPS and FedEx so is there business

[00:31:19] [SPEAKER_01]: was growing the UPS and FedEx business was dropping kind of double dipping on all of that but

[00:31:24] [SPEAKER_01]: still pretty impressive about I didn't realize that Amazon was so so you know widespread and so

[00:31:33] [SPEAKER_02]: prolific in the delivery business well answer part of your question

[00:31:38] [SPEAKER_02]: and then Paul can give his take on this to there's a few pieces of this I wanted to discuss

[00:31:44] [SPEAKER_02]: briefly this morning one I think the answer to your question is yes and yes but it's I don't think

[00:31:50] [SPEAKER_02]: this statistic is false per se that was not false it just look right but I think what they've

[00:31:58] [SPEAKER_02]: looked at right and and I wish I would have looked this up because I saw the number recent and I was

[00:32:03] [SPEAKER_02]: downed the size of their air of Amazon's air fleet right I think they just call it Amazon air

[00:32:08] [SPEAKER_02]: and it's not insignificant number and what they've basically done is and this is my big takeaway

[00:32:15] [SPEAKER_02]: from the whole article and I'll throw this out there and you guys can kind of share your thoughts

[00:32:19] [SPEAKER_02]: in a Paul you mentioned earlier that some thoughts on this but look the end of the day we're here

[00:32:24] [SPEAKER_02]: we're here to serve wholesale distribution manufacturing it's what we do with our company

[00:32:28] [SPEAKER_02]: why we're here with the podcast there are a lot of people that I talk to on a regular basis

[00:32:36] [SPEAKER_02]: who are looking at e-commerce only from a standpoint of let's use an electronic means for my

[00:32:42] [SPEAKER_02]: customers to order for me and they're the last thing that they're whatever be willing to do is

[00:32:49] [SPEAKER_02]: put their products on Amazon because Amazon's the bad guy because Amazon when they started Amazon

[00:32:55] [SPEAKER_02]: supply no Amazon business was very straightforward that they were going after Rangers electronic business

[00:33:01] [SPEAKER_02]: so we have all these people out there many people in you know the trade associations you're involved

[00:33:07] [SPEAKER_02]: with in buying groups are super concerned about this I look at this is you know you should know the

[00:33:13] [SPEAKER_02]: devil that you are looking at very closely because this is one more factor of the impact that Amazon

[00:33:21] [SPEAKER_02]: is having on the economy and whether it's cannibalizing stuff because FedEx said we're not

[00:33:27] [SPEAKER_02]: doing business with you anymore because we you you you you you're driven the prices down too much

[00:33:31] [SPEAKER_02]: Amazon said good we'll go buy more trucks than you have because they have the money

[00:33:36] [SPEAKER_02]: and this is a place in my opinion where we should be looking at a findman business I should be looking

[00:33:42] [SPEAKER_02]: at one clearly understanding what they're doing and where they're going because it could be a

[00:33:47] [SPEAKER_02]: very very short term time when you have a net representative from Amazon come and I'll even say

[00:33:54] [SPEAKER_02]: Paul to your logistics team that says here's my rates versus UPS in FedEx and Amazon is going

[00:34:03] [SPEAKER_02]: to find we're going to talking in you know in a few minutes about other things that they're doing

[00:34:07] [SPEAKER_02]: on the technology side one it's critical that if I'm in business I understand their business

[00:34:13] [SPEAKER_02]: model and what they're doing and two is it's probably time to more embrace than try and fight

[00:34:19] [SPEAKER_02]: because it's not a battle you'll win doesn't mean that they're going to squash anybody or put

[00:34:25] [SPEAKER_02]: a distribution company out of business but understanding how to work with them is probably

[00:34:29] [SPEAKER_03]: in people's best interest yes I agree and I take it off a couple of a couple of points there

[00:34:39] [SPEAKER_03]: as I think through what you just said and as they you know as they shifted business from FedEx

[00:34:45] [SPEAKER_03]: and UPS my guess is like everything they figured out that they could do it better and more efficiently

[00:34:50] [SPEAKER_03]: exactly what they do they reduce 27,000 people they were able to cut the every times improve

[00:34:55] [SPEAKER_03]: inventory management and improve search results for customers so you know reduced cost

[00:35:02] [SPEAKER_03]: created a better product and and part of that was changing their structure right I think I

[00:35:07] [SPEAKER_03]: moved to these regional hubs you know there's regional hubs is more focused so I mean I think that's

[00:35:17] [SPEAKER_03]: that's a big deal I view I view Amazon not as a competitor to be feared I view Amazon is a

[00:35:26] [SPEAKER_03]: as a behemoth that we need to learn from understand from because they are they are establishing

[00:35:32] [SPEAKER_03]: the benchmark they established I think the benchmark for a customer online experience

[00:35:39] [SPEAKER_03]: that you know hey if we want to play and be to be online we're going to have to have an

[00:35:44] [SPEAKER_03]: experience that mimics or competes with their experience and now I think they're taking that to

[00:35:49] [SPEAKER_03]: supply chain and distribution and we need to be aware and we really react and learn

[00:35:56] [SPEAKER_02]: well I think that's extremely well said I mean that's really my view of all of this is that

[00:36:00] [SPEAKER_02]: they're not going away they're going to continue to innovate and do unique things and I mean it's

[00:36:09] [SPEAKER_02]: not going to surprise me one bit if I'm very soon getting other things delivered by Amazon

[00:36:15] [SPEAKER_02]: and what I bought and we phrase that what Mrs Mrs Brown bought from Amazon is going to be other

[00:36:22] [SPEAKER_02]: things are going to become and I just think they're going to continue to drive what we see in this

[00:36:28] [SPEAKER_03]: supply chain so on the last comment I think on this is just it's a constant reminder that you know

[00:36:35] [SPEAKER_03]: we as distributors need to you know continue to refine our value proposition every day

[00:36:43] [SPEAKER_02]: perfectly said right we need to understand and watch and so forth as well with us so

[00:36:48] [SPEAKER_02]: very comments here from Tyler Blankenship I think Tyler's with us for the first time we appreciate

[00:36:52] [SPEAKER_02]: you being with us talking about fast on all's partnership with Amazon which is great so we're going

[00:36:58] [SPEAKER_02]: to see this continuing to move so we need to kind of move along as well next article we're talking

[00:37:03] [SPEAKER_02]: about we talked about just in fact we didn't have a show last week because of the holiday

[00:37:08] [SPEAKER_02]: week before we talked about Henry Shining the large medical distributor one of the biggest

[00:37:13] [SPEAKER_02]: of what they do they were hit by big ransomware issue impacted their quarterly earnings results

[00:37:19] [SPEAKER_02]: they had to go back to the how to go back to their shareholders and re-reforced cast earnings

[00:37:29] [SPEAKER_02]: and so forth big deal well what we're seeing now is they got hit by the exact same group again

[00:37:34] [SPEAKER_02]: and it kind of looks like they maybe started trying to play hardball with this group that had

[00:37:40] [SPEAKER_02]: access to their system and they talked about having stolen 35 terabytes worth of sensitive data

[00:37:48] [SPEAKER_02]: that would publicly release on a daily basis astounding right and so boom two weeks later

[00:37:56] [SPEAKER_02]: we're in the same boat we are they were trying to get their e-commerce platform relaunched

[00:38:01] [SPEAKER_01]: had hit pause on that danger stuff crazy yeah it's it's dangerous and crazy but I think with this

[00:38:13] [SPEAKER_01]: in cyber security right is it's a multi-dimensional problem it's not just oh do I have my

[00:38:20] [SPEAKER_01]: data secure or do I have my privacy together or whatever it's a multi-dimensional problem that

[00:38:26] [SPEAKER_01]: you know there's different ways that these groups can go in and basically recap it

[00:38:31] [SPEAKER_01]: yeah and with the AI piece more and more entrenched it's going to get worse right think about

[00:38:39] [SPEAKER_01]: injecting information into your AI framework so now your AI is now polluted essentially from I mean

[00:38:45] [SPEAKER_01]: I'm not trying to put ideas anybody's head but these are the types of things that we have to look at

[00:38:49] [SPEAKER_01]: as we look forward with the cyber security I do think technologically there's a lot of foundational

[00:38:55] [SPEAKER_01]: things that you can do across the board to handle a lot of this so just architecturally you know

[00:39:01] [SPEAKER_01]: that can handle a lot of these things but yeah you have to look at it from a multi-dimensional

[00:39:05] [SPEAKER_01]: perspective and clearly this group kind of found one door and then went in another door so

[00:39:11] [SPEAKER_02]: right and and was don't don't test us because we we're here and we're back in I

[00:39:20] [SPEAKER_02]: I'm going to be very good I'm going to make a statement but all have to you know cut out some names but

[00:39:27] [SPEAKER_02]: a good personal friend of mine with this on yesterday he works in a very high level globally

[00:39:35] [SPEAKER_02]: in cyber security for a company that every one of us have involved with on a regular basis and is

[00:39:43] [SPEAKER_02]: a globally a household name and Chinese government got into their system and this was five years

[00:39:52] [SPEAKER_02]: ago probably and he has a whole team on his global cybersecurity team that all their role is

[00:39:59] [SPEAKER_02]: is to keep them over here and make sure that they can't get past these areas that the company

[00:40:06] [SPEAKER_02]: doesn't use anymore I guess but not let them get out of there and and then watch what they're

[00:40:11] [SPEAKER_02]: trying to do in that little area they're in pretty astounding when you've got a

[00:40:16] [SPEAKER_02]: company which I could say where they are wouldn't be reasonable for me to do that but pretty astounding

[00:40:20] [SPEAKER_02]: that that's a company of that size has those issues so it just the point that we're talking

[00:40:26] [SPEAKER_02]: about here right as we talk about distribution and manufacturers is and and I'll make this coming

[00:40:31] [SPEAKER_02]: again briefly as we go when we talked about this a few weeks ago I was at an event in August I

[00:40:37] [SPEAKER_02]: think it was talking with a small manufacturer I'm going to guess 20 $30 million a year

[00:40:46] [SPEAKER_02]: manufacturer and they had a hit like this as well so everybody's you know vulnerable at some

[00:40:52] [SPEAKER_02]: level and I think we are going to all need to start working on a focus for tighter security

[00:40:58] [SPEAKER_02]: as we move on from this will may be a good comment about you're getting to the cloud is a good

[00:41:04] [SPEAKER_02]: first step on some of this so I'll try to treat me thanks for being with us today trying to

[00:41:08] [SPEAKER_02]: sing and seeing back at bad actors moving into small companies who are less focused so

[00:41:12] [SPEAKER_02]: you kind of recapped what I was just was mentioning so thank you for that trend so

[00:41:17] [SPEAKER_03]: yeah it's it's it's it's time to your point the threat actors are they're getting you know more

[00:41:24] [SPEAKER_03]: sophisticated and the technology is getting more sophisticated so it's kind of a multi-faceted

[00:41:30] [SPEAKER_03]: defense system that you have to you know put in the place and you know our our view from a risk

[00:41:36] [SPEAKER_03]: perspective at the board level is really it's not if it's going to happen it's when so if you

[00:41:41] [SPEAKER_03]: have that mentality then you are constantly you know making sure that you are keeping up with your

[00:41:48] [SPEAKER_03]: with your defenses and you know in training and you know we dedicate a lot of resources to it

[00:41:54] [SPEAKER_03]: and continue to but it's the AI item that you brought up is it would be in the various way to kind

[00:42:05] [SPEAKER_02]: get into the back door right yeah it's interesting and we have to kind of look at this is um

[00:42:13] [SPEAKER_02]: it's an industry right that's much of it is in Eastern Europe it's an industry and when you have

[00:42:21] [SPEAKER_02]: an industry that gets started you can kind of think about this right if you've got a handful of

[00:42:26] [SPEAKER_02]: guys that are hackers and programmers that are working with a large group that's going after

[00:42:31] [SPEAKER_02]: that major companies of the world it only makes sense that a couple of these guys are going to

[00:42:36] [SPEAKER_02]: peel off and go well I can use this tool on my own against a small company right so I'll go

[00:42:42] [SPEAKER_02]: attack that I don't need three million dollars I need a hundred people to give me a hundred thousand

[00:42:47] [SPEAKER_02]: dollars right and that's I think what we're probably starting to see here a little bit so from a time

[00:42:53] [SPEAKER_02]: standpoint let's jump ahead just another comment though here from Trent to Paul you've got quite

[00:42:59] [SPEAKER_02]: a fan club out there so we're happy to have some of your your friends here Trent's shout out

[00:43:06] [SPEAKER_02]: from Fargo North Dakota so I'm guessing it's cold in Fargo Trent good to see you want thanks for

[00:43:13] [SPEAKER_03]: joining Trent and I worked together many years ago and I still follow his career up there in Fargo now

[00:43:22] [SPEAKER_02]: well I'll say something a little self-serving here is you're with us most weeks whether you're on

[00:43:27] [SPEAKER_02]: the broadcast with us or just listening in so people want to keep up with Paul you can find him

[00:43:33] [SPEAKER_02]: Friday mornings at nine o'clock Pacific on LinkedIn live or however you may want to listen so

[00:43:39] [SPEAKER_02]: hope you have you back with us again Trent and everybody else enjoying this today Tom I want

[00:43:43] [SPEAKER_02]: you to dive in though first on this next article about Amazon launching it's called Q their business

[00:43:49] [SPEAKER_02]: chat pot they're starting off with this saying their answer to chat GPT I know you've got a lot of thoughts

[00:43:57] [SPEAKER_02]: on this you are a resident AI expert so take it away yeah I'm not sure it's an answer to chat

[00:44:04] [SPEAKER_01]: GPT exactly but what it is is they have built their own chat bot that works with certain

[00:44:12] [SPEAKER_01]: AWS applications for supply chain and so forth I think what's there's a couple things that jump

[00:44:18] [SPEAKER_01]: out at this first of all it's to a large degree being driven by your first party data right the

[00:44:25] [SPEAKER_01]: data that you have in your organization versus what most people know chat GPT with which is using

[00:44:32] [SPEAKER_01]: it data off the internet and scraped off the web and so forth so this is built around their own

[00:44:38] [SPEAKER_01]: their own data and they talk about being able to talk and come you know link into different

[00:44:43] [SPEAKER_01]: applications that you have in your business and so forth the other thing that I find

[00:44:51] [SPEAKER_01]: and I've seen it wasn't this article but it was another article I read about this too

[00:44:56] [SPEAKER_01]: is this trend about talking with your data right and I know Kevin you know me I constantly

[00:45:03] [SPEAKER_01]: in beating the drum about this because I strongly believe no come on is that what this is allowing

[00:45:10] [SPEAKER_01]: somebody to do is to go in and have a conversation about their data and with their data and when you

[00:45:18] [SPEAKER_01]: think about traditional business intelligence right what do you have you know you basically have a

[00:45:23] [SPEAKER_01]: database you have reports that run and then you have dashboards you can drill in and all of that stuff

[00:45:27] [SPEAKER_01]: but you're not having a conversation with that data and be able to navigate based around where

[00:45:32] [SPEAKER_01]: that conversation takes you and to me this is a first example of that of the fact that we are going

[00:45:39] [SPEAKER_01]: to see in the next two to three years or maybe even faster is it the way that we interact with

[00:45:45] [SPEAKER_01]: our data and our organization is very different than what we have done historically and we're

[00:45:51] [SPEAKER_01]: going to have a lot more and I'm going to say one more piece here because I don't think it's

[00:45:55] [SPEAKER_01]: and this is what's different about generative AI even against maybe more traditional AI where

[00:45:59] [SPEAKER_01]: you've got you know machine learning and so forth a lot of this when you ask and you have a

[00:46:04] [SPEAKER_01]: conversation with the data the AI is on the fly determining the analysis that it needs to make

[00:46:11] [SPEAKER_01]: based on the question that you answer it right so rather than having fixed sets of questions or

[00:46:17] [SPEAKER_01]: fixed sets of fixed sets of analysis that it's doing if I ask well you know how is it going with my

[00:46:25] [SPEAKER_01]: supply chain and China or whatever it is the generative AI is on the fly taking your request

[00:46:31] [SPEAKER_01]: and then figuring out the correct analysis dynamically at that point in time to provide that data back

[00:46:38] [SPEAKER_01]: that's very different than having a static set of machine learning and so forth going forward

[00:46:43] [SPEAKER_01]: which is exciting to me as well because we work a lot with as you know Kevin with a lot of first

[00:46:48] [SPEAKER_01]: party data and organizations so yeah this is a it's only available if you're using certain

[00:46:55] [SPEAKER_01]: Amazon products this isn't a generally released you know product or whatever but to me it shows

[00:47:00] [SPEAKER_01]: yet another example of where this is all ahead and all the here you're taken on it yeah just just

[00:47:07] [SPEAKER_03]: quick comments I don't know that I can add much to what you had to say there Tom but the one

[00:47:13] [SPEAKER_03]: point that I highlighted was the statement about the visualization of trade-offs between different

[00:47:21] [SPEAKER_03]: possible scenarios in supply in the supply chain and as I'm just thinking about that that is being

[00:47:27] [SPEAKER_03]: generated by AI right that output and it's just kind of that blew my mind but one other thing that

[00:47:35] [SPEAKER_03]: just comment around this is you know you look at the data that Amazon has right so it's he who has

[00:47:42] [SPEAKER_03]: the data or you know she who has the data is is going to be able to produce the most you know

[00:47:50] [SPEAKER_02]: generative AI right and so yeah that's a great point to go with us and you know the article talked

[00:47:59] [SPEAKER_02]: about and use the term a data lake so you know and this is part of Amazon web services right let's

[00:48:05] [SPEAKER_02]: take a cut back at this this is not the group of people that are sending your socks to your house

[00:48:11] [SPEAKER_02]: this is their their big data warehouses that they have around the world it's the side of the company

[00:48:17] [SPEAKER_02]: that first allowed them to see some profits and so they use the term here data lake and Tom I'll

[00:48:24] [SPEAKER_02]: correct anything that I'm I'm Aaron here but you know we had our that leads far we had our

[00:48:31] [SPEAKER_02]: two days of 2024 planning earlier in the week and part of that was the one of our main architects and

[00:48:37] [SPEAKER_02]: developers that work us on Tom's team and Tom sat down and kind of walked me through what's coming

[00:48:45] [SPEAKER_02]: product wise and and you know the idea coming if you think about we always reference this back to

[00:48:49] [SPEAKER_02]: wholesale distribution so you're going to start hearing a lot more about this term data lake

[00:48:54] [SPEAKER_02]: we kind of heard about data warehouses a little bit more in the past but you know imagine this place

[00:48:59] [SPEAKER_02]: where we could be where we take every PDF in our company that we've ever had every spreadsheet

[00:49:04] [SPEAKER_02]: that we've ever had we connect our ERP our marketing automation our e-commerce data we connect that

[00:49:10] [SPEAKER_02]: into a data lakes or live data use right and then we put every supplier spec sheet every supplier

[00:49:18] [SPEAKER_02]: catalog if you choose every competitor as data that you have you put that into this data lake

[00:49:24] [SPEAKER_02]: and then you use a GPT like solution and I got to see some pretty cool early stage visualizations

[00:49:31] [SPEAKER_02]: of that are in the week. It got me all excited and it gets me talking like the computer geek for

[00:49:37] [SPEAKER_02]: moment here is the idea if you're a wholesale distributor or manufacturer in this setting that just says

[00:49:43] [SPEAKER_02]: hey within an existing system i.e. like a AI enabled CRM solution to just have this conversation

[00:49:51] [SPEAKER_02]: with all of my data that has ever been pretty so we use it a term one of the guys that works

[00:49:57] [SPEAKER_02]: in our company his father works for a large national electrical distributor that everyone would

[00:50:03] [SPEAKER_02]: probably many here would know the name and is that's names Greg and Greg's been around forever

[00:50:09] [SPEAKER_02]: so he's got Greg's got people from branches three states away calling Greg for to be the expert

[00:50:14] [SPEAKER_02]: well we don't need Greg to be the expert to the level right that tribal knowledge every bit

[00:50:19] [SPEAKER_02]: of tribal knowledge that have ever been there is now in this data lake and the person that's been

[00:50:24] [SPEAKER_02]: in the company three weeks can get that tribal knowledge of the person from 30 years right and that's

[00:50:31] [SPEAKER_02]: where we're moving down this road I saw yes I got see some great examples of it earlier in the

[00:50:36] [SPEAKER_02]: week but this data lake will now be available to us through what we like to term as an incumbent

[00:50:40] [SPEAKER_02]: type product right we don't have to go figure out and we're going to see this for the Microsoft

[00:50:45] [SPEAKER_02]: products and other products right incumbent solutions that we already use will introduce our

[00:50:52] [SPEAKER_02]: entree as an organization we don't have to go figure out do I need to go buy from this startup

[00:50:58] [SPEAKER_02]: or that startup that's only been a business for three weeks we can get access to this from

[00:51:03] [SPEAKER_01]: incumbent products so that's what excites me so I'm trying to make it better right did okay um

[00:51:08] [SPEAKER_01]: and just you know I know we need to move right on here but the I guess the big takeaway here is yes

[00:51:15] [SPEAKER_01]: if you have data if you can aggregate if you if you can organize your data then really all you

[00:51:22] [SPEAKER_01]: really need to do is determine the use cases that you want to accomplish with that data

[00:51:26] [SPEAKER_01]: and then determine okay what's the experience so I'm going to provide to my users

[00:51:30] [SPEAKER_01]: to actually leverage those use cases it's not having to figure out well how am I going to build a

[00:51:35] [SPEAKER_01]: a machine learning model for this and how am I going to build a machine learning model for that right

[00:51:40] [SPEAKER_01]: if you just get your data organized well the AI will take care of that as you go forward

[00:51:44] [SPEAKER_01]: and now it's just a function of use cases and experience so very different mindset in terms of how we

[00:51:49] [SPEAKER_01]: go about this has we go forward anyway don't get me started let's not let's do this there's the

[00:51:56] [SPEAKER_02]: last article that we're going to talk about today is our good read that we do every week

[00:51:59] [SPEAKER_02]: but every week also just as a quick reminder tumble stop there at the industry scuttled

[00:52:05] [SPEAKER_02]: but just two quick thing or a couple quick things there but the um quick reminder if you're

[00:52:11] [SPEAKER_02]: listening on a podcast we're looking at a newsletter that comes out every week I always

[00:52:16] [SPEAKER_02]: trying to mention this two or three times um because we don't want to throw a curve ball of

[00:52:20] [SPEAKER_02]: those that are listening and not seeing us then we got three handsome faces here today but

[00:52:24] [SPEAKER_02]: if you're not able to see us we're looking at a newsletter it's called around the horn and wholesale

[00:52:28] [SPEAKER_02]: distribution if you'd like to get a copy of that just reach out to us at hello at leadsmartek.com

[00:52:34] [SPEAKER_02]: or our website for the podcast is around the horn dot uh excuse me around the horn pod.com

[00:52:41] [SPEAKER_02]: and that's all information is there so industry scuttled about just a couple quick things

[00:52:46] [SPEAKER_02]: if you're in the safety industry uh or the industrial side of things you're probably familiar with a

[00:52:54] [SPEAKER_02]: field and went uh ride PPE or going to there uh founder who found the company with his father

[00:53:00] [SPEAKER_02]: Tom Votels retiring Tom has been one of those guys it is just had his hand and not just

[00:53:06] [SPEAKER_02]: growing his company but growing an industry in a category tons of volunteer work so hats off

[00:53:11] [SPEAKER_02]: to Tom is a great guy um other article there is a Forbes article about distributor rankings

[00:53:17] [SPEAKER_02]: good read Paul I know you had a quick comment on this uh Schneider electric pledging a million

[00:53:23] [SPEAKER_02]: is one of the articles we posted here as well to the National Association Electrical Distributors

[00:53:29] [SPEAKER_02]: you want to comment on that one briefly before we move on to our last article. You bet thanks and

[00:53:33] [SPEAKER_03]: I'll say Tom I don't know Tom but Tom's from St Paul so it's not gonna be a great guy so

[00:53:39] [SPEAKER_03]: congratulations on your retirement and yeah thanks on the Schneider piece um you're I am active on

[00:53:46] [SPEAKER_03]: active with an AD and and just was really um energized to see Schneider's pledge of a million dollars

[00:53:53] [SPEAKER_03]: week we've had several other manufacturers uh makes a good game pledges as well as distributors to the

[00:53:59] [SPEAKER_03]: next level now campaign which is really a campaign that an AD is undertaken to you know really

[00:54:05] [SPEAKER_03]: focus on technology change and and driving the digital transformation of the distribution channel so

[00:54:11] [SPEAKER_03]: thank you Schneider and and thank you any AD for your leadership in that space. Good last little piece

[00:54:17] [SPEAKER_02]: on this we'll go to our last article before we wrap up today but I didn't mention is Irgridine you

[00:54:22] [SPEAKER_02]: might know this Irgridine is now a division Paul of Klein tool yep so that's kind of next time

[00:54:28] [SPEAKER_02]: uh I come to the Twin Cities you Tom and I will get together all by the first round and then I'm

[00:54:34] [SPEAKER_02]: going to leave it to you guys after that but uh we'll get maybe that'd be fun to fun group to get together

[00:54:39] [SPEAKER_02]: so listen there's a cool article we we have a feature in the newsletter every week it's called

[00:54:44] [SPEAKER_02]: a good read it's usually about personal development or leadership I just love this article I think

[00:54:51] [SPEAKER_02]: you liked it as well Paul it was about Sotkin and Didalah the CEO of Microsoft Microsoft quickly

[00:54:57] [SPEAKER_02]: to tell the story and I'm in it we only have about three or four minutes left today but I want

[00:55:01] [SPEAKER_02]: to quickly share this opening eye the company behind chat GPT if you don't know about it I posted a

[00:55:07] [SPEAKER_02]: couple of live videos last week or week before when it was all going on big board eruption board

[00:55:16] [SPEAKER_02]: was trying to push the CEO out Microsoft came in look to be kind of saving the day but there's a

[00:55:23] [SPEAKER_02]: big piece that happened in you know they use the term oftentimes emotional intelligence but I'm

[00:55:29] [SPEAKER_02]: going to just call a leadership here about how he handled all of this so Paul I know you had

[00:55:34] [SPEAKER_02]: some thoughts I want to hear what you're thinking is as you know I don't lead a thousand person

[00:55:38] [SPEAKER_02]: organization like you do so I love your thoughts on all this yeah thanks Kevin as I read this article

[00:55:44] [SPEAKER_03]: and you know for anybody that was following this in the news it was he was a soap opera

[00:55:48] [SPEAKER_03]: yeah as uh uh uh uh Altman was kind of booted out and and then uh uh it appeared that uh Microsoft was

[00:55:55] [SPEAKER_03]: going to hire him so um after all of that and after things settled out and in the board rehired

[00:56:01] [SPEAKER_03]: Altman back to uh open AI um such a sense this email that your text I think it was uh the

[00:56:09] [SPEAKER_03]: tweet in the article yeah and um it it it was just amazing to me as I read it and and when you

[00:56:16] [SPEAKER_03]: talk about lessons in leadership just how comb focused on the mission not getting caught up with all

[00:56:23] [SPEAKER_03]: of the distractions so he's really commending the Microsoft team on not letting all of this hysteria

[00:56:29] [SPEAKER_03]: around open AI take them away from their focus and their mission um which really speaks I think

[00:56:36] [SPEAKER_03]: speaks to Sachi but also speaks to the culture that he's created at Microsoft exactly that kind

[00:56:42] [SPEAKER_02]: of board self-help well I love that how you describe that and it's I think it's so important

[00:56:47] [SPEAKER_02]: to think about people right now there was a business factor that went with this too because they had

[00:56:53] [SPEAKER_02]: huge stock bump through all of this uh never actually hired uh Sam Altman had the plan and

[00:57:00] [SPEAKER_02]: place to do it but he also offered a job to the 700 people that were there that quickly showed

[00:57:06] [SPEAKER_02]: how supportive they were and showed that Microsoft would be a great place for them all to come so

[00:57:11] [SPEAKER_02]: if you get a chance this is an ink magazine we need to kind of wrap up but a great thing that I just

[00:57:17] [SPEAKER_02]: saw from a leadership standpoint everything that he did over the course of these days was to put the

[00:57:23] [SPEAKER_02]: employees and people first and it turned out with great results for them as well so um listen that's

[00:57:30] [SPEAKER_02]: we kind of need to wrap up here uh again if you don't get the newsletter and you'd like to please

[00:57:35] [SPEAKER_02]: let us know all of these articles are there we're here every Friday morning on LinkedIn live

[00:57:41] [SPEAKER_02]: Facebook live YouTube live as well as our podcast that will hit this after usually hits mid-after

[00:57:48] [SPEAKER_02]: noon on all the popular podcast formats lastly Paul any good exciting plans for the weekend

[00:57:54] [SPEAKER_02]: I'm actually going to do some plumbing. Do you know do you know where to get the equipment in the

[00:58:01] [SPEAKER_02]: supplies? I do you got to see you got to source that's great that's great good so thank you so much

[00:58:07] [SPEAKER_02]: my friend for being with us. Yeah very it's awesome thank you Paul. One one question and and

[00:58:14] [SPEAKER_03]: in favor will you come back in the new year? Sure I would love to this uh this wasn't as painful

[00:58:20] [SPEAKER_03]: as you made it out to be. I hope I didn't do that. It was great um and really appreciate

[00:58:27] [SPEAKER_02]: the opportunity. That's great well we'll wish everybody a great weekend we appreciate you being with us

[00:58:32] [SPEAKER_02]: hope you can join us those of you that were new I haven't been with us before every Friday morning

[00:58:38] [SPEAKER_02]: LinkedIn live the Leedswar Technology page YouTube live Facebook live as well have a great

[00:58:43] [SPEAKER_02]: good weekend do good things be kind be safe we'll see you next week thanks everybody

[00:58:54] [SPEAKER_00]: We hope you enjoyed today's episode and our guests each week we try our best to dig into the

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