Around the Horn - Episode #16

Foreign everybody. Or I guess afternoon, depending upon where you are now. Episode number 16, around the Horn, November 4th. Kevin, you have true dedication to a round horn. So, yeah, Kevin is, Kevin is a bit under the weather, but here he is with some stuff on his face, but alive and well.

I'm alive. So alive.

Okay, okay.

Only, only comment I can make to go with that. Tom is in one guy's opinion, keep wearing your masks when your big, big groups did. Traveled fourth week in a row last week and came home with COVID So two and a half years. I know you've been working just as hard as I have, diligently wearing the mask, being cautious and finally hammered me. But I would have given anything because I think I told you earlier in the week to be one of those people that just had that. Oh yeah, it felt like a little head cold for, you know, 24 hours and I was fine, but it's kind of clobbered me this week. So anyways, we're here. I'll be well soon and cautious moving forward, so. But yeah, this is where my wife likes it because the gray shows. That's not in my head, it shows in my beard.

So.

So we'll do that.

Okay.

All right, then I can keep up with your gray and your beard. So anyways, yeah, I don't know if I could catch up with that. Okay, so the focus on today. Before we dive right in, let's kind of share the weekly updates that we do. Who we are, why we're here, why we do this. I'll do that real quick. So, Kevin Brown, Tom Burton Lead Smart Technologies. We have produced a purpose built CRM and customer intelligence system built specifically for people that work through wholesale distribution. What we've done is over the last was this. 16. Tom, is that right? Yeah, there it is.

Yeah, yeah.

So the last 16 weeks we've put out a weekly email newsletter that comes out each week. It looks just like what's on your screen. If you don't get that, just pop us a little note in the comments here. Or you could email us@helloadsmartech.com and we'll make sure to add you to that list. But what we've done is because we work with building material folks, industrial safety products, plumbing, pipe valve and fitting, electrical distributors and manufacturers. We've brought all kinds of data together about what's going on in wholesale distribution. We talk each week about a few points related to the general economy, technology, sometimes the stock market and supply chains. And then we talk about some industry happenings as well, so that's what. We do this each week. We're glad to have you if this is the first time. We do this every Friday, so we'll kind of jump right in. The other thing is you can message us here is if you're not getting the email newsletter or direct message us through our LinkedIn page on our lead smart technology. This broadcast be available recorded on both YouTube, Facebook Live as well as LinkedIn for future reference. So did I get all that documentation done properly?

Well done. See your. Your mind working at full force?

Well, I don't think so. I got that fog going on, so that's about all I'm done. So I'm going to rely on you the rest of the day.

Okay. Okay. All right. Looks like. Well, Tom will make sure. Tom Harvick says he's getting his letter. We'll make sure he gets that.

Good, good, good to have you with us, Tom. And so real quick, let's jump into kind of these, this US Manufacturers pumped up about supply chain reshoring trend. This kind of ties into the second article that's there. We can talk about a little bit. But I thought this was kind of interesting because, you know, we've been hearing about the, the concept of reshoring or, or near shoring, as they often say, as well, of, of jobs and work for a number of years. But it looks like between the pandemic supply chain issues and the war in the Ukraine, we're seeing that really ramping up. So it's kind of neat to see that that's. That's happening more.

Yeah, it's, it's. I mean, obviously that's not something just happens overnight, but it clearly looks like there is a trend occurring. It'll be interesting to see if that trend continues to grow. But yeah, I mean, I think we learned the hard way, right. The logistics of shipping stuff from halfway around the world and what that can really do to mess things up, especially when the place halfway around the world is still going through COVID lockdowns and other things along those lines.

Well, there's been a lot. I think that you're right on track with that. There's been a lot of factors that have kind of dealt with, I'd say, kind of piled under that over the last few years, too. And part of it is, you know, in many parts of Asia, specifically China, there's finally, I don't want to call it a middle class, and I'm not an expert on this, but, you know, I've having done some work over A number of years ago in the consumer electronics world we really saw this a lot from a manufacturing standpoint is wages are going up in factories. Right. They have this, this phenomena every year in China and of Chinese New Year's that happens, you know, in February. And so these folks all leave these factories, they go back, they may take a three day train ride to get back to the village they were in and they don't show back up to work if their cousin or sister or neighbor has a job at another factory in a different province even that pays a little more. And so we're starting to see this uptick in wages throughout China to keep the supply chain moving even with all the other fact there. So that's, I think what kind of spurred this a little bit over the last few years. And then Mexico and other parts of Latin America have started to rise to the occasion as well as other countries that are closer to us. And now we're just kind of seeing this shift starting to happen. I think the article referenced, that is references that about 350,000 jobs will be created just this year in 2022 here in the US of reshoring and near shrink. So it's going to be interesting how that impacts supply chain and if we see that continue to happen.

So let's move on.

Yeah, well, the next article there that the clock is running out on jit, I think what we should have added to that is how it relates to cloud computing because this ties exactly back to the whole concept of that reshoring. Right. Because what's happening with supply chain issues, including. Right. You know, you know, one of my big passions is, is, is wine. And so I get a newsletter every day about the business of wine and glass. Prices are going through the roof for any type of glass commodity, including bottles and wine glasses. And I wasn't aware of this, but the vast majority of all the glass that's made in the world is made in, in and around the uk, the Ukraine, so, and in parts of Europe that are nearby to there. And with the not just supply chain issues we have out there, but a war going on there and the energy issue that we have that people are so concerned about because of what Russia may or may not do with fuel and, and the energy factors of what may be happening this winter and this coming year and onwards based upon Russia controlling so much of the energy coming into those other countries that those factories are shutting down or cutting way back. And so we've got all of these things happening right now within the supply chain world Based upon global economy pandemic and now this, this war in the Ukraine. And it's really impacted. So this article about the clocks running out on just in time inventories, it makes a lot of sense. Core of that and the crux of it is it's tying it to something that we talk about regularly here, which is moving things to the cloud, right? Digital transformation and moving to the cloud. And the core of that article really speaks to the idea of what cloud computing specifically when you have ERP and manufacturing systems that are managing supply chain issues transparently with the factories. Now we have this ability to move away from just in time because we really can see supply chain issues that are going to be managed that way. So this cloud migration that we talked about consistently, that's near and dear to our heart, we're seeing more and more now in manufacturing.

Well, wasn't there a second element to the article as well? That jit, while it sounds really, you know, good, right? Yeah, it not necessarily, you know, it has its own risks. So you know, therefore you're kind of, you know, you're at the effect of whether or not they have, if the, where you're the supplier, the person is providing that for you if that's available. So there's, there's a, there's a consequence of jit and that JIT process isn't working very well.

Well, historically there's always been challenges with it, right, because you're only as good as your weakest link and a supply chain issue. So that's the big, big factor. Now that we see all these compressions on supply chain around the world, we can kind of look back to this and say, okay, well this makes sense. And now we have technology through cloud based technology that has this, you know, kind of transparency that can be added to operations. So pretty good article. If you folks get a chance, take a look at that. Because it could be impacting your business both as a manufacturer and a distributor or wholesaler. So let's kind of bypass the, that article and go to the final one there about factory orders rise. We don't need to spend a lot of time on that. But I was just, you know, you and I were talking before we went live this morning about the stock market and we own some of the same stocks. And you know, I think the market's kind of puttering today and NASDAQ was down. But you know, there's some technology software that are technology companies that are just getting hammered today and have this week that we were talking about earlier. And it's kind of interesting to watch because, you know, we see this doom and gloom, we talk about this, and I pontificate about this personally all the time is I love the wholesale distribution world because it's what powers the country and it's really what powers the world. In fact, just made me think about Dirk Beveridge, you know, who's a longtime speaker and writer and expert within wholesale distribution. Dirk just finished up his We Supply America tour where he goes around the country talking to family owned and privately owned wholesale distribution companies. And, you know, we look and see that there's good things happening in that world while we've got doom and gloom throughout the other parts of the economy. So we can see that, that, you know, factory orders are rising, manufacturing, you know, isn't slowing down to the level that it was expected to. We don't know what's coming next. But it's nice to see you. We've been talking about this for, you know, probably nine months or longer about, you know, slow down in the economy and so forth. So it's good to see that their things are staying kind of steady on the manufacturing side.

Yeah. And you know, there was a jobs report that came out this morning and you know, that's people are still hiring. Right. And there's still, you know, there's still a lot going on, you know, despite everything. Trying to slow things down. Right. Doesn't mean that things won't slow down. And, and maybe there is a necessity to slow things down a bit, you know, to address some of the inflation and other things and concern. But I think overall you're still seeing, you know, a very strong economy and a lot of things happen. Right. For whatever reasons. And I don't, I don't, I don't see any immediate. I don't. I know I. You could definitely see some headwinds, but I still see, I mean, there's just a lot of things happening and you look at, you talk to the customers and people we work with. There's a lot of things going on going into next year as well. So, yeah, I think you're right.

Anyway, you're right on track with that. It just, it's a good feeling. You know what I was going to mention too, Thomas forgot to do this earlier. You know, if you're with us here on LinkedIn this morning or Facebook or YouTube Live, there's an option for comments there. So you have any thoughts on the things that we're discussing here, fire them off. And we'd love to add you into the conversation as we do this but tying back to that whole shift in the economy of some positive things that we can see, you know, if we look down at the industry scuttlebutt section today. Sure works right. Manufacturer of personal protective equipment just announced for the second week in a row a, an acquisition. So Oberon's a long time stalwart company in the personal protective equipment world. They make arc flash and flame resistant clothing and products for electrical and oil and gas workers. That SureWorks acquired this week that was announced yesterday. Applied Industrial, huge distributor increase in sales of 19%. Those are significant numbers. Right. And last week I, I think I've shared what I was with at the in Affiliated Distributors North American meeting for their industrial and industrial safety division and had a chance to talk to Alex Ruggles for a bit from Martin Supply and we had a really, really good chat and they, while we were at the event announced another acquisition that they've recently done. But what's interesting is that's just the acquisitions that we posted. There's five to seven others that have happened in wholesale distribution this week. We just typically only post, you know, three items there. But it's astounding the amount of M and A that's going on out there. So you know, the stock market might be struggling and we hear the doom and gloom, but that's, there's no shortage of dollars being moved around the, the manufacturing world and wholesale distribution world.

Yeah, and I talked about this, you know, M and A process last week a bit. But you know, some of the reasons, whether it's geographical or increasing product lines or whatever, and assuming that the, you know, the M and A process and the companies can come together and consolidate, well, I think that they'll, it'll actually strengthen the industry in a lot of, in a lot of ways because as the companies get better it gives them the opportunity to invest in things like technology and other things that are going to really help that efficiency. So anyway, a lot of it, obviously there's a lot involved in merging two companies together but if it can be done reasonably well, there's a lot of potential upside. Especially just on the economy of scale.

Exactly right. That's great stuff. And I think we're just going to see more of this. So we'll just, we'll keep this going each week. So let's kind of jump back to that discussion here. There it says A big H VAC distributor is on track to generate 2.3 billion in annual digital sales. So that's Wattsco's, I believe in Florida, I think, is where they're headquartered, but huge on the H Vac side of things. But it's kind of astounding as we, you know, we look at that. I was just, I looked at, wrote a couple of things down about this, you know, 2.3 billion in annual digital sales. So that's a commitment that an organization has made to E Commerce. Right. And the reason I wanted to post this week was we talked so often about Omni Channel sales. Right. So that concept of allowing your customer to buy how they want, you can speak to that, maybe even a little bit more. But 32% of the company's total sales, it said, were coming now, coming through E Commerce, represented through e commerce, and 22% growth in that channel category in the third quarter. Pretty astounding.

Yeah, it's interesting and I don't know a lot about Watsco, you probably do, but when I was at Dreamforce a couple of. A few weeks ago, I went to a presentation from Carrier, which is obviously a big air conditioning. And they were seeing this growth as well in their online sales, predominantly with parts and, you know, other, you know, accessories and things like that. And again, they were B2B sales. So they were, you know, being purchased by dealers and distributors that are, that were, you know, needing something for whatever the case may be, for whatever projects, whatever they were doing. So it comes back to the JIT conversation. It was like the, the E Commerce provides a way potentially to get faster, you know, delivery, getting products and things that you need just in time. I don't know if that's what was driving a lot of the sales here with the example we, we had here, but clearly the Omni Channel way of purchasing.

Right.

Is, you know, growing and growing and will continue to grow and by the way, ties into our upcoming webinar that we're going to be doing in a few days here next week.

Yeah, let's finish this up real quick and then let's talk about that because we want to spend some time and introduce people to what's happening with that. I just, I thought it was interesting. The CEO of Watsco said our technology platforms, which are unique to the industry, that facilitated growth in Watsco's market share. So it's interesting they're relying on technology. You know, you, you speak often, you comment in your, in your book about this as well, about buyers changing. Right. It's. We harp on this on an ongoing basis, but I think it, it just keeps popping up consistently with what we're seeing going on in the, in the marketplace is. Buyers are changing. They want to gather information from different places. I mean, I just, you know, you and I, we're old, right? We're, I guess we can even say late 50s now, which is a scary thing to say. But, you know, my wife was wrapped up in some stuff yesterday, not feeling good. I've been down, you know, know, completely sick. She's done a great job taking care of me. I said, you know what? I'm just going to order some food. And I had Chinese food ordered in less than three minutes and at the house in 20 minutes. It's a different world we live in, right? I mean, astounding how quick this place is, but, you know, the place, it's just over in the shopping center down the street, so. And they're quick, but the end of the day, right, is we have things at our fingertips and we can move to get these things done. And so our buyer is that person that took Uber to the movies the other night, right. Bought their car online, order dinner consistently through a mobile app. And they're just a different type of person. And those people acquire information. And so we're seeing that and we, we're seeing this as, you know, as that person now becomes that, that lead buyer within a large B2B organization. They're going to continue to see this. But I think what's key about it, what triggered for me is this their CEO, Mr. Namad, talked about technology platforms and he used the term unique to the industry. And I'm going to guess there's two sides to that. Unique to the industry term that he used probably is. It's very unique in that other people aren't doing some things. But the other side of it is they bought technology that was made for, for their Right. So they didn't just go say, well, we're going to do something with Shopify or Woocommerce or whatever it might be. They said, we're taking a platform, we're going to customize it or something that's already customized for our industry and we're going to drive things from there.

Yeah, no, I mean, clearly they did something that's working and, and continuing to expand it and obviously giving them a competitive advantage. That's right.

So let's talk a little bit, I guess, with the time we have left today about what's coming up next week. I think people might remember we had a few weeks ago, we had Brian Beck with us. Brian's with in Sybia. He's probably one of the leading experts in the country on wholesale distributions, migration into E Commerce. And Tom, I want to let you kind of take this away and kind of talk through it a little bit further. While I've been sick, you've been buttoning this up with with Brian.

Yeah, so we're doing a webinar with Brian. You know, if you, if you watch the show a couple of weeks ago and in fact if you didn't see the show, there's a snap, a snippet of it down here. So if you go to. In fact, why don't we drop this right into the comments here. Oh, perfect. Hopefully that works.

But.

And so anyway, the gets going three or four times. But so anyway, the webinar is going to be next Wednesday 9th November at 9am Pacific. So 12 noon, same time that we do this. And yeah, we're going to be doing a much deeper dive with Brian on this area of marketplaces and E commerce that we were touching on a little bit on our show a couple weeks back. And we're also going to talk about how E commerce really ties into a lot what we do when we are working with CRM and using customer data and how do we use this to tie into the bigger picture. We're really going to look at this a bit more holistically and Brian, as you know, is super knowledgeable in this area. So I think. Well, I know it's going to be a pretty, pretty good webinar, 45 minutes or so on Wednesday. I think this is the first of a series we may be doing with Brian on this subject. But I would say if this is an area that you're, you know, looking at, certainly, or if you're doing E commerce, you're looking at how you're going to effectively use marketplaces. You're thinking about how that's going to fit into your 2023 plans. You'll want to be there. And we put the link here in the thing and we'll also put it up on our LinkedIn page as well. So all that data is there.

Yeah, we'll get that there quickly. It shows up three times there for us this morning, once for each of the platforms.

I see that now. Yeah.

How we get that. So we're learning about the technology we use for, for this broadcast all the time. I met Brian a little over a year ago for the first time at a the Affiliated Distributors event in was in Washington D.C. and Brian was the keynote. And we spent some time talking about kind of taking E commerce data and moving it into CRM and how that can help salespeople understand what a great scenario is. If I'm a field salesperson and all of a sudden I can get an alert through my CRM system that says my customer was searching for these items on our website or abandoned a shopping cart. Now we get all this, you know, 360 degree view of what our customer is doing and what platforms. Right. So we had a really good discussion about that. We've kind of stayed in touch that you introduced to him and then we did that session a couple weeks ago. So I think this is going to be really informative because literally right now we're in this place where manufacturers are grappling with, you know, are we going to have our products on Amazon? Because Amazon's just another distributor. Distributors might be frustrated with that. Distributors are trying to do their own e commerce initiative and many struggling with that, many doing well. And then we've got sales agents and manufacturers reps that are trying to promote products where they can online. Many of them are, how do I play a role in that? We're going to be able to unpack all of this. The other side of it is we've got some other folks that we've done work with and, and Brian has as well that are also in this e commerce world. So we're going to get them looped in for further discussion. So this will probably be at least a two if not a three part session. But if you're contemplating an e commerce initiative, if you've got something going but you're struggling or if you've got the killer e commerce platform and you're with us today, join as well and share some of your insights because we want this to be interactive.

Yep. And, and I think everybody who gets the normal our around Horn newsletter, we should have gotten the information about this as well. And it's also in the around the Horn newsletter as well. At the bottom of the. Yeah is here as well on a camp miss our can't miss webinar section. So there we go. And even if you can't make it live, please sign up because then we can get you the replay and and everything going forward.

So that's right. That's right. That's a great point. Right. Register for the webinar even if you can't come because then you'll get the link to the recording. Lastly, before we go today, I wanted to jump at the very bottom and just talk about some upcoming events. So we've got ISA's fall summit. I didn't want to miss the opportunity. Brendan Breen, the president of isa, has been with us on around the Horn before. We'll have him again probably early in the new year to talk about the coming coming year with isa. Toby Strobos, the manages this event. She's been with us to talk about it. But I'm really looking forward to it. We're helping sponsor it at Lead Smart. So we'll be have a small exhibit there and in one of the sessions. And we're looking forward to supporting our friends at isa. So if you're, if you're not involved with isa, the Industrial Supply association and you work in the industrial world at all, go take a look. It's isapartners.org I believe is their website. The more we get people, whether you're a manufacturer's rep, a distributor or manufacturer supporting that trade association, it just brings value to everybody through the supply chain arena or what we call the channel. So it's real value to that. So we're doing that event. I'm back on the road. It's the week after Thanksgiving. I come home for two days and then head to San Diego for ads e commerce event, which should be really good. I think you're going to join me for that and then get a little break. Tell a world of Concrete, which will be back in Las Vegas in, in January. So looking for a little bit of break after a lot of travel, but two more events this year, so we'll get those under our belt and, and bring our solutions out to the marketplace a little bit more.

Yep. Good. All right, well, Kevin, you need to go back to bed. Appreciate you. Was that for show or was that real?

No, that was. That was. I want to go back to bed, but I'm gonna get a little bit of work done, so.

Okay.

Thanks for bearing with me today. And then this week, frankly, it's been horrible.

All right, well, thanks everyone as usual. Have a good weekend and we'll see you next week.

Thanks, everyone.