New AI Advancements—And Cyber Threats—In Wholesale Distribution

Foreign welcome to around the Horn in Wholesale Distribution with Kevin Brown and Tom Burton. Sponsored each week by LeadSmart Technologies. Tom, Kevin and their guests review the news of the week and dive deep into the topics impacting manufacturers, wholesale distribution, independent sales agents, and the global wholesale supply chain. Whether It's M&A SaaS and cloud computing, B2B, E commerce, or supply chain issues, we peel back the onion with our guests into the topics that impact your business the most.

How are you, my friend?

Doing okay?

Good, good, good. So you survived. You know, it's, it's crazy. I'll just say this real quick before we dive in this morning. Kevin Brown here with Tom Burton, lead Smart Technologies and Around the Horn and Wholesale Distribution. We'll do all our housekeeping in a moment, but the first thing I want to say is Tom and I are both in Southern California, but we're in a different worlds of Southern California. Right. You're at the northernmost end and I'm 60 miles or 70 miles from the Mexican border.

They even call us more central than Southern.

Yeah, you're, you're at that. I always wonder that, but is there a true definition of that? Because in my mind you're like at the bottom most part of the central.

Yeah.

Bottom of the central. Is that right?

Yeah. Yeah. All right.

So how much rain did you get at your house or the, near the office?

Seven inches in three days.

And then up on the mountain pass.

Right above you, I guess 11 or something somewhere around there. 11 and a half.

And we're, you know, with traffic three and a half, four hours away from you, but as the crow flies and the normal drive with no traffic just under three hours away. And I don't think we got, if we have an inch in the last two days, I'd be shocked where I live. So it's pretty, pretty different, huh?

Yeah, no, the, the atmospheric river parked over us.

Yeah. Yesterday it was astounding if you looked at the models. In fact, you sent me one of those to look at yesterday. That was a wild time. So anyways, you know, it's interesting. I was talking with a customer in Minnesota yesterday and they, they used the term Brown Christmas because in fact I was with another, another call yesterday with some folks in Ohio and they've got a little bit of snow, but Minnesota is no snow on the ground. So it's a weird, weird, weird world and timing where we're in right now.

We kicked off the new first year of winter in a big way yesterday.

Here you did so. Well, let's, let's get ready to dive in. We got a lot of stuff to cover today. Again, I'm Kevin Brown. This is my co founder of Lead Smart Technologies and lifelong friend, Tom Burton. We get together every Friday morning. Sometimes it's the two of us, sometimes it is esteemed guests. We'll actually be talking about some exciting esteemed guests. Esteemed might be the, I don't know if that's the right word, but probably for some of these folks. But we got a great, great lineup of guests coming in 2024 and we're going to kick off the year in January 12th with that. We'll talk about that later in today's broadcast. But we get together every Friday morning, Tom and I do, and we talk about the news in the world, in the US In North America, Latin America. We talk in depth about mergers and acquisitions lately, a lot about Artificial Intelligence Day. We're going to be talking a little bit more about cybersecurity and cyber crimes. And we bring all this data together throughout the week. We put it into a newsletter that goes out every Friday morning to thousands of people and it's called around the Horn in Wholesale Distribution. If you don't get that newsletter and you would like to easy way to do that, you could certainly put a note in the the chat. If you're with us live today, you can reach out to us by email. That's very simple. It's helloadsmartech.com or we have a website for the podcast. It's www.aroundthehornpod.com and you can reach out to get the newsletter there. You can also see all of the past or listen to all of the past podcast episodes there. So we do this every Friday. Tom and I do the production costs. The editors that we use, the people that are involved in this are all sponsored by Lead Smart Technologies, which happens to also be the company that Tom and I both work for. And Elite Smart is a AI enabled CRM and customer intelligence platform that has been developed solely and specifically for manufacturers and wholesale distributors. Lead Smart's not sold to construction companies and school districts and whoever else it might be, solely working with that marketplace. I bring to the table almost 35 years of experience in wholesale distribution and manufacturing and Tom is the whiz bang with the technology running that team. And we put our heads together on Fridays to have these discussions. So that's what we do. Again, if you'd like to get that newsletter, that's great. For those of you who are listening later in the day, whether it's on or later in the future on Spotify, on LinkedIn or excuse me, on Apple Podcasts, Spotify, Odyssey, wherever you get your podcast, if you're listening and not watching, what we're doing today is we'll have up on the screen we'll be referencing that newsletter and the articles that we have posted that we've pulled together from around the world on these topics. So if again you would like to get that newsletter, please let us know. And Tom, let's dive in, huh?

Yeah. And if you're, if you're online on LinkedIn or anywhere listening, please let us know you're here. Be great to kind of see where everybody is as they kind of wrap up this final, final real workweek of the year.

Well that's. I'm glad you mentioned that.

Right.

Good point is today is, is it for us for the year we're going to.

Yeah.

Friday off. Like most people, many are off today. I was actually surprised in looking in you mentioned, just mentioned this and I failed to earlier is that we broadcast this live every Friday morning at 9 o' clock Pacific Time. LinkedIn Live, Facebook Live, YouTube Live. As I looked at just the audience that was checking in just on LinkedIn, I think we had three or four countries represented today, some great regular listeners, some new listeners that we're happy to have with us. And then we just saw some statistics the other day that came from our podcast hosting form platform and I think what was it where I think we're averaging somewhere either it was either six or eight countries a week that the podcast is going out to as well. So kind of growing out there. We appreciate everybody's time that they give us to listening to our chatter. So you know it wouldn't be the week if we didn't talk a little about about the economy but we always like to do that related to how it impacts wholesale distribution. So first article we talked about you got this one actually came from our friends at Modern Distribution Management. We posted their article but saw read the same stuff in Yahoo and lots of other places. Housing starts in November were significantly ahead in fact 18% ahead of the previous period. So compared to October's notes. So big deal. Right. But that's. That impacts a lot of folks in a positive way.

Yeah and I was reading that I don't know if that's more of an economic indicator as much as it is that inventory and materials indicator and having availability of. Of that. You know they mentioned here it comes as 30 year mortgage rates have fallen which is true but that's, that's not really relevant to housing starts which are going to be using construction loans and other things for buildings. So yeah, I don't know if that's an economic indicator as much as it is maybe inventory indicator, but definitely it's picking up. And people must, you know, they must believe that people are going to be in a place where they can buy houses as mortgage rates fall. So.

Well, I would tell you what I truly believe this is and it was kind of hinted at a few places in this article is, you know, first off is that the home builders are looking at this and they, the U.S. needs housings, right? So everywhere you turn there's a shortage of housing. But the other side of that is as things started even before the announcements last week from the Fed because obviously this was November data was, we've started to get a more dovish feeling, so to speak. And I don't like that Dov and Hawk thing, but it's, we've started to have a sentiment that's there, right? And then it's where we, I think at six straight weeks of mortgage rates starting to dip. And so my view of this is, and I kind of pulled it out of some of this as well, is that you have the home builders looking at this and saying, okay, take a deep breath, we're ready. You know, interest rates are probably going to start coming down even further. Things were looking dovish even during that time or positive during that time from Wall Street's view. I think people looked at that and said let's pull the trigger on this land that we have and so forth because we've got got building that needs to be done and people need housing. So I think it's extremely positive. It just, it kind of ties in though. You know, we look at pretty consistently. If you're with us today for the first time, we'll use different statistics when we talk about the economy. Sometimes it's, you know, the Mid east manufacturing index. The other times it, you know, might be manufacturing technology indexes. We look at all kinds of different formats with that. And so we just looked at housing starts this week. But when you look at that as a whole, right, and you look at the stock market's been doing not just this year but for the last, you know, what time you follow is closer than I knew last 45 to 60 days. And specifically the last couple weeks, it just been phenomenal. He's starting to put these things together now. This hinting at, you know, interest rates dropping in the new year. There's a, a pent up demand, I think, for people to get moving.

I agree. You know, as I've said many times, I, I don't, I wouldn't say I don't believe we're out of the woods, but I do believe that next year in particular is going to be, I think, a little, I think you're going to see a lot of momentum and a lot of willingness to take more risks. Obviously starting more homes and everything is the risk, right? Or that's the, the risk of what they were doing before. So I think you're going to see more risk, you're going to see more willing to invest. I do think there's going to be a lot of relief from as interest rates do drop and they will drop next year, is it the whole story? In my opinion, no. But I think over the next year I think we'll see quite a bit.

So let me ask you a question about that because contrarian's way too strong of a word and if I'm going to take a shot at you, I'll use a big bad word. But you talk regularly at about the consumer debt, big concerns about that and there is no argument, right, that that's the potential of a big issue. Other articles earlier in the week, quite a few things published on, on the consumer sentiment in the marketplace and still very bullish, right? Whether it's pulling from 401ks and running up credit cards or whatever it is, people are spending. I know a lot of people that are cutting back, but clearly the marketplace is saying they're spending. But when we look at what's going on from a standpoint in housing starts, as an example, today we've got, you know, in the, in this housing starts article really as a side note, just to digress for a moment, you know, we, we. I was on the phone yesterday with a new customer that's in the building materials market and that's just, just coming on using lead. Smart and interesting conversation, right? They sell drywall and metal studs and tools and equipment and all the things that go with all of that. And they're going to see the impact of these housing starts, right? All of those customers. So as we bring this background to wholesale distribution, this is going to play real, real strong. But as we look at the macro view of housing starts being great, stock market doing well. If in fact there's a larger impact to consumers that you, you've talked about most weeks, you reference a concern about that. What do you see as that? Is it a bubble of some sort that's going to have some major impact on things or what's, what's your take?

Well, quickly, two things. One is right, they're going to run out. Consumers are going to run out of spending power. So you max out your credit cards, you, you know, take money out of your 401k, you start paying more and more higher. You know, you are paying higher interest rates on the credit cards if you're not paying them down. Right. You know, maybe there'll be an opportunity for people to take money out of their house as the next way to do that. I don't, you know, know all the. So I think that's the, the one potential risk is running out of spending power. The second one is really something a bit more, maybe less probable but a little more drastic as we saw in 2008, related to mortgages, but where you just basically have a tremendous amount of defaults and what, we don't know what those defaults can do, the whole economic structure in the same way the defaults happened with, you know, what do they call them, the crappy mortgages that existed back in the day.

There's far less of those now, right.

On the mortgage side I believe there is. But now there's a tremendous amount of credit card debt and other debt that is same similar model. It's packaged, sold. It's the same, A lot of it's the same basic framework. So I just, you know, there's. And there's also a lot of other things above and beyond the consumer. Again, I'm not trying to be a, a bear, I guess, if you'd call it on this. I just think that it's again, as I said many times over, eyes wide open and not even being cautious. It's just eyes wide open. And I think sometimes you get, people get caught up and oh, the stock market or one thing like that, and then you don't. You kind of just get caught up in the hype and the party of it and you lose sight of other things. That all said, I think 2024 is going to be a big growth year for on a lot of fronts. We'll see how it plays out in 2025.

Well, I think, I would think something, you know, major would need to happen for the coming year not to be a very solid year with everything that we're seeing and all the indicators that we're looking at from that standpoint, frankly, just because it would take right. For foreclosures. Right. To start happening, it would be bad loans that are adjusting and, or people losing their jobs and we don't see either of those to the magnitude that we've seen in the past. I think I'm very bullish on. I'm bullish on it globally and I'm bullish on it in the company that you and I both work for of a positive new year. So let's kind of jump ahead. We've got lots to cover today. So we posted another article and we've started to talk about this a little bit more. In fact, I think we have Casey with us today. At least I believe he was coming. Casey, if you're here and you're going to listen to this, I had an opportunity to meet a gentleman that's the founder of a cyber security company at a software conference recently. I think he was going to join us today. They do quite a bit of stuff with smaller and mid sized businesses. Sometimes we think about cybersecurity as the Lockheeds or the Boeings or the 3Ms. Or whoever it is that have these big issues. But you know, as we've seen, this article talks about what went on at Henry Schein, you know, and it was quite interesting. So you know, Henry Schein, the huge distributor of medical products and dental products and so forth, has been hit twice by the same group. Clearly they still had access to their system. It appears maybe negotiations on payments weren't going well. But Henry Shines, a publicly traded company, so they've had to restate earnings because what it appears is they've had two, I'll say, three major components of this attack that's causing them big problems. One is they compromised 30,000 customer pieces of. 30,000 customers have their data compromised.

Right.

Big deal, right. It says that they've lost over $500 million in revenue because they crippled their e commerce system for weeks. Right. And then you've got the whole factor of all the other disruptions of just having this in the costs of business continuity and so forth. So big, big deal, right? With this and the latter part of the article that we posted here and some other research I did on this says that actually this group that has attacked them is saying they may be back for a third time.

Yeah, it's a bit of a mess. I mean, obviously.

A bit of a mess.

Yeah, it's. I mean if I'm in Henry Shine and they've certainly got a, what a target on their back. There's no doubt about that. And you know, I don't. It seems like, you know, there's a lot of press around this. I don't know if that's a good thing. You know, in some ways I think it's good that it creates awareness of the problem in the situation. I think on the, on the negative side, it could, you know, cause more people to go, oh, wow, this is, you know, another. I need to get into this business. Right. Of this kind of stuff. So. But I do think on the positive side it's providing some more awareness and we're going to talk a little bit more about that in a minute about some of the other things to be thinking about. But yeah, it's, it's can be, even for a big company with lots of it and all of that, it can be very, very devastating.

No, it's, it's, it's critical. And I, you know, that's one of my favorite things that I can bring to this show is all the conversations with, you know, with the customer base from Lead Smart Technologies. And I was talking to a distributor earlier in the week and they, they have a whole program now that they've put together with a third party to really protect their company in this case. And, and they're not a huge company. They're, they're, you know, moderate size, nice company and five, six branches and so forth. But they're, they're following this guidance of some of the things. That is kind of a nice segue to our next article. In fact, it's from Industry Today. It talks about cybercriminals remain a threat. Obviously that's pretty straightforward, but it was interesting what I thought about, and I don't know your take on this, but they talked about one of the first kind of bullet points. My takeaway notes was that they talked about there having been a spike in ransomware activity in 2019-2021, but a huge decrease in 2022 that they look at as likely that the threat actors involved in this were in a part of the world that is Eastern Europe and the Ukraine. Basically the Russian Ukraine conflict had slowed things down through 2022, but yet 1H23 has seen a major resurgence, even, you know, greater than it had been previously.

Yeah, that, that seems logical, right?

Yeah, it does. It just, it was like when it was so clearly stated, it was like, wow, you know, winner, winner. Other parts of the world going to get on board with the, the Eastern Europeans and, and Russians and so forth that are involved in this. It was interesting to me though, they talked about the expectation of, you know, growth in 2024 of these types of attacks, and they kind of broke them down to being the biggest One in fact they talked about FBI identity. The Federal Bureau of Investigation identifying business email attacks as the most prevalent online threat of anything out there. And you know, we think about it as oh yeah, you know, spam and you know, I shouldn't click on this or whatever but I don't think people can state the importance and the magnitude. And I, I wonder if average worker, Joe in a, you know, 300 worker, a thousand worker company really realizes the magnitude of what can happen to the organization he works at if he clicks on the wrong thing.

Sure. And it's, it's very easy to do. Right. I mean it's, you know, sometimes I find myself, I'm going through emails and I'll see something and my inclination is just oh, that's it is legitimate or it's semi legitimate.

There's the Microsoft logo.

Right.

I can open. Right, right.

And you're not even thinking, right. You're not thinking about that aspect of it. And it's interesting the fact that some of these emails, you know, we have a decent spam filter and through it gets through. They get through and they get into the, you know, the main, the main inbox versus the promotional inbox. So yeah, there's a lot of different ways that you know, and in the same way I think, I think a lot of companies are doing this. In fact I know a person who runs a company that does security training for companies. So that's what they do is they train employees, really train employees on how to deal with this because it's not an, it's not just an issue of having better spam filters and having better, you know, security measures around your servers and cloud and all that. It's also making everybody in the organization aware of it as they say to do proper cyber hygiene. And I think that's going to become more and more of a, of a, a requirement especially in larger companies. But even in smaller companies the magnitude.

Of what can happen is phenomenal. So they hit some, some pretty critical pieces here to be thinking about. You know and they talked about this shift in the focus on moving a lot of this moving to mid size and small and mid sized businesses which I thought was interesting. And they described it as, you know, what did they say? Targeting mid sized businesses for quicker lower risk financial gains. Said the tax are seeing as low hanging fruit compared to the larger, more complex attacks on big organizations. And I think I made this comment a few weeks ago. I think we were talking about this and I think this is important for our audience of wholesale distributors and manufacturers to be thinking about because in all frankness, with due respect, is a lot of these organizations are still a little bit late adopters in a lot of technology. No one can afford to have their business at risk. And it's more than just. We had a comment a week or two ago, you know, on this and somebody was saying, oh, you know, get everything to the cloud. Well, that, that's important. Right. Getting things to the cloud versus on site, big step. But that's not the only step.

And no, but I, but I do think it's an important one. The number of people that we see even running Microsoft Exchange in house.

Yeah.

Versus using 365 in the cloud. Right. There's, there's things that you can do to, that immediately can take some steps. I agree. It's not the only steps. But moving to the cloud is something that I think it's probably the most important, one of the most important things in the. And you kill. You're getting multiple benefits of that. Right. You're handling it from a security perspective, but you're also now getting yourself more lined up for the future. And, and what's able, what can be done in the future. So it's, it's got an added benefit.

No, I think that's good, you know, and you, you kind of nailed it. And maybe you can unpack that slightly a little bit further. Is. I just think that example, right. Of running on premise email servers still. Right. Microsoft can help you a lot. Or Gmail can help you. I guess it would be really Microsoft running on premise. Microsoft can help you a lot if you're in the cloud with 365. Right. There's limits to things that they can do when you're on premise. And you know what, if you're running your ERP system on the same server that is running your Exchange server, it's just, you know, open the door.

Well, yeah. And most, I mean, whether it's. It's on the same network. Right. So whether it's on the same server or not, or the same physical machines or whatever, but it's almost always in the same network. Yeah. And so most people have not established the right network security that's necessary to protect those servers. So it, Whether you have one server, 10 server or whatever, when you move to the cloud, you let them deal with that issue.

Right.

And you know, most of the, almost all the big players are investing literally millions and millions of dollars to make sure that they don't have that as a problem. And so you don't want that As a problem. Let them, let them deal with that right there. That's that. Let them be that. Let them, let them take that job. Because that's not really a job any of us want to deal with.

Oh, absolutely. I couldn't agree. Anyways, the last comment I'll make on this particular article, I just, I think it's important, you know, they made this comment about low hanging fruit with this is that, you know, every, every technology advancement, every new market that we've seen ever Right. In the world is we have a big player and then people start spinning off from that. Right. So if I'm. And I'll just use the simplest example, I can't remember without going back, but you know, the, the group behind the, the. It's pretty well known in the, in the technology world, the group behind the Har Henry Shine attack. Right. Why wouldn't three of their top guys go and say, well you know what, you guys work on the publicly traded companies and I'm going to go work on ABC Industrial Supply over here that's got 27 branches and you know, quarter, quarter billion dollars of revenue and I'll extract $150,000 out of them three times over two years, you know, versus the big deals. Right.

Yeah, I'm, you know, I'm sure that's all. These are sophisticated operations, so expect any of that stuff. But again, all we can do is do the best that we can to try and prevent it. And I think, you know, will, I think reinforce that is. I think he said it. Well, it's a great step for a distributor to increase security. Provides robust data protection, including encryption. Encryption is another big deal. And disaster recovery. So it's those, you know, things together that. Look, I don't want to deal with that.

No, I don't.

No one wants. That's not your core business. So let somebody else deal with that anyway. Yep.

No, that's good stuff. Thanks for that comment. We'll appreciate that. Glad that you're with us today. So jumping ahead kind of, you know, it wouldn't be Friday if we're not talking about AI. Right. So Friday, sorry, AI Friday, AI Friday. It's some days it feels like that, but also it also feels like a Saturday. Sunday, Monday, Tuesday, Wednesday, Thursdays in the world that we're living in right now. But this is an interesting article from Tech Target talking about, hey, how AI is shaping erp. Listen, AI is shaping everything around us at some level. We're going to talk about some robotics in a few minutes as well. And it's just astounding. Right. But they did some nice breakdown of some of the things. It's great. Will is with us. I think there's others with us today from some other ERP companies that have joined us today. I think somebody from Acumatica is with us. Will's with Infor. This article talks about some of the things that are being done by SAP, Microsoft and Oracle about using AI within ERP systems. And before you launch into your thoughts on this, Tom, which I'm really looking forward to is, you know, I'm 35 years, I guess it is now in, in wholesale distribution and in manufacturing. So the folks that we deal with day in and day out, that's just my life of who I've dealt with my whole career. You're the technology guy, right? You, you know, distribution, you've been working within distribution for about six, eight years now and. But you, you comment, it just, it seems like you comment weekly still as, as long as you've been involved in many different projects we've been on together, including launching Lead Smart technologies. You've commented about how astounded you are at the amount of data that specifically wholesale distributors have at their fingertips.

Yeah, no, absolutely. It's a, I mean this is a very data rich industry.

Yep.

And in the tech world and other industries that I've worked in, you don't have that volume of data. You don't have, you know, tens of thousands of SKUs or more and, and tens of thousands of quotes and transactions. And it's just not the world we're in. Right. In a, in a tech world. So we have, we're very data rich. What's what I found promising about this article and I think it goes way beyond erp. Right. I think we all, whether we have ERP or CRM or other tools, the way that we have grown up using those tools is through, I call it more transactional. I go to a screen, I look up some information, I put some information into the screen, I get, I run a report. You know, some tools of course do have some process type things in them as well. But for the most part a lot of enterprise software or software that's used to run organizations and we see this all the time in the, in dealing with ERP and our own company is transactional. Yeah. I think what AI and what they were talking about in this article is really opens up the door to changing how we use technology, how we use these technologies. And that to me is because yes, these technologies do have and will continue to have A tremendous amount of data and valuable data. The way that we use AI to use these technologies, whether it's to automate processes or to do digital twins like we talked about last week or whatever the case may be, it's, it's going to reshape and it says how AI is shaping the future of erp. I think they were even just scratching the surface in the article. They were talking about some co pilots and things like that. I think we're going to see a completely different, you know, is this something in 2024? Not so sure. Is it something that in the next two years, maybe in 2025, where we're going to see and we're doing this. So I'm sure if we're doing this, others are doing this is rethinking the entire interface, the user experience, the ux, the ui, all of that to be different because AI creates a different experience than transactional of what we're used to. So yeah, that's. I think we're just scratching the surface on what's being talked about in this article.

I think one of the big factors that goes with this and it was alluded to in this article as well. Right. Is, and to your point that you made, I think was wise a moment ago was about you. Maybe it's not early in 2024 is in. You joined me for a call yesterday with a customer and we were talking about AI roadmaps and so forth and technology and things. It was good and. But we're early, right. In all of this technology is changing quickly and so from the standpoint we still have the, the whole issue of, of hallucination. Hallucinations. Right. Bet can't even talk this morning until we get I think things a little bit more sorted out with how the AI is going to work with things and so forth. There's going to be some challenges and it's not going to be simple until. Or perfect, I should say, until some of this is sorted out.

Yeah, it's not so much hallucinations as it is unpredictability. With AI, you can ask, you know, I can ask do fish swim? And I'll get one answer and I can ask do fish swim? Five minutes later and get a somewhat different answer. Yeah, that's, that's hard to, that's hard to test and debug sometimes. But again, there's more and more. I was watching really good video this week from OpenAI that they put out on really how you go about testing and refining and optimizing some of the models that are there and how you know where to start and all that. So you're starting to see methodologies and structure for doing this and for building these things. So that'll all get worked out. But yeah, it's very different than some of the transactional things that we are used to. And even when we're building transactional type applications.

Well, and you talk about this regularly is, you know, the, the natural language conversation. Right. And so I mean I, I've lived this in, in my business life over and over again, where you've got folks that you know are in, maybe they're in purchasing, maybe they're in operations, maybe it's even some sales leadership that wants some very specific data out of the erp and it's outside of the realm.

Right.

And the ERP systems are getting better and better and better all the time.

Right.

Of what's available and how easy it is to access. But if we could go from a natural language standpoint and literally just tell the erp, much like we're already able to do in a lot of instances within the CRM, is to be able to say I need these things in natural language versus literally having to put a request into an IT department or another group within a company that says, go figure out how to write me this report. And it goes into a queue and it gets evaluated about the level of importance against other thing in the company. And it's a very different world we're getting ready to head into.

Yeah, no, I mean we, we're demoing that oursel. Right. We have a beta version, I call it talk with your data. Right. Have a conversation with your data versus report on your data. That's a very different type of thing. And hey, let's think about it, right? Whether you're an executive or whatever, there's many times you probably laid in bed or you're thinking about it going, I wish I knew this or I wish I had this or I wish we could get it this again. If you set up the right structure, it's there to be had and literally, you know, on demand.

So that's the beauty of AI too, right, Is it's learning and these models are learning more about how you use them.

Right.

They're going to be helping to even anticipate what you might need next, which is I'm, I'm extremely excited about some of the stuff that you and your team are working on related to that. Let's move ahead for, for time's sake. Before we jump to the next article, Tom Which I just love. And that was so interesting is I just was looking on my mobile device on LinkedIn and where we're broadcasting live on LinkedIn, YouTube and Facebook. I'm seeing some comments there that did not show up in the stream.

The stream thing has been a real. Has been really problematic the last couple weeks about getting its comments together. It needs more AI or something to sort things out.

So I'm kind of watching them a little closer now. Those of you that made some comments, there's quite a number of them that made comments earlier that we missed. I apologize for that. I'll look a little bit closer. From a mobile device, we use a streaming tool that's supposed to gather them all. Everything I've seen from another podcast that you participate in, Tom, and and others is that there's some real challenges with the LinkedIn side of this. So if you're on the LinkedIn side and you've made some comments, then we missed them or apologize for that. But we're appreciative of so next next article. This is, this is. I love this, right. It's from Engadget, Engadget.com and it talks about warehouse robot that understands natural language commands. You want to take your first stab at this? I love this.

No, go ahead. I know you had some really, some, some interesting ideas.

You know, it was, it was interesting, right? If you, if you watch 60 Minutes, the, a weekly news television show here in the US that they have run a number of times that the. I think I've seen it on there a couple of different times. They do these update articles or update episodes on AI within this news show. They show, I think it was at mit. I think it was. They have a, you know, in a warehouse, a small little soccer field or soccer pitch there. And they put these small robots in there with a soccer ball, did not tell them the rules of soccer, did not load them in with any, any very specific prompts or goals for what it wanted it to do. No pun intended. But they actually taught themselves all of these different plays and they had soccer experts watching them develop that they got better in understanding the game through their learning methods. Well, this time now we're seeing an example of this. The company's called Agility Robotics. And this, if you get a chance, it's on Engadget.com en gadget Engadget. Great video. Because what we're first seeing is, and again, our audiences, manufacturers and wholesale distributors is the activity of it going on of what a robot can do in a warehouse. And what they did is they, in this video is they just show a prompt that's move the box that is the same color as Darth Vader's lightsaber to the highest stack. And so at the front of what the robot sees is three stacks, what look like could be stacks of boxes at varying degrees of height. And on the other side of the area, it's going to work within are three boxes. I think they were yellow, green, and red. But it shows you in the video the thinking that it's going through. So you can see what the robot is thinking. And it says it shows you, right. It does its search for what color is Darth Vader's lightsaber. It identifies it's red, and it goes over to the box. And then now it's processing, right, what's behind it of the different heights of these different stacks. And then it goes through and starts asking these questions of which of these will I find and how do I get there? And all of these. And it shows you the progression. And it takes the red box because it went and searched what Darth Vader's lightsaber was, and it moves it to the right stack. Now, if you just think about all that, that can do long term, about whether it's unloading trucks or it's using that after we've used digital twins to rearrange a warehouse. It's astounding to me.

Yeah, the. I, I think I mentioned this year, I think 2024 is going to be the year of the robot where you really start to see more mainstream usage and examples of it. And you heard it here first. This is my prediction. I don't know if this will happen in 2024, but I think by 2025. I was in Costco the other night and I asked a person for something. You know, do you. Where do you have. I don't know. I was looking for something. Where is that? In Costco. And that person didn't know. And then she called over somebody else and they didn't know and. Right. It was like the most inefficient thing ever. And I was thinking about going, you know, if you had like a robot, like a natural language robot in Costco, and I, and I said, hey, where is the, you know, brand or wine or whatever it is that I'm looking for? And they would know exactly where it is and probably would just go over, get it for you, and then come back. I mean, the amount of efficiency that could be created in a place like that, like a consumer place, like that with just some simple robotics like we're talking about. Right. Really see and I think robots have been, you know, most of us don't see them if they're in use, they're in work warehouses and, and things like that. I think you're going to start to see them come out more often. I off I was sitting in the gas station the other day wondering, you know, remember back in the day when they had full serve?

Sure.

Well, you have robots doing full serve.

Yeah.

You know, that kind of stuff. These are the types of things that I look at and like I said, I don't know if this is going to happen in, in a mainstream way, but it's, I think it will happen in the next year, year and a half. We're going to see some real mainstream applications of this that as consumers we're going to run into as well. But yeah, that video is really cool. Just to show what's possible.

No, it's, it's, it was, it was really, I really appreciate, enjoyed it. And the difference, right. If you think about this, and I want to reference back if anybody saw this, this 60 Minutes episode and it's, it's I'm sure available online but you know, with these, these robots playing soccer. Right. And teaching themselves. But imagine, and this is the difference, the big difference here is what they're describing in this particular article was about opening up large language models that are now available right to the robots. Which is where, you know, to your Costco example or, or gas station thing. It's like you know, the, the robot could look over your shoulder and see what your looking at on your iPad while they're filling your gas tank for you and comment to you about what you're reading. Right. But in this case I think back to that whole thing with the soccer playing robots. Imagine if they opened up a, an LLM that could even if just accessing the Internet, let alone a large language model that was focused on football as the rest of the world calls it. Right. Or soccer. And just imagine what those things could have picked up and how quickly by reading every rule and every blog that a coach has written or whatever it is. Right. And the things that we can introduce with these language models is just astounding. Yeah.

And I know we're not going to be on next week, so I don't know if you heard but today, I think it was today or maybe yesterday Apple announced that their new phones and are going to have their own micro large language or language model built in right to your phone. Yeah, it's not surprising. It's, it's, it's kind of expected this to happen but they believe that that could really change the. Well, it's going to sell a lot more phones. Right. Because our phones don't have the hardware currently to handle the a language model like that. But that's Apple's going to be incorporating on there and so forth. I, I think Will Quinn has special powers because he somehow gets through here and nobody else knows Ness does. So whatever you're doing well, well done and he will run a really good link here about that. Soccer robots.

Yeah. Will, if you, if you see the, that other link from in Gadget, throw it up there as well if you wouldn't mind. That's great. Appreciate you doing it. Yeah, it's interesting. I'm, I'm just looking here. We don't have any more since the, since the ones I missed. Kelly Hoffmeister made a couple of comments and Brandon Lee, I appreciate that we in fact Kelly even just emailed me an article about one of our topics earlier. So apologize that we couldn't, couldn't comment on those. But that's fine. Let's, let's kind of jump ahead and, and get the next each week. In fact, this is a good time. I should have done this already. If you're listening on any of the podcast formats and you're not seeing us live here, what Tom and I do every Friday as we get together and we talk about the news around the world, economy, mergers and acquisitions, so on and so forth and we talk about how that references back to wholesale distribution, manufacturing. You are not seeing our screen. If you're listening to the podcast where we look at the newsletter we put out every week. If you would like to get that newsletter, you can easily do that by emailing us at hello atLead smart tech.com or we have a website for the podcast www.aroundthehornpod.com so Tom, good article here from in our Tech Talk section that we do every week about the year in review. We won't spend a lot of time because there's some really good articles we've got to still cover today. But this was nice kind of talking about some of the key things that happened. You any takeaways of anything in particular from this?

No, I was helpful for me because you know, if you just asked me the year it's going to be AI centric but there was a lot of other things that happened this year that weren't AI that impacted the tech industry. You know, the Silicon Valley bank thing which was what back in April or whatever.

March, March 10th.

Right. Big impact on a lot of things that were there. So I thought there was some really good key things in there that we kind of forgotten about or got overshadowed that were worth looking at.

$42 billion worth of withdrawals from Silicon Valley Valley bank in two days. Yeah, it's a little bit of an issue. Right. But it talked, the article talks about the FTX scandal. Right. With going on there and with cryptocurrency, there's an interesting thing and one of the podcasts I think that you and I both listen to pretty regularly is the all in podcast. And, and the guys there all, you know, technology, I don't know, I think they're all billionaires but they do some really good research on stuff and they were in this. Well, I guess it was last week's episode. I was listening to it Wednesday. But they were just talking about all the things going on at Twitter and just all the free speech ideas and things going on with that and the, the stuff going on with even the, the band, the US looking at bands on TikTok that it talks about here. These are important things though. You know, there's, it's, it's interesting too because you know, we see more and more manufacturers and distributors who are hiring social media consultants and, or bringing on somebody that can be working on social media. So there's some good stuff in this article about that as well. So we're going to be talking in a little bit about more discussion coming up about the, the upcoming year and the year behind us. So we'll make an announcement in a few minutes. But just kind of going through the rest of our newsletter here we do each week another section called Industry Scuttlebutt. We try and highlight a few different things happening. Blackhawk Industrial, the large, very large industrial equipment, cutting tools and so forth. Distributors just did an acquisition. Then there's two articles about private equity groups jumping in and doing roll ups with a different one is a roll up of three different metal fabrication companies and the other one is about developing a new industrial distributor called Venturi Supply. The the reason I'll focus on those for a second is just we'll probably feature this article in the next couple weeks. I had an opportunity to participate in an article that was is coming out in ted, which is the electrical distributor magazine, TED magazine about private equity's role in wholesale distribution. This particularly was focused on the electrical market. So that comes out sometime in January. So we'll talk about that more because there's a big bigger and bigger role every day. The every consistently throughout this year in particular with PE and their private equity and their involvement in distribution. So any thoughts on any of those, Tom?

Yeah, the roll ups I'm finding intriguing. It makes sense to me again looking at it more from a technology perspective and we talked about data before. The key would be as if you know that for example they rolled up six it says distributors. The last one there into a thing is can you leverage the data across those different distributors? And that's a lot of the things that we're working on even at Lead Smart, you know it's an ecosystem. Right. So how do we leverage data? Right. Securely and obviously securely and with the right things across the ecosystem to help drive some of the intelligence that goes into some of these things that are here. So I don't know if that was a part of their strategy. I don't know how it could not be.

But I think it's got to be right.

It's got to be as they acquire and they put these together as they have to basically silo out. And it looks like all of a sudden we our comment thing started to work. Yeah, yeah, good point from Mike. It's been a surprisingly busy holiday week on the news front here on in distribution. It's been quite a few things all of a sudden happening at the end of the year. It's been a busy last week for us. It's been a probably one of the busiest holiday weeks or going into a.

Holiday I've seen we had and this was just I think a lot of hard work throughout the year coming together. I did not expect the second half of this week to create much and the, the our year is as a company at Lead Smart is going to close out significantly better than I had anticipated. These were deals that closed in the last couple of days that I was just expecting. A couple of them I wasn't expecting and a couple of them were I just think we're, you know a handful of them are rolling over into the new year. So yeah now when I looked at the out of office replies from the email that went out this morning is astounding the people that are out but you know we also won. Mike's with us today. Thank you Mike. Mike's with Modern Distribution management. We, I guess we'll say republish with credits to them every week. Quite a bit of a few articles. Mike's been on the show. Mike, I'll just tell you real quick, got to get you back in Q1. So let's connect on that. Will Quinn gets the award for being the editorial assistant in the podcast Assistant for the Day. Will's with Infor. So thanks Will for doing that for us. And Will's going to be back on with us too in Q1. Chatted with him a week or so ago about that. So Tom, let's bust through the last couple things we have today with the time that we have. We also do each week what we call we oftentimes have a special feature and then what we call a good read here.

And.

Let'S jump, Tom, to the the good read one first, if you don't mind.

You want to come back to the other one or you want to just.

Let'S talk about the other one first. That's fine.

I think there was one point in there I really liked about the 2024 or maybe what may. I don't know. You may. I may be missing the articles, but it was talking about in wholesale distribution, having a great history does not guarantee a great future.

Great point. Yep.

And I thought that was a very interesting point that they, they brought in there.

The this was tied to it's called 2024 expect the B2B thrill ride of highs and lows. Right. So that was tied to some forester research as well. So they did some good predictions obviously tying to AI again as well. And I think that point that you just made is really good. Right. Is what is, what do they say in the investment world, past performance is no guarantee of future results or something like that.

Yeah.

I've said this forever about, you know, we talk, hear people, you know, doom and gloom.

Right.

If you're wholesale, distributor, manufacturer and you're not doing these things right, you're going to be extinct soon. And I don't, I've never had that view that you'll be gone. There will be some that are gone, there will be many that will be gobbled up. But your business is not going to be the same. Right. You won't, you won't thrive in the way you've thrived in the past by working harder. The working smarter people are gonna clobber the hard working people in this setting. Right. Doesn't mean we're not gonna need guys and trucks and gals running out to job sites and taking care of things and working with customers and still doing some lunches and things like that. But there will be more and more AI and technology enabled competitors showing up. Probably some of them are going to be startups and some of Them are going to be, as we saw in our. In our industry scuttlebutt section, more private equity groups coming in and, and wanting in this marketplace.

Yep. So let's. Yeah, let's go ahead to the, to the strategic planning.

Yeah. So this was. Just lost my notes spot here is. This was a good article. It was John Gunderson with the Dorn Group and just did some, Just a good kind of. He called it three tips to elevate strategic planning performance in 2024 and talked about strategy, planning, unpredictability of the distribution channel. And his three key tips were strategy is guardrails. He talked about a good strategy acts as a guide, preventing the business from derailing while allowing for aggressive growth. And aggressive strategies are preferred over the overly safe ones, which may only achieve slow progress. And I think. And then he talked about, you know, this part of adapting quickly and failures and successes. And the third was diversification to mitigate risk. All this ties back. Right. To what you were kind of just talking about a few minutes ago. Right. Which is you have got to use these things to accelerate. Right. And the tools that are available to us in, in planning and organizing, you know, back to that what you've always done will not get you where you want to go next.

Yeah. And I think there's. I've seen it worse this year in business and in working with some of the, you know, people that we've talked to, as I call it, the. The fear of messing up. And I think there's been a bit of a, you know, a lot of fear when it comes to trying things or buying new things. Yeah. Fomo. It actually comes from the Jolt Effect book.

Yep.

So the fear of missing messing up sometimes is. Well, a lot of times trumps the fear of missing out. I think that as a, from a mindset perspective and what he was saying in that article about failing fast and, you know, be willing to make some. Some bets, but, you know, if you fail, you fail. Right. Move on. I. I think that. I think that's going to be a key strategy that will help companies that adopt that strategy do much better than the ones that are. Well, I have the fear of messing up, so I won't do it. Right. And it's okay. We're gonna fail. Right. We're all gonna fail. We're all gonna. We're gonna learn because it's. There's so much change. We. It's not that we. We're screwed up and we're. We're bad at what we do. It's just there's so much change and there's so much things moving around that of course we may not make the perfect decision but then we just get our AI to keep getting trained more and more and more and then we keep making better decisions. So.

Right.

It's.

Well I think I love that you're describing that you know in this goes all the way back around full circle kind of on the day. Right. Is it talks about in this article and John talks about this here and he says look at the end of the day it's very similar to what you've been saying. It's relationships and history are becoming less influential in customer decision making. Right. And that almost kind of recaps a bunch of discussions we've had over the course of this year. It really does. And I'm looking your eyeballs grab a sandwich still meet in person when we can develop relationships person. But the reality of it is in day to day procurement and purchasing, what you did for me last week or how long we've been doing business together or our companies or whatever, it's just less and less important all the time, you know.

Yeah. So it's again goes back to the customer and the customer buying experience and what they're looking for and and so forth. So it's, it's just at the end of the day line yourself to how you want to buy and those are likely going to be the things that you need to be doing. But yeah, be willing to my. My take or my recommendation is be willing to take some chances, be willing to try some things. I agree. Fail fast and open. Be okay with failing and take the learnings from it and go on to the next one because nobody knows, none of us know what the hell is actually really all this is going to play out and, and work well.

And John mentions in this article, right. He talks about the danger of rigid strategies which is we've always done it this way. Right. He talks about outdated strategies based on past successes. Look, what got you here is not going to get you there. And we see that in so many facets of life. Right. Whether it's you're reaching a plateau at the gym doing the same old thing or it's in your business and how my dad did this when he ran the business or whoever it might be, that's not going to get us where we want to go next.

All right, well let's wrap it up.

Let's wrap up for the day. So you know what we talked about an article earlier about 2024. What to expect. We talked a little bit earlier today about some things that went on in technology in particular in 2023. So we are going, lack of a better term, we're going to go on hibernation or hiatus until the 5th. And you and I will be back on the 5th. But on the 12th of January, I am so excited to share with you. We have somehow and I'm so appreciative to get three yeses. We are bringing together the three musketeers of keynote speaking, research and just some granddaddies. No, no offense, gentlemen to your age because some of you are with us today. But Ian Heller from the distribution Strategy Group, Dirk Beveridge, who is just one of the best speakers out there that runs the We Supply America tour each summer and has a wonderful business consulting with, with mostly distribution and a great human being. And then Mike Marks from Indian River Consulting Group. If you don't know these gentlemen, look them up. Ian Heller, Dirk Beverage, Mike Marks. We got all of them to align their calendars. I'm scared to death of the cat herding that's going to go on because there is no shortage of opinions from these fine gentlemen.

I think it's going to be a quiet shy show. Right. You know, looking at each other, waiting for the next guy to speak.

Yeah. I've talked to a couple of people who have suggested don't put a time limit on this show. Just let it go. But anyways, I'm extremely appreciative one that, that all three of these. I've been trying to get Mike to join us for close to a year. He's just, you know, Mike says he's retired. He's like one of the board members that at lead Smart here says he's retired, but he's busier than ever. And so getting Mike has been tough. Jerk's been with us before, Ian's been with us before. Those two were some of our, our top episodes that we had from listeners and, and follow up with those. So we are. I might be a little giddy and overstating this, but I'm, I'm very appreciative that we get three gentlemen of this magnitude to come join us. And we're going to talk about 2023 and we're going to talk about 2024 and what's to come. And if you've ever heard any of these gentlemen speak, they're, they're wise, they're sage, they've got huge industry experience. And to. I think you mentioned this earlier, Tom. There's no shortage of opinions with this group either. So it's going to be fun.

Yes.

So that's coming January 12th. So what's that? Three weeks from today? That right?

Three weeks. Yep.

Three weeks from today. So. So dark. Next week we're gonna take the day off. We'll be back, the two of us, on the 5th. But please come back. Join us on the 12th. Share this with friends when you see this posted on LinkedIn coming up, and your networks, it should be great. I think Will's comment there kind of states that. Absolute legends, he says, these. These guys. And that's probably true, you know, so I'm appreciative of them coming on. So I think this will be. This will be one for the record books.

We hope so.

Good.

All right. Thanks, everybody. Yeah, no, I want to thank everybody for all the support this year. It's been a great year. Have a great holiday, and we'll see you on the fifth.

Yeah. Thank you, everybody. Again. It's. Where are we at today? Is today 71. 71.

Yeah. Yeah.

It's astounding to me, and I'm grateful as we close out today for the people that come. We got people that are here every week, and every single week, we have new people. Every time I go to a trade show or an industry event, I meet people I've never heard of who are listening to the podcast or are joining us on the live broadcast and making new friends out there. So we appreciate that you like what we're doing. We work hard at getting better. If you have suggestions or ideas about how we can improve our weekly broadcast or the newsletter, please let us know. I don't have any capability to make Tom or I more handsome, so let's leave those alone. But from a content standpoint, let us know what we might do better. But we'll see you all next year. We're thankful for each and every one of you that join us and contribute. We're looking forward to. Well, we're going to. We're going to pass 100 if everything goes right next year. So that's going to be a lot of fun. So we'll wish everybody a wonderful time off. If you're enjoying some time with family, a great weekend ahead, and we thank you. We'll wish you good things and ask you to be kind, be safe, and do good things.

Happy New Year.

We hope you enjoyed today's episode and our guests. Each week, we try our best to dig into the topics that are impacting your business. So please reach out to us and let us know how you think, think we can make the show better, or topics you'd like for us to tackle or talk about more often, and even guests you'd like to see Join us. We're looking forward to bringing you next week's session and hope that until then you stay safe, stay focused, and do great things. If you haven't already, please subscribe to the podcast and leave a review to help others in wholesale distribution get access to the conversation. And finally, please check out our sponsors sponsor Lead Smart Technologies and their manufacturing and wholesale distribution Industry CRM Customer intelligence and channel collaboration platform. That's Lead Smart Technologies atLead smart tech.com.