Around the Horn In Wholesale Distribution - Episode 46

Sam.

Kevin, I thought you'd be dancing in honor of Mike here today, but I didn't see any of that yet.

So I was dancing.

Okay.

Besides that, the fact that it's Friday. Yeah. Hey, good to see you guys this morning. Tom. Mike, how are you?

Good.

Fantastic, guys. Yeah, thanks for having me. I really appreciate it.

Yeah. So Kevin Brown here with Tom Burton, my lifelong friend and co founder of Lead Smart Technologies. But we've got our friend of the show and getting to know Mike and becoming friends with him, but Mike Franz from Insupply. So, Mike, why don't you, as you're going to join us today as we talk about the news going on and things happen in the economy and M and A and all that stuff, why don't you tell us a little bit about you and this company that you recently launched, Insupply, that's kind of doing some exciting stuff.

Yeah. Well, first of all, thank you guys for having me. I really appreciate it. It's an honor to be on. I've listened to you guys and watched you guys for months now. So it's and got to know you a little bit better over, over the course of time. But really appreciate you having on.

Yeah.

In Supply launched a mobile app just prior to the ISA show, which was in late April down in Phoenix. And it's really a mobile app that's designed to bring visibility to local distributors and marketplaces for anybody looking to buy industrial supplies. So we really focus in on raising up the visibility for those types of companies, local distributors and marketplaces like I mentioned, who don't necessarily get the Google results or rankings that they're hoping for. And we try to, to try and help them out with that. So please everybody, feel free and download it.

Very good. And so the let's spell it out because we've got as a reminder here, we'll talk about this in a moment. We've got live LinkedIn, YouTube and Facebook folks with us and LinkedIn folks with us. And then we've got the podcast that'll hit later today. So the podcast folks won't be seeing that in Supply shirt. So why don't you tell people how to get how to get to the product that won't be able.

For those of you who can in supply, the the shirt I'm wearing actually says In Supply. We put eyeballs on your e commerce site. But for those of you who can't see it, please feel free and go to the Apple Store, download it. It's a free mobile app or the Google Play Store. Available in both spots and you can check it out. It's free, simple, easy to use, very user friendly. And we're looking to, one of our big initiatives is to really grow across the US over the course of this year and beyond. But we have, it's pretty exciting news that not only have we signed up companies in California, Minnesota, Georgia and others, but we're looking to grow and one of our big initiatives is like I said, to get to go across the US So if you're a distributor, we would love to chat.

Good. So I N S U P P L I. Right is the spelling and that's what you would find in the, in any of the, the app stores. And so concept here is that local regional distributors can, and even some independent national distributors can post their company information, their inventory, their pricing products out there. And we are using that as a tool to match up end users to be able to see where they can get what they want faster and easier. Right?

Absolutely. Yep. And our kind of, our kind of motto is Search, find, buy. And with, with our app it really shows inventory and pricing. Those are the two simple things that our end user customers asked for during COVID and all that stuff. We all know about the, the supply chain issues and, and, and those issues that people were having. But yeah, Kevin, you nailed it. I mean it's where people can find local inventory or national inventory depending on how they're kind of searching it. But it's, it's a great tool, easy to use and we owe people.

Good. Well, we're happy to have you with us. I know you've got, we want a lot of time on it because we're going to get to the news. But you've got a whole long background. Your history is kind of has some similarities to mine working in wholesale distribution. So you're now on the technology side as opposed to your days with Kimberly Clark and so forth. So you bring that credibility of having been in the marketplace and so forth for many years. So great to have, great to have you with us today. So before we dive into the news, we'll do the little bit of housekeeping that we do each week. So again, Kevin Brown, Tom Burton, we have a guest with us pretty regularly. We've got some great guests coming up with us. And over the next couple months here on around the Horn and Wholesale Distribution. Why do we do this? Well, you know what, the world is full of information. Specifically here in North America we see each week all kinds of information about the economy and technology, ma sales and marketing. And so Forth. What we try and do is take a lot of that broad information, kind of boil it down into bite sized pieces that we get together here with our friends on Friday morning and we talk about the value that that has and what the implications are of that news to wholesale distribution. Whether you're a wholesale distributor, manufacturer, independent sales agent or somebody involved in the ecosystem of getting products to the user of those products. So we bring this all together with us and we do it in two ways. We do it here on our live broadcast on YouTube, Facebook and LinkedIn live on Friday mornings. Later today this will all be available in all the popular podcast formats. We also put out in this the news. If you're watching us live, you'll see in just a moment we're going to have a newsletter that we send out each week. Again it's called around the Horn Wholesale Distribution. If you don't get that newsletter each week and you would like to just pop us a note here and, or in the comments or if you're listening on the podcast, email address is helloeadsmartech.com and we'll get you added to that newsletter. So enough of that stuff. The last piece we'll ask you is if you enjoy the content here, whatever format you're on, click the like the share the follow button, whichever one's appropriate there so we can get our message out to others. Boom. That's it. Tom, what are we going to talk about today? Supply chain disruptions, AI regulations, clean data, all stuff near and dear to your heart.

Yep. And I also want to just take a minute to say good morning to Ron and Will. Good to have you back, Brian, Tom and yeah, Mike, Mike from mdm. We had a great show with the ISA webinar earlier this week. So anyway, great welcome everybody who is with us. And yeah, we got some great topics.

Mike did a great job by the way. Talk about that really briefly. Industrial Supply association is in in the newsletter. We have all the listing of their summer sessions coming up. Mike did a great job of carrying you this week on that top. I thought, I thought he was super.

You know, it's all about, it's all about the people that carry me on these things. So.

All right, today it's on you, Mike.

Yeah, so I hope it's a mic thing. We'll see.

Yeah, very good. No, that was a good session. I know you guys have another one coming up and I'm involved in one of those in July as well. So it's good stuff. So. Hey, so the first news point again if you're listening to the podcast and cannot see our screen, what just popped up was the newsletter I mentioned a few moments ago that we send out each week. So, you know, we were talking last week about the challenges with the ports and shipping and so forth, and in the west coast here, across all the ports on the west coast, they signed a new labor agreement last week, which is great. Haven't heard anything since about the challenges they're having with labor in Canada and the same issue. But we touched briefly on what's going on with Panama Canal, and I thought it was. Just ran across this because this was a great article from industry Today has talked about navigating the dry waters of the Panama Canal. So, you know, you might look at this at first and kind of laugh and go, yeah, whatever. There's not as much water in the Panama Canal. Well, it's a big deal, right?

Yeah, no, it's a big deal. I. I mean, up until last week, I was. I was shocked about this. I'd been to Panama once, and all it did was rain for like the entire time I was there. So it's, you know, it's interesting that, that. And, yeah, it makes sense. Right. If the water levels are dropping, look at that picture of that ship. It's hard to navigate all of these large ships through there without water.

Yeah. So the big standout issue. Right, that they're. They're dealing with. Right. Is they talked about 50% of the rain that they would normally have. So the lakes that feed that. In fact, one of our listeners last week mentioned, and he mentioned that Lake Atun, they're hitting historical lows next month is the, you know, expectation. So, you know, unless you think about, you know, if you're a boater, maybe you can think about this. Right. And in boat terms, we call it draft. Right. How deep does that boat go in the water? Well, when there's less water in the Panama Canal, you can't have ships that are full. And so what they're starting to do now is throttling or governing what amount of depth that ship can have. So whether you're a car carrier or a grain carrier or a container carrier, every time that water drops another foot, there's that much less than they're allowing to come through. And what does that do? Ships aren't as full, fewer of them, because some can't make it at all. And they either have to go around the Cape Horn, which just adds weeks to the travel, and it's a big issue. Yeah. You know, so, Mike, any Thoughts on that?

Well, being up here in Minnesota, land of 10,000 lakes, maybe there's a way we could ship some of that water down to those guys. But I don't know if the, if the, if they're having troubles shipping product, maybe, maybe that will be a challenge too. But. Yeah, well, we can support.

Yeah, I think you're, think you're right on with that from a standpoint. You know, it's just that the crux of this article talked about manufacturers should prepare now for the impacts of the Panama Canal drought on supply chain and peak season shipping because summer is when holiday stuff starts. Shipping and manufacturers that make stuff that are tied to any type of cyclical environment, whether it's, you know, you're making an industrial product that's cyclical or you're a retailer on that side of it, there's going to be challenges. And what's going to happen is people are going to be competing for container space and container prices are going to go up, product prices are going to go up. Right. You have all of the pieces that go along with that. So it's something we should pay attention to.

Yeah. And the last point before we move off of this, they brought up the same thing we've been talking about the last few weeks about companies looking at near shoring or moving things back onshore. Right. Yet this is yet yet another challenge of having to ship something from somewhere that gets added to the equation.

Right? Yeah. If you're making it in America or in Latin America, you know, or Mexico or Central America anywhere, then it's. We're talking about trucks as opposed to shipping. So good stuff with that. All right, what's next?

Well, we have this article here. US Economy shows more Signs of Strength than Weakness and data deluge. And particularly when it comes to consumer spending, which is good. Obviously it's good news to see that the economy is holding up. I do think there is a little bit of, if you peel the onion a bit though, you've got to look at this, especially as it relates to consumer spending is the debt level of consumers is highest that it's ever been and continues to grow. So a lot of that computer, computer consumer spending is happening on credit cards. And I know like personally, I was on the phone, I had a problem with my American Express card. I was on the phone and they were literally begging me to take another credit card at 0% and all of that. So I think it's something to keep an eye on. It's great that we're seeing this, you know, Obviously economic strength, but how is it being fueled? And I think to a large degree it's being fueled by debt. And we know what that can lead to. So just something to be aware of as we look at some of this data.

Yeah, I think that's a good point. That really translates into the consumer cycle of things. But as we talk about whether it's home building, whether it's the labor market and so forth, that kind of ties back to our, our trigger target arena here as we talk about, you know, wholesale distribution. So it's interesting, I hadn't looked at it the way this, this article that did and this was in Yahoo. Finance, which I thought was interesting. It just brought a bunch of factors together, right? It brought manufacturing strengths, the labor issue, the Fed pausing. Right. And so forth. So we saw that this week, right. The Fed paused on, on raising interest rates again. And it's interesting. I, I'm interested in either of you guys have a take on this or anybody in the audience is like, I, I think that people are getting, well, Wall street certainly is, right? We can see it from what the market does, is the market, you know, is getting less and less impacted by what Jerome Powell says. It just, you know, he can talk about these two more, you know, rate adjustments, but I think that's just the Fed banging their chest potentially, I should say, of what they think they may do based upon what may become antiquated economic policy. And we might just see that we've seen the end of it from, from this depending on what happens in the next few months.

I think, you know, I want to bring up Andy's comment here because I think it's interesting when you, it ties together a bunch of things we've talked about recently. So Andy says container prices are not going up. They're down to 1900 for a 40 foot to the west coast or less. Imports are down, warehouses still full, and consumer demand is softening. Asian suppliers are asking for orders and cutting prices 5 to 10% on many items. We talked about this a couple of, I think it was a couple of weeks ago, is that consumer spending is shifting more from buying stuff to doing things, experiences, trips, right, all of that kind of stuff. So it's interesting, you know, going back to our previous thing and the point that Andy brings up is that, okay, well, as a result of a whole bunch of things, export or imports are down, but yet more money is being spent, as we just talked about here, on consumer experiences along the way. But then this all has a repercussion back to the B2B aspect of it, which is obviously who we're talking to here on some of these things here. It's just very interesting to look at all the cause and effect here.

Well, I hope Andy hasn't stepped away from his desk since he's still, he's still there available to type on this comment that just came in. And for those of you that are listening later on the podcast, we have the availability when we're live streaming that we can take audience questions and comments. But Andy, the question I would ask you, as you say, warehouse is full and consumer demand softening. Are you tying that. And Andy's a wholesale distributor, runs a independently owned. He's VP of operations and procurement for a large Mallory Safety supply, so large national independently owned safety and industrial equipment supplier. So the, I guess my question is as he talks about consumer, Are you talking about the consumer of your wholesale distribution customers being the consumer or retail consumers in that, with that demand softening piece, maybe you can pop back on that. The reason I asked that is because they're kind of apples and oranges as we look at that. Right?

Sure.

And the interesting thing too to Andy's comment that really appreciative of him typing that was that, you know, they're doing. And again he could challenge me on this, but I believe this to be the case. The vast majority of a company like Mallory Supply is bringing stuff from Asia. Right. So as long as the ports are open, that problem got solved last week. Right. We, we don't have any issues there. But when we look at things coming from Europe or other parts of the world that need to transit the Panama Canal to get to the west coast of the U.S. that's what we were talking about in that last article. So.

Mike, I mean, just real quick before we leave here, Mike, you know, obviously you're dealing with a lot of this. What are you seeing?

Yeah, well, I, I mean I would, I would pose the question as well as how is this impacting, you know, the spending that manufacturing is doing here? Because I mean a lot of the industrial supplies that we do, you know, is targeted towards small to mid size mid sized manufacturing. And that's, that's kind of the core of who we've dealt with in the past and how are they, you know, from the economic standpoint as you know, let's talk about cash is king and how is that, what is the impact on, on all of these things that we're talking about and considering here, what's the impact on the small to mid sized manufacturing and what is their spending pattern look like now and how's that going to be impacted by things moving forward? So that's kind of the questioning that I'm, I'm thinking about. And you know, as far as Andy's comments, it is, it is interesting that right now those prices are where they're at. But what is the, what's the impact moving forward of the, the Panama Canal and, and other factors that, that may come into play in the, in the really near future? So those are just kind of the questions that I'm always kind of thinking about and asking too.

I think that. Yeah, that's great. I would agree with you. And that's kind of what's on my mind. And I'm appreciative because Andy's with us most weeks, so we can kind of continue. Maybe he can become our. And he's moving a lot of containers in and out of their west coast facilities here, even though they're a national company now. But Andy did make a comment back here is that, you know, consumer products, you know, which is really what moves the most containers. So that's what's driving the appreciative of him sharing that that's what's driving those prices. So I think, Mike, to your point is, and that's what I was looking at by adding this article today is, you know, what's next. Good to see those prices come down because I think if we would have had this discussion with, you know, just about anybody in the, in the consumer world or the wholesale distribution world six months ago, nine months ago, 18 months ago, container prices were crazy through the roof. Right. Like they've never seen before. So it's good to see. Now let's just see what happens next.

Yeah. And really quick to Tom's point about the, you know, credit card spending on the consumer end, you know, when, when that starts to slow down, how does that impact the container prices? And it all just kind of multiplies and adds together.

Yeah, what's, what I'd really like to do is figure out a way how that Tom could get more of these credit cards than I could spend on his credit cards.

Yeah, I mean, that's fine. Yeah, that's fine.

No problem.

Yeah, just, just put, put it in the comment and I'll, you know, take care of it.

I need to be up in Santa Barbara here sometime very soon for us to work on some stuff in your office up there, and maybe I'll just kind of check what might be laying around on the desk next to you. Yep. Very good. Darlene. Darlene needs some new shoes. Very good, very good. All right, let's kind of jump ahead. This manufacturing investment super cycle that's discussed, that's kind of getting started here. There was an interesting article I thought, you know, they Talked about the 2010s were a period of chronic underinvestment and now billions of dollars are flooding into large mega projects, whether it's manufacturing a battery or solar cells, semiconductors. So much of what's going on. Right. We were talking to a new Lead Smart customer the other day in the Southeast. And the amount of factories that are being built down there for battery plants and, and even additional auto plants and then semiconductors that are coming back to the US Is astounding.

Well, and they also talk about, you know, all of the money that the government money that has been earmarked for, you know, basically infrastructure.

Right.

So a lot of. And I think that's just starting and is in the early stages. So yeah, there's, there's certainly a lot of money out there backing up a lot of manufacturing related items.

Yeah, well, they reference in here foreign direct investment is, you know, one of the biggest factors that's being talked about in South Korea, Japan and all of Europe is wanting to build out both manufacturing companies and finance people wanting to build out their presence in the U.S. so it's good, you know, ties back into our, you know, near shoring and on shoring stuff that we've been talking about off and on for weeks too.

So that's got to get it. That's got to get us all pretty excited though, right?

Yeah, absolutely. You know, and, and these people, you know, with these infrastructure stuff being built out, it's only going to feed, you know, our target customers. Mike here's with in supply and ours at Lead Smart and we work mostly at Lead Smart with wholesale distributors and manufacturers. And this should be driving, driving opportunity for them. And you know, it's interesting because sometimes we, sometimes we talk about articles here that are somewhat, maybe tied to a little bit of opinion versus research or tying some things together. But I love this quote that was in. This is from the chief Information officer for market strategy at Merrill bank of America within their private bank. And he said, bank of America, he said they believe the US is in the early stages of a manufacturing super cycle. So good for everybody's business. Right?

Sounds good. And it could offset a lot of the things we just talked about. Right. If consumer demand is down, then this could offset obviously different products in different situation, but still could Offset some of that.

All right, well it wouldn't be around the horn in wholesale distribution if we didn't talk about AI. So here was an article from CNBC talking about AI could remove all human touch points and supply chains. So boom, there goes the, the jack in the box, out of the box for AI. Here we are.

Yeah, it's what I found interesting about this is in particular they use generative AI. Right. So as we all know, generative AI is, is what we're all familiar with with Chat GPT where it's generating content. There wasn't a whole lot of details, but I tried to do a bit more homework on this and what this tells me and Kevin, we've talked about this about related to sales, related actions is what I believe they're looking at is using generative AI to build agents that are basically a series of generative commands that can be done over and over and basically together create a lot of the things that would normally be done through these human touch points. I would love to know more about this. I would be very interested just personally because I'm curious about how they would do this, how they would build the agents, how that would all work with the supply chain process here. But I can start to see what we've been talking about as it relates to sales. Using agents which are series of generative AI commands to lead to an outcome or a goal could certainly be used potentially in this, in the supply chain world.

Yep.

Yeah, it's, it's so interesting to, to me as well, Tom, like the different scenarios that can be built out and the preparation aspect of it and understanding exactly what could happen and being prepared for that and allowing generative AI to help predict that is, it's. I don't know, I've listened to your shows and hearing you talk about AI, I get very excited by it, by the opportunities. And this is just another, another level, you know, I mean, as you know, Tom, I mean, AI has been around for a long time and, and now it's just becoming more at the forefront of kind of everything. And I just look at it as huge opportunity to, you know, create new products, to enhance new products. And this is just another step forward for that.

So Mike, I think you're right, but let's hold on real quick here for a second. We gotta hit pause. We're. Where are we, Tom, for number 46 today? Is that where we're at?

Yes.

So we've done this 46 weeks. That means we're six weeks away from our one year anniversary. And we just had the comments of our, of our entire broadcast that came in from our friend Lars at 3M. So Tom, will you highlight that? And thank you, my friend. So what did he say? He says, I hope it takes a while until Generative AI you guys in the podcast. That's very kind.

Thanks, Lars.

Whether that's tongue in cheek or not, I'm going to take that as a compliment.

I don't know. I think we should be. Our goal should be to figure out how to have at least one automated generative AI show over in the next year.

Well, I was just thinking maybe it would probably be tough to do that in the next six weeks, but. But it'd be pretty funny to do that for 100th episode.

Yeah, maybe for the 100th episode.

Yeah.

How do you guys. How do you guys know I'm not a bot?

Yeah, that's true. Right. Well, thanks anyways. Thanks.

Thank you, Lars.

We appreciate that. I'm actually trying to convince Lars to join us on the show. He commented the other day he's not sure he has enough to add. And I'm thinking, let's see, he. He runs the global channel side of things for 3M. He probably knows the vast majority of wholesale distributors around the world that are large 3M distributors. And I think he has a lot to add. So I'm going to keep on.

I think if he could work for a larger company, we could talk about it. But small company things don't make sense.

Yeah, Andy, that is coming in a few times today. Is Hedging joining us as well? So anyways, I hit pause there for a moment just because I was appreciative of a large comment.

I just wanted to make one more comment on this, on this AI with the supply chain and generative AI. Right. Again, we think of generative AI with ChatGPT. Hey, write a blog post for me, write an email for me, write a social post, you know, help me write an article, all of those types of things. But what's the next chapter of all of this Generative AI stuff is stringing these actions together and you're already starting to see this. If you've used ChatGPT and some of the plugins that they've released recently where you can go in, for example, I think they have an Expedia plugin and it says book me a trip to Hawaii. And it goes through a series of actions to accomplish booking you a trip to Hawaii, including car and hotel and luau's and whatever else you want to do along the way. Right. So I think that generative AI, even though it's been looked at really very kind of transactional, hey, I do this, that stringing these things together and having those work together and be able to then communicate back and forward is really an area that I see is going to be a huge benefit not only for supply chains, but even in the area we're in with more sales and on the revenue side of the house.

Right. Well, so interesting, right, this article. There's a quote here from the chief technology and information office for Marist, the global shipping company. And this is interesting, right. He said generative AI in my mind is a once in a lifetime kind of disruption that is going to happen. So there are going to be losses of jobs in more traditional setting, but I also believe it's going to create new jobs like every prior technology disruption has.

Sure.

You know, that's once in a lifetime situation.

Right.

That we're seeing right now. There's a, I don't know, Tommy comment if you wouldn't agree on this from a focus. But you know, there's a podcast that you and I listen to most weeks. Both, both us do. It's one of the most popular podcasts in the podcast world called the All In Podcast. And you know, it's guys all from technology, it's mostly focused on technology, but they talk about all kinds of economic things and so so forth. And, and these guys are, you know, billionaires that were early in at Facebook and PayPal and places like that that are, that are doing. There's four of them that get together each week on the all in podcast. And you know, I've heard a number of times from those people that said are saying things like this is bigger than the Internet right now. Look at, look in the last 20 years the impact that the Internet has had on our life. If, if those types of comments that we're hearing lots and lots of places are the case and you know, Tom, you've said something, you know, something similar in the past. If that's the case and we look at the magnitude of what's happened in the last, say 20 years in our life from just the Internet. It's an exciting time to be alive and watching what's going to happen in our, in our workspace.

Yeah. And Ron must have been reading your mind because he's saying AI, in my opinion is going to have the same impact on distribution similar to what the Internet we had, which I was there at the beginning. There is so much it can do to help improve supply chain operations in ways that can leverage big data in all aspects. Exciting times and get ready. No, I look, I mean we've all, you know, Ron, Kevin, you, all of us were there right when the, the dot com Internet world was, you know, in 2000. And yeah, you look at what's changed even through mobile and all of mobile devices, all of that is enabled through the Internet. So you look at what can be enabled with AI over the next and here's the difference, right? What if you look at the Internet over 20, 23 years, what's been enabled, you're going to see that same level of disruption in innovation with AI probably in five years, which has taken 23 years on the Internet. And I think that's what's going to be the larger impact is the speed and the velocity of all this.

So a couple of comments to go with that.

You know Tim Burrell.

Oh good, Mike, go ahead.

Do we lose?

Oh, what I was just going to say, I mean I totally agree with you Tom. As far as the speed, the speed to market, if you will, as far as how people utilize that and prompt engineering, the early adopters and how they, how they really learn to utilize.

Excuse.

Me, chat, GPT or generative AI in the best and most productive ways. Those that's going to accelerate the how the companies utilize that and it's just going to be, it's going to accelerate and accelerate even faster and faster and how the how to best utilize it. But I think you know exactly what you're saying as far as the how it's disrupting specifically our industry again, I just keep going back to the fact that I'm super excited about how that can, how that can change things and improve things. So that's a little bit of 2 cents there.

I think that's, I think that's powerful and we're going to see this right as I started to see Tim, Tim Guerrero, who's a packaging industry executive, you know, seeing commenting here that seeing a huge surgeon requests for manufacturing automation, right? This stuff is going to be moving and happening quickly. And so that tied with, with, with RP's comment, Ron's comment earlier about this and the impact of distribution. It's going to be astounding. And I think, you know, if, if we're not talking about this and thinking about it and you know, I'm sure there are other people in the wholesale distribution world that you know, are talking about some of this stuff in articles and podcasts. We're really trying to through our weekly around the Horn broadcast. You really try and get people's attention to be digging in and learning about this stuff. And I wanted to make this, we can kind of wrap up on this topic momentarily. But there was a quote out of this from one of the analysts there from Morgan Stanley that was focused in this article from cnbc and he said, he said that the one noted threat is high tech digital entrance to industry. He said it could be a double edged sword. He said AML might help companies become more efficient, but it could also reduce the need for services from third party logistics firms that organize packing, storage and shipping. Now I'm going to hit pause on that statement for just a second because he talked about these, you know, this is this, a lot of this article was tied to freight movement and shipping and so forth. So he referenced these third parties. What I want to throw out there to both of you guys and our audience is these, I'll call them middleware type companies that are niche service providers that try and make organizations more efficient. Tom, we've talked about it a number of times in our, in our business planning meetings about, you know, software related companies who were critical to us being able to tap into, you know, ERP systems and market automation systems and E commerce systems with that or elite smart customers that are almost irrelevant or will be soon because of the ability to build these tools. So I wanted to kind of throw that out to you guys to kind of think about. There are a lot of companies and even niche or cottage industries that might just go away through some of this because the service that they provide can be automated so quickly and easily.

I don't know. I think the way that they will go about it could be completely changed and, and yeah, and some firms aren't going to be able to adapt to be more tech or AI centric in how they go about it. So I do agree that there'll be impacts there. But at the end of the day the companies still need the, what, you know, the logistics and the pieces there. It just may be implemented through more tech and AI related pieces and the right prompts and the right structure. So you still need that expertise, if you will. You just need that expertise implemented in a different way and, or will be implemented in a different way. So and I think that's the point about, you know, there'll be jobs that are lost, but there'll be jobs that are created, created along the way. But the, the need is still there. It's just being implemented in a different way.

And just to add to that, I think the Companies that are providing those services, they're going to have to adapt and they're going to have to adapt quickly or else they're going to be gone, in my opinion. But also the adoption rate by the companies that utilize them. You know, in my experience, 20 years of being in and around this industry, adoption rate is not the speediest thing in this industry. So adopting that new technology and that new mindset and that new way of thinking and going to, going to market and business is, that's going to be critical in that as well. So, you know, if somebody comes in and their service provider and says, you know, hey, you could probably take care of this with ChatGPT, but we've been providing it to you for a while and we're updating our systems to accommodate that, are you going to get rid of us? There's, there's going to be, you know, that's going to be the crux of the issue, I think.

Well, I think that's great, Mike. And that's why I threw that kind of as a hand grenade out there to have this discussion, because I think you nailed it, right? If you're kind of, I'll call it a middle service provider of kind of unique things that really just make something easier for a company. Now, you, in my opinion, you better be thinking about what that pivot is about, how you're going to implement these things to make what you do now dramatically better for your customer at an efficient price so that they don't just say, you know, Tom, you started with one of your early comments on our broadcast. Today was about, you know, we're. What did you say, six months out from you being able to sit down with a laptop and start, you know, building these models. You know, there's. And then there's marketplaces, right, that are being developed right now for prompts. So it's not unlikely that you could have a, you know, a wholesale distributor that's got a, you know, a son that's in college that could go out and start building some bots and some. And some learning models and so forth to replace some service providers that they have. So my point to start the discussion was, hey, you know what? Everybody's going to be impacted on this. And there are a lot of companies out there that if you're not ready to pivot and embrace this to Mike's point, and show how you bring value using the AI, you may be in trouble.

Can I, can I add one more point, please? That has to do with Mike Hawk. It just added. Added Something here and I totally agree with it about. There it is. Do you want me to read it or.

Sure, yeah.

I think there's a notion that AI tech is only for the big guys that have capital and talent resources to leverage it. That may be true for some of the AI based major tech platforms, but from what I've seen there are many entry level AI tools to small mid sized distributors manufacturers can leverage with minimal staff which actually can help them compete with the big guys and do more with less. And not to, you know, talk about what's on my shirt too much, but that was and has been our attitude moving forward. If we can create and this is where I was talking about the speed to market and being able to create these types of products products is that it's easier and easier to create these types of products but to keep it manageable and very easy to understand. And the products that are being developed, user friendly, easy to use with big impact. Those are the types of things that I think we're going to continue to see and that adoption rate and speed to to adoption is going to just increase and increase as as these types of products are put out into market.

Like it.

Good. All right, if that's anyways good, good stuff. We're going to. Obviously we talk about this most weeks. I don't think there's going to be any slowdown in our discussion on AI. It always generates some good comments and some good follow up discussion. So next article on the newsletter and again if you're listening in on the podcast and you can't hear see us I should say which, you know, some might look at these three mugs and be happy that they can't see the three of us today. But we do a newsletter each week. It's called around the Horn and Wholesale Distribution. If you do not receive that each week and you would like to just use the email address helloadsmartech.com we will add you to that list. We usually get two or three additional requests, if not more each week, so don't hesitate to ask for that to come out. So the next article that we're talking about is the EU AI act is near and the US AI regulation is coming. Here's what you need to know, Mr. Burton. I will let you get started.

I don't have any opinion here so we'll move on.

All right, where do we start?

Yeah. So first of all, just a couple points here is that the EU act is not finalized. So it's in process.

It's not not been done and you.

Talk about us AI regulation is coming. I think that's maybe, maybe coming. I don't know that we can say that for sure. But again, my take on this is. And again, I totally understand why people are talking about regulation and I prefer the word oversight and I in particular market oversight.

I think your mic is moved a little bit.

Is it okay now?

Perfect.

Thank you.

Some brilliant things. What was it that I.

Well, you know, I was just thinking it's like I can live with not hearing you, but this audience, they need to hear what you have to say.

Just real quick is, you know, I believe that market and market oversight can handle a lot of the fears about what can happen with AI and in particular, it's AI models. Right. People are concerned about models that can do all kinds of bad things. Totally understand. Very legitimate concern, however, and even think about like, ISO 9000 that we had and other sort of market oversight quality levels. I can see things like that happening with models that if you're going to use models, especially very large language models that, you know, like OpenAI or, or Bard or some of the other ones, but there's going to be a lot of other large language models out there that have some sort of stamp of approval. They have some sort of quality level and QA on them. I think that makes sense. And I think the business world will want to include those because they're not going to want to get in trouble. Right. By doing those. I think that the government regulation, first of all, and something that is very hard to, if not impossible to regulate, it ends up just creating a lot of friction. It ends up creating a lot of friction on innovation. It slows down what we need to do, and I don't think it's necessary now. Does that mean it won't happen? No, it very well could happen for a lot of reasons, but I'm not sure that it's necessary. I also do think that I'm hoping that we're going to take a look at, you know, what happens in the EU and does it really become practical or, or what the, you know, kind of watch from the sidelines a little bit and see how that's going to play out if it, in fact, you know, becomes. Becomes law.

Well, Mike made a good comment before we went live today. We were talking about this and we all kind of have similar but maybe a little bit different thoughts on this. But, you know, Mike had commented about the wait, wait and see idea. I think you had said, Mike, that the US is kind of looking at, because, I mean, While to your point, Tom, right in the article says here it's not signed, sealed and delivered, but they've been working on this for two years and you know, it's well within the European Parliament. And you know, third, what did they say? A third of three EU core institutions are already working to pass this draft. So it's coming there and it'll be interesting what comes out of that. Mike, you want to expand on your thoughts on that a little bit?

Yeah, you know, I mean, anybody with data sets and language modeling capability is looking at this and is going to be playing with it as, you know, frankly, as we are, and keeping an eye on it for sure. And we'll kind of wait to see and let the dust settle a little bit before we jump into action because, you know, a lot's going to probably change based off of what happens in the eu. And hey, who knows, maybe they'll come up with their policy and then we'll have Chat GPT, JPT review it and we'll come up with our own policy based off that. Who knows, that'll be maybe part of the whole equation. But yeah, we're gonna, we're just us. Personally, I can't really speak for anybody else, but what we're doing is we're kind of waiting for the dust to settle and see how that all pans out and then we'll check and adjust as. As needed.

That's absolutely hilarious. Let's take the EU regulation loaded into Chat GPT and get some feedback on it. Love that. That is the best thing today.

Have it, have it, simplify it, simplify it.

Make it easy to understand.

Right, Mike, you. You and Lars win the day.

High five, Lars.

Yeah, so that's pretty funny. I, I just, you know, so Tom, you took a good angle at this and I, I appreciate what you're saying. You know, Tom made commented about bad actors. You know, we know that they're there. There's far more good than bad coming out of this already. You know, if, as a side note, right. I think about this, my father has, has battled. I think he's had seven battles of cancer in the last 25 years with four different kinds. I mean, the fact that he's still breathing is astounding. But one of his oncologists said, I think like 15 years ago at a cancer survivor dinner, he said, you know, oncologists job is to keep people alive with a quality of life because we're so close to solving cancer. And that was pre AI. And so I think you're just putting that into the medical field about the tools and the benefits to the human race that are going to come out of that are pretty phenomenal. I struggle a little bit, Tom, and I'm going to take a little bit of a different tack than you did on this. But I like the idea at some level of some regulation. I thought it was really. We talked about this a little bit pretty going live this morning. The, the ISO analogy that you brought to it or you know, the, you know, if you look in the safety equipment world, right, we, we niosh, right. Approves equipment and so forth. And ISO, I think, is the best example, something like that, where there's an expectation and so maybe it's not regulated, but they're, you know, government regulated because, you know, we can see the heavy hammer that, you know, some political people want to hold over technology companies and social media companies and stuff now. And I think this could just be the next reach for chest banging and table pounding by, you know, some children out there. But I do like that idea that there's some standards because when you have those standards of care, so to speak, now you're opening yourself up for huge financial harm. Right. If you can be held liable in a court because you didn't meet a threshold or a standard. I like that idea. As, at least, as of, at least as of Friday morning, the 23rd.

Well, and again, right. You hear the word regulation, a lot of people think like fda, you know, you go through drug, drug trials and it goes in and it has to be trialed and then approved. And, and you know, that's maybe one in one extreme that's, that's been discussed on something. I don't think that's practical at all with technology. I agree that the having oversight, having quality guidelines, having again, that Good Housekeeping seal of approval, however it's right, however it's managed, makes sense. It makes sense for the builders of the models and the users of the models. So I think the market will take care of a lot of this on its own. It does, right. I don't know that we need to meddle with it from a government perspective and we can still end up at that same place. But again, that doesn't mean it won't happen or there won't be people trying to, you know, as you said, chest pound their way into that.

Yeah, I'm not. So I think this is a conversation for another day. We're running short on time. We can pursue this further. I'm sure I'm in alignment with you on the market taking care of this itself. But let's, let's take this to, to another week going forward.

Great. Yeah, yeah.

It's all, it's, it's good. You know, after 50 years of friendship, we don't have to agree on everything. So each week we have a. So we'll move on from this regulatory piece. We have some special features that we do this week. One of there's a great article about ethical concerns in supply chain management and it's missteps to avoid. That's really solid. We talk each week as well about what we call our industry scuttlebutt section. Sonepower, the big French electrical distributors merging two of their large groups. This is gonna. Was talking to somebody yesterday about this. It's really going to solidify. A lot of what Crawford Electric is able to do is with their footprint expanding. Talk about an acquisition here by Pete Pip Global safety company. But I think because Mike's with us as well. Mike Hockett from Modern Distribution Management. My apologies to you and Tom there. We missed publishing last week. MDM publishes top distributors list for 2023. Andy Mitchell that was on there earlier this earlier they were made the list as one of the top safety distributors. Ron Paulson that's with us today is a retired senior executive at Grainger. They were certainly on those lists. So that MDM list, if you get the newsletter and you click on that, it requires you to pop your email address in. It's gated. But it's a simple thing. And if you don't get content from MDM already, you should be because they're a big contributor. What we do each week. Lastly, we have two articles that we one we do each week called Goodreads. This one is from Inc. Magazine about employees working shorter hours and employers are happy. Which is kind of an interesting read on that. I want to. In fact I'd love it if you know Ron, if you or Andy or some of those that came from wholesale distribution. Tom May that I know was with us today. Love your feedback on what you think about that as shorter hours and employers really liking it on the wholesale side of the world. So last one, Tom. Give us 30 seconds on the Tech Spotlight article we have this week, the True Cost of Dirty Data. Because you talk about dirty data all the time.

Yeah, I actually think we should put this in next week's article or next week's newsletter and spend some time on this. We're not giving it. I mean we've. Everything we've talked about today about AI and whether you're talking about models or even regulatory, at the end of the day, it's all fueled by data. We've talked about this on previous shows. So what's cool is I'm starting to see even in our industry, a bit more recognition about the importance of their data and the recognition of the value of the data, which even a couple of months ago, people had been like, what data? Yeah, we have data, but it's a mess, and who cares, right? So we're starting to see the recognition of the value of data and how it can be used. But yeah, let's hold this one or maybe use it next week and spend some more time on it.

What do you think, Mike? Should we talk about it again next week? Will you chime in and comment from the sidelines?

I mean, that's a guarantee. Yeah, no, this is the baseline of our, of our company, of our industry that, that we're. That we're in. And, you know, from a. From a. A user of data, it's a huge challenge to, to manage, organize and, and utilize it correctly. But, yeah, I mean, I could talk. We could talk about this all day. It's.

All right.

Well, we'll.

We. Yep. We'll bring it back next week and we'll.

Good.

Well, Ron Paulson says he will, too, so we'll be here to talk about that. So we'll unpack that a little bit further.

Maybe we need to have a data episode. You know, I'm sure that will be a round table. Yeah.

All right, well, we'll.

We'll go from there. So, a bunch of good events coming up on our newsletter. We have a calendar of events from around North America that are upcoming, so get a look at that. But in wrapping up today, great comments. We really appreciate everybody being with us today. We have people from a broad spectrum and background, and we thank you for that. Again, if you don't get our newsletter each week and you would like to, it's helloeadsmartech.com Mike, thanks for being with us today, man. I hope you enjoyed yourself. You good, good feedback.

Any.

Anything to add in closing?

Hey, I can't thank you guys enough. You do an awesome job here, and the comments from everybody, keep them coming. I know Tom and Kevin appreciate that participation, and it's cool to see that, you know, a lot of. A lot of industry folks are paying attention to the shows that you guys are doing, and it's super valuable. I'm not just saying that because I'm sitting in the seat right now, but When I've tuned in in the past, I learn a lot. There's valuable information and I love the way you guys approach it. So I can't thank you enough. And hopefully everybody gets the same value that I do.

Thanks for that. I appreciate that. We'll have you on again and down the road again. Mike. Friends from Insupply I N S U P P L I if you're listening on the podcast and cannot see his handsome face and and T shirt that says the name of the company mobile app to match regional, local distributors, inventory and online content for end users to quickly and easily see where they can get access to products fast and easy. So, hey, great weekend ahead. Tom, you're laughing. What's going on over there?

I just love Brian's comment. I just. I can't wait to discuss the dirty data. I'm thinking of, like that movie Dirty Dancing or whatever. Dirty Harry, maybe the Dirty Harry. All right, yeah. Thanks, everybody. Have a great weekend and we'll see you next Friday.

Thanks for being with us. Everybody else, have a great weekend. Do good things, be safe.