Intro/Outro (00:03):
Welcome to Supply Chain. Now the voice of global supply chain supply chain now focuses on the best in the business for our worldwide audience, the people, the technologies, the best practices, and today’s critical issues, the challenges and opportunities. Stay tuned to hear from Those Making Global Business happen right here on supply chain now.
Scott Luton (00:31):
Hey, good morning, good afternoon, good evening, Scott Luton and Gregory Ss White with you here on Supply Chain. Now welcome to today’s live stream, Greg. How are we doing today? Just,
Greg White (00:42):
Uh, cashing out here in my private podcast,
Scott Luton (00:46):
<laugh>
Greg White (00:47):
Studio on new couch. No, just, yeah, sorry.
Scott Luton (00:52):
No, <laugh>
Greg White (00:52):
Like this look right. I mean this, this makes us look like those guys that just sit around and
Scott Luton (00:58):
<laugh>
Greg White (01:00):
What is supply chain anyway, right? I wanna be one of those guys.
Scott Luton (01:05):
<laugh>. All right. So today, folks, it is as always the ever reliable, the supply chain Buzz Live show that comes at you every Monday at 12 noon Eastern time, where Greg and I, and a lot of times friends, guests, even family members, as I can tell, we’re gonna be discussing a variety of news developments, really across global business. We want to hear from you. So give us your take in the comments throughout the show. And Greg, if folks are listening to the podcast replay, they should come check us out live on the social media platform of their choosing sometime soon, huh?
Greg White (01:37):
Yes. I don’t know why live, but yes, <laugh> do it on YouTube. The nice thing is you can do, you can see the live version, you can count on it to run. I know we have a lot of friends on LinkedIn watching us through LinkedIn, but YouTube runs and it just works. And then you can always watch the, you know, the recorded version as well, right? We’re really digging into some statistics that are very confusing about how people are consuming podcasts these days, but more and more so you to consume them on YouTube.
Scott Luton (02:07):
Okay?
Greg White (02:08):
Have Catherine on a show one time to talk through those statistics because every time she tells me about ’em, I’m not less confused.
Scott Luton (02:16):
So folks, we got a lot to get to here today. So welcome everybody. Before we get started, I think we got four stores we’re working through here today and we wanna offer up some resources. So with that said, we dropped over the weekend, Greg, and we really focused it around, you know, we had talked about last week on social, our ongoing commitment to support our veteran community, right? In a variety of different ways, but especially via our pro bono Veteran voices programming, which is in its fifth season. And Greg, as you know, and you may may have seen some of it, we got a lot of feedback on that Friday morning social post. So we use some of that feedback to offer up and answer questions. ’cause one of the questions we got is, how can we do more? Right? How can we do more to better support the veteran community in business or transition or you name it. So that was the main thrust of our, with that said over the weekend, Greg, and how to
Greg White (03:07):
Do more,
Scott Luton (03:07):
Right? Yeah, that’s right. We’ve talked about it here before. Greg. Speaking of how to support veterans, if you remember when we first met, or early when we first met before we, we were knocking out a lot of these shows together. We were at a big logistics event here in Georgia, right? And we wanted to bring in a bunch of veterans so they could make network connections and, and help their transition and stuff. And we did all that. You are early supporter, you wrote that check, you and many of our other friends. And we got over a hundred veterans out to this logistics summit. And better yet better than the networking Greg, if you remember, some of these veterans got jobs offers on the spot. How cool was that Greg?
Greg White (03:48):
Right? Well, I think another company that I was associated with at the time, N P S G, was actually hiring at the show, which was really cool. Yeah, that was great to see. You know, that’s a difficult transition when I say, you know, Scott, I mean you, Scott Luton. Mm. Former Air Force, you know, so it can be a difficult transition because you’re trained in such specific things in the military, you’re trained in such a specific way, but sometimes the free flowing nature of civilian business is, is not a natural for you. Right? Right. And the wide ranging view that you have or have to have of your job, rather than the very focused on this thing view that you have to have in the military can be a difficult transition for folks. So we’ve just spent pretty much every year since that helping veterans to assimilate into the wild wildlife of civilian jobs.
Scott Luton (04:44):
That’s right. So from that personal experience on both sides of the coin, so to speak, we offered some expertise and some ideas, some practical ideas for how folks can better support the veteran industry from a transition standpoint, from a already established standpoint. You know, ’cause you got a lot of veteran-owned businesses, lots of ideas. So check that out. We drop the link in there and let us know what you think. And hey, if y’all come across something really cool that companies are doing for the veteran community, hey share. We’d love to blatantly steal that idea. <laugh>. No, we’d love to take it and celebrate it and amplify. Yeah. Challenge other organizations to do it. Greg, your final word, do
Greg White (05:21):
It.
Scott Luton (05:21):
Do it. That’s right. Do it. Don’t talk about it. Find a way to do it. Alright, one other resource. Hey, join us tomorrow morning, special time, 8:00 AM Eastern time. We’re partnering with our, a great friend of the show. Rah Jose. Well, hey, we better get down to work then. Greg. We got a lot to get through here today. Are you ready to do it?
Greg White (05:39):
Yeah. We acknowledge a few weird things that happened. I mean, Scott, we have to talk about it. Have to, one of the chiefs players at dating the most famous person on the planet, right? It was like, I went to a Taylor Swift event and a football game broke out <laugh> the US got routed. Oh, in the writer cup. Oh, by rest of the world, I mean routed. Yes. Oh, well. So the US government didn’t shut down and the writer’s strike is over, right? So it’s like, I don’t know. So many things were brought to conclusion over this weekend, except for Travis Kelsey’s relationship, which I fear will happen at the worst time.
Scott Luton (06:18):
Mm.
Greg White (06:19):
Mm-hmm. But yeah, I was thinking about that this morning, Scott. How many things kind of came to conclusion this
Scott Luton (06:23):
Weekend? That’s a great call out. I watched some of that. We’re gonna have to save that. Golf was a tragedy as it unfolded. Talk about finale. We had a finale just about in the first day. Yes. The Ryder Cup this year.
Greg White (06:35):
So they lost by five games at, by the end of game day one, they were down by five games. Six and a half one.
Scott Luton (06:42):
It was ugly.
Greg White (06:43):
Yeah.
Scott Luton (06:44):
Alright. But hey, we’re, we’re gonna celebrate the end of the rider’s strike. That’s a lot of folks that impacted a lot of people especially, you know Sure. A lot of folks talk about the, all the big money that’s tied up there, but there’s a lot of folks that work day to day, you know, paycheck to paycheck. So hopefully we can get past that and hey, from a selfish standpoint, perhaps get more good content out there. Put everybody to the work and, uh, enjoy the stories to come. Alright. So Greg, speaking of strikes, while the Hollywood strike apparently is over with one other big strike continues. So, diving into our first story here today, we’re gonna be talking about the ongoing labor strikes in the automotive sector. Now as reported by our friends over at C N N Business, Greg, heavy duty and Media duty Truck Maker Mack Truck.
Scott Luton (07:27):
Well, the good news there is they’ve averted a labor strike as it seems. Uh, they’ve reached a tentative labor deal with about 3,900 employees that are part of the United Auto Workers u a W Union. All the details have not been released just yet. But of course, this deal with Mack Truck was made as another 25,000 U a w members. Our on strike at Ford, STIs and General Motors Right? Strike at the big three. Greg was expanded last Friday, once again. ’cause it, it was been expanded a couple times, last few weeks as on Friday, two more assembly plants were added. Now side note here, the a w s strike Fund was at $825 million in early September prior to the big three strikes is estimated that it costs that fund about $14 million a week in strike benefits. Small checks that go out to all the affected workers. Right? So by averting a strike with Mack Truck, it averted a, an additional drain on that big fund. So Greg, I am looking forward to getting your thoughts on as we get past one strike and it looks like we get past another more related strike. We still got a big one going on. Yeah.
Greg White (08:36):
This is one of those things that I was thinking about this weekend is, you know, American workers are already arguably maybe inarguably the highest paid automotive workers on the planet, which is why so much of our parts production and all those sorts of things have gone offshore and why we had to adapt our definition of an American car to include a lesser number of parts made or sourced in the United States or North America, right? Mm-hmm. Mexico or Canada or us. So I was talking about this earlier, you know, when times are good, everybody wants a piece. But when, when businesses down, nobody wants to get back. And it’s gonna become quickly an untenable situation, which we’re gonna talk about one of the potential solutions in, in the next story that we discussed. But the inevitability of robotics, ai, you know, things like that. Replacing human beings at a 36%, I think is what the current request is.
Greg White (09:32):
Mm-hmm. Wage increase. Is that right, Scott? Yeah. Alright. I want everybody to just take a quick pause, think about what you make today and think about how likely it’s that your employer could afford to give everyone who works for your company a 36% wage increase. Wow. I mean, it’s not realistic. It’s not sustainable, long lasting, sustainable, right? I mean, these automakers will be forced to use more and more robotics and then, you know, what will these people do for money? Because, I mean, I’ve lived in Detroit, I know what happens to an auto worker when they’re put out work. ’cause no one, no one in any industry if there even is any industry in Detroit, but no one in any industry around the world pays as much as the automotive industry does. Hmm. So those people get a heavy dose of reality whenever they get outta that industry.
Greg White (10:21):
Hmm. I think it’s, uh, an interesting challenge. You know, the imp prudence of our administration and taking a side here is utterly disdainful. I, I don’t know what, what else to say. And I think, you know, irresponsible. So I’m really, really concerned about these auto workers. On the other hand, you know, as we’ve talked about for a few years now, younger generations are staying away from manufacturing jobs and droves. So they’re gonna be automated anyway. Mm. I think this might be a last gasp effort by the remaining baby boomer auto workers to get a big pile of money before they go into retirement. Maybe, I don’t know. Mm. The dynamics of it are, are not complex. They’re very simple. We have reached a threshold where we’re at. The auto companies have to do something besides employees.
Scott Luton (11:10):
Hmm. It’s amazing. I tell you what, we’ve been talking about AI for years now, Greg, of course mm-hmm. <affirmative>, but goodness gracious, it is just, it is blown up to a whole new level and rightly so because with results, with outcomes, with really practical application as we’re seeing out across industry. So Kyle says great points, but hard to sell when these C-Suite and companies are making the highest profits of all time. Greg, any thought there?
Greg White (11:35):
Yeah. We all know that’s because of the flood of capital from the government into the US economy. And people are buying things that they wouldn’t ordinarily buy at prices they wouldn’t ordinarily pay. In fact, we’re gonna talk about the economic state of America and that’s not sustainable either. Right. So now is a little too late to ask for compensation around that. And, you know, I can’t, I can’t really justify the amount that C-suite executives are paid. Yep. I feel like if their compensation is tied effectively to the status of the company, and it’s often tied to the share price of the company, that’s where they make most of their money. So if you’re a UAW member and you wanna really invest in your business, buy stock because that’s what the CEOs do, or include stock in your compensation because that’s what the CEOs do. They get paid for the impact that they have on the business, not for the hours that they put into the work. And they take a risk by doing that. Yep. Right. What the U AAW wants to do is not take a risk and only benefit when times are good and not pay when times are bad. Hmm. So, you know, that’s a common situation. I have little empathy for either side in this <inaudible> <laugh>, nobody wants to talk about the times when GM lost billions and billions and billions of dollars, which wasn’t that long ago. Right. And they didn’t ask the workers or force the workers to take a pay cut like their c e O did.
Scott Luton (13:01):
Hmm. Folks, check out the link. Don’t take me or Greg’s word for it. Check it out. Uh, this latest story from C N N business or where else you get your news from and let us know what you think. Only ongoing year of the workforce is kind of what we heard. I think it was Mike Griswold from Gartner that may have coined that first with us. Right? I think you’re
Greg White (13:19):
Right. Yeah, I think you’re right. But
Scott Luton (13:20):
We’re, we’re gonna steal it because it’s so true. So we’re just, ’cause we can
Scott Luton (13:24):
<laugh>. That’s right. That is right. I wanna shift gears over to an industry maybe that we don’t talk about enough here. Although Greg, we do, we’ve had that ongoing healthcare supply chain leadership series, which has been really popular. So I wanna talk about this when we talk about the year of the workforce as it applies to healthcare. So Kaiser Permanente one of the biggest healthcare providers in the us Well that’s not immune to the ongoing turmoil across the workforce market. Some 75,000, 75,000 Greg healthcare workers across five states plus Washington DC mm-hmm. <affirmative> are set to walk off their jobs this Wednesday. If Kaiser Permanente cannot reach a deal with a handful of representative labor unions, the strike is planned to last just three days. And it would be the biggest single strike in US healthcare history. So, while the automotive industry strikes perhaps get more headlines, the labor issues in the healthcare industry certainly have been widespread.
Scott Luton (14:17):
In fact, I didn’t know this, Greg, since the beginning of 2022, a third of all labor strikes involving more than a thousand workers have been in the healthcare industry. Wow. Kaiser Permanente, in acknowledging the issues, stated that more than 5 million healthcare workers left the industry in 2021 and 2022. And the company also says that up to two thirds of current healthcare staff, while they say they are burnt out, now of course these healthcare industry issues will certainly further complicate the ongoing workforce challenges we have across the global supply chain industry. Greg, especially in these five states plus dc. Greg, your thoughts here on what is set to transpire with Kaiser Permanente?
Greg White (14:59):
You know what their primary complaint is? Which one? There aren’t enough workers. Mm. So don’t you love the irony of 75,000 people going on strike because there aren’t enough workers? And why aren’t there enough workers? Because in 2021 and 2022, more than 5 million healthcare workers feared for their safety. Largely, I mean, and left the workforce never to return. So not unlike the great resignation of that time period, overall, so many people left the workforce that now were left with fewer and less experienced. And inarguably, in my experience, which I’ll talk about in a second, inarguably less capable people in the industry. Mm. My dad spent 24 of 31 days in the hospital recently. And recently the level of care that he was getting was frightening. I mean, it was absolutely frightening. The ineptitude that he was, he’s a diabetic heart patient patient and was supposed to have a very specific diet. And they talk about the people you know in the, in the kitchen who have to make sure that this happened. Seven out of 10 meals were incorrectly prepared for a diabetic Wow.
Scott Luton (16:09):
Patient.
Greg White (16:10):
So it’s a real problem. I’m not sure that striking is the answer, but if that’s what it takes to get these companies to do it. But the fact is, there aren’t more healthcare workers to take these jobs. We have to wait for people to get out of school. Hmm. Nursing classes are so small that at an individual university, a class may only have five to eight openings for nurses. Right. And the schooling is so long for doctors, obviously seven to 10 years that, you know, it’s not like you can manufacture these people overnight. And we did virtually overnight eliminate, or they eliminate, they opted out 5 million people. So it ain’t coming back soon. No matter what you do in terms of a strike. I’m at a loss. I empathize. Definitely empathize with especially the competent nurses and doctors that are out there who stuck it out through covid, you know, and and fought burnout and probably continue to fight it every day. I, I don’t know how to handle it, but it’s a very, very difficult situation. Right.
Scott Luton (17:08):
So. Right. Um, and just adding a few other notes and observations, I would argue, I don’t have the statistics right in front of me, but with the population dynamics, I would argue that demand of course is not gonna go down anytime soon based on generational dynamics. And then the other thing that, you know, the pandemic and general business environment has caused a lot of these rural systems to go under rural systems. And in some cases, like here in Atlanta, we’ve seen metro providers go under the
Greg White (17:34):
Largest trauma center in Georgia. Correct. Scott went under,
Scott Luton (17:39):
I think you’re right.
Greg White (17:40):
Finally, they let it go under. I mean they’ve been keeping it afloat for decades now, but Grady Hospital just gone just like that.
Scott Luton (17:48):
I know we don’t typically talk about, you know, healthcare central topics, but we see this, at least I see this as so connected to what I’ll call the general welfare of the workforce in supply chain. I think it’s something certainly we should be keeping on our radar. So some of y’all may have been with us last week as we enjoyed a couple of folks from B C G Boston Consulting Group on last week’s Buzz and Constantine sat in for Greg who was on assignment, I think we called it Greg. We talked about some of the new e-commerce, not new, but couple that were on the grow, right. That were competing with Amazon in different ways, including like longer delivery times, like catering to the crowd that don’t care to get something the next day or something. They wanna pay cheap and they can wait. Mm-hmm. Mm-hmm. <affirmative>. Well Greg, I completely missed that. My daughter was a current customer for one of these sites. I wanna say maybe, is it Shine?
Greg White (18:37):
There is a company called Shine. Yeah.
Scott Luton (18:39):
I might be getting my wires crossed, but it was right here. Yeah. Shine ss h e i n. And I miss the opportunity, Greg to interview my oldest daughter and get her experience with this Amazon competitor. So you never know what’s right up under our nose, huh?
Greg White (18:54):
Yeah. Well, I mean it’s, it’s always there. I may have done a little bit of shopping on various sites. Yeah. This weekend I’ve gotten quite lazy. I can’t lie <laugh>, I went to a Costco this weekend and it was, I mean the amount of anxiety that I felt at that Costco was unbelievable. It was packed, chopped full of people. Wow. At nine 30 in the morning, which is when they opened the doors. Nice. It was like the rush into a Taylor Swift concert. <laugh>. I just have to mention Taylor Swift every once in a while because Scott is so tired of hearing about her <laugh>, especially on football Sunday.
Scott Luton (19:30):
Alright, Greg, you open that can of worms. Lemme just say my family’s a big fan of Taylor Swift as an artist and I am too. However, as we were talking pre-show, can’t we just watch a football game and focus on the plays and not the uh, relationships?
Greg White (19:44):
You’re not wrong. Start. Yeah. You’re not wrong. I don’t care who your relationship’s with alone either. <laugh>, I don’t like hearing about Brittany Mahomes when we’re watching the Chiefs either, right? <laugh>,
Scott Luton (19:55):
Well, I show up for a football game and it’s like a, an addition of entertainment tonight breaks out. Yeah. That’s not, that’s not what I’m after. But hey, different strokes, different folks. Let’s get back to Greg. Now going back to the ai, which we talked about earlier. Big show Bob Bova says, gentlemen, it’s about value to the enterprise, to the stakeholders who is willing to do what it takes to be the positive change agent. AI is sexy right now because it is a change agent. It cannot replace though the creativity of a valuable employee at any level with constructive strategic value and insight. Gregory,
Greg White (20:30):
I think the Hollywood writers with the specific clause that excludes AI from writing for shows would argue that point, because they’re about to be put out, they could easily be put outta work by ai. And that nothing is more creative than writing quote except for CCBs shows. Nothing’s more creative, creative than writing a television show or a movie. Right. Well
Scott Luton (20:51):
I think if you think of Back to Hollywood, right, there’s lots of examples in supply chain. But looking at Hollywood, you look at Word got out, this has been about a month or two ago that, uh, that the Hollywood studios were looking to use ai, gen AI to create the extras in the scenes. Now, in my view, I’m not never set foot in that industry. I’m respective of all parties. But in my view, that’s eliminating some of the just transactional stuff. And it seems for me, it seems like a natural application for gen AI in that industry. Much like in supply chain, we’re talking about eliminating manual work. You know, that for me, those are very closely related. But Greg, your thoughts,
Greg White (21:31):
What’s like the great John Henry versus the locomotive debate, right? Mm-hmm. I mean, people get really, really afraid when they realize that they’re low value whatever job is at stake. And if they don’t have the confidence to do something that’s more high value, they’re gonna fight hard for that low value job. UAW is a great example of that. I wouldn’t say low value, but easily replaced now with automation and ai and likewise the Hollywood writers. So it doesn’t make it true just because we say it. We know that AI can do creative, insightful, and strategic things, right? But there are still things that humans can do, right? That AI can’t. Right. But we shouldn’t kid ourselves be blind to the fact that AI will do will and in relatively short order will do, do things that that humans would do otherwise. We’ve already had AI in our business replace an entire human being. Right? Right. So good point. What we have to recognize is where we add value to Bob’s first point, right? It is about adding value. If we don’t add value by doing repetitive things with a wrench, machines should be doing it. And we should stop desperately clinging to these jobs that are of so little value for such a high cost.
Scott Luton (22:50):
So perfect opportunity. I wasn’t sure, I’m glad you mentioned exactly that because in my mind, so folks, if you’re any baseball fans out there, especially maybe in a Gen Xer like, uh, me and Greg, you may remember the pitcher of Tim Wakefield. Yeah. Right? Tim Wakefield unfortunately passed away yesterday at the age of 57 Now, but this is where it’s relevant beyond. He is one heck of a player that also served his community tirelessly, endlessly. A great teammate won 200 games in his career. But here’s where it’s relevant because what Greg just touched on there, humans have to be, especially in this era, they’ve got to be open to embracing new skill sets, especially when it comes to survival. And here’s where the Tim Wakefield story comes into play, because he was a home run hitting first baseman. Right? That’s what he got drafted to do.
Scott Luton (23:35):
Play first base hit home runs. But a scout told him when he was in double A in farm system that, hey, I hate to tell you, and I’m paraphrasing, of course I hate to tell you, but your bat and your glove glove ain’t good enough to go any further. Mm-hmm. <affirmative>. So Tim Wakefield took that critique to heart and said, you know what? I’m gonna learn a new skill. I’m gonna learn how to pitch and better yet, I’m gonna learning how to pitch to knuckle ball. So he put away his bat, put away his glove, leaned in wholeheartedly into learning how to pitch. And less than two seasons later, he was starting in a National League championship series against Tom Gln and the Braves beat Tom Gln twice with complete games. Yeah. And he went on after a couple setbacks like we all have, he went on to win 200 games and have his jersey retired for the Boston Red Sox, where he played the majority of his career.
Scott Luton (24:19):
Now, you know, these kinds of stories resonate with me. ’cause I watched him beat my team. I was really worried he was making appearance in the game seven of nine two N L C s. But the relevant thing here for all of you listeners out there is we owe it to ourselves and our loved ones to embrace our inner Tim Wakefields and not be afraid to lean into something new. That’s where we’re gonna find all sorts of opportunities to do big things in this digital economy, disrupted economy that we’re living in. Greg, your thoughts, and then we’re gonna move forward.
Greg White (24:47):
Well, I know you’re in the air force, but the marine motto, improvised, adapt, overcome. Right? I mean, that’s what we do. That’s what humans do. I mean, we shouldn’t be alive. We don’t have hair on our bodies, or at least not enough to keep us through cold weather. Right? So we create clothes and we build structures, right? So if we had just stuck to our original job, we would’ve been extinct eons ago. Or is it eras ago?
Scott Luton (25:14):
He
Greg White (25:15):
A long, long time ago. I mean mean I, I really empathize with people who wanna believe some of these things. They’re just simply not true. And I just would implore you not to dangerously delude yourselves to believe that AI can’t do so many, many things. I mean, well said. I, I think it’s important for us to embrace it. I think it’s also important, by the way, for us to identify boundaries for it. Right? But it can do many, many things that humans don’t wanna do, shouldn’t do. Just, let’s just pick automation. Forget about ai, just automation. Right. Or technology generally, whatever you want to call it, can do so many things that humans shouldn’t do. Dangerous. Right? Right. That are dirty, dark, and dull. Right. But now it can also do those, I can’t think of a D word for intelligent things we can do but aren’t the best suited for because we’re not consistent enough. We have emotion to get in our way. All those sorts of things. All of those things that apply to straight logic technologies also apply to AI technologies. And they’re just gonna do it better than straight linear logic technologies do.
Scott Luton (26:23):
So if Greg implores you to do something, hey, do it. Lean into the new opportunities out there and don’t rest on your laurels that you believe what you do cannot be replaced. That’s not a good way to approach life. Bob Bova says, I’m very interested to see what some long-term studies show about the efficacy of AI still really in its infancy. When does it become a rote technology without the ability to be humanly creative? Wow.
Greg White (26:50):
AI’s been around since 1952. It isn’t in anything but its infancy. Mm-hmm. Right. We have finally created the processing power to be able to use it to its full extent. And with generative ai, right. And with Laura, these low risk alternative learning techniques, it learns virtually like a human, it’s moved well beyond rote items. You can’t write a research paper using rote. Right? Right. Just rules. Rules and Right. Rules and, and standards. You can’t do that. Mm-hmm. <affirmative>. So it’s well past that
Scott Luton (27:23):
Right now though, Greg, I’m gonna act like I did not struggle with all things accounting or economic related in college. Goodness gracious. I’m glad you’re good with math. Third story today, let’s share some economic news. According to Market Watch, the US economy grew at a 2.1% pace in second quarter 2023. Consumer spending though came in a good bit weaker than expected. And of course that’s one of the key factors. Maybe the key factor behind the economy. But on the other hand, business investment like money spent on plants and equipment. Well that was a little bit stronger than expected inventory levels. Greg also showed an increase. Folks getting ready, uh, peak current predictions for third quarter is a 4% increase in the US G D P man. That sounds ambitious. However, trouble may lie ahead as indicated in perspective shared by Chris. I’m gonna say Zach. Yeah, Zach. Zach Zachar, I bet it’s Chris Zachar, chief Investment Officer at the Independent Advisor Alliance. Said quote, we believe that a recession is inevitable. But we have been surprised by the resilience of the consumer. End quote Gregory, put on that Chief economist had of yours. What’s your take?
Greg White (28:34):
Okay. Just to be clear. Not an economist, but equally as accurate in predicting recessions and economic growth. Okay. Which is almost 0% accurate. Uh, look, how long have we been talking about recession? How long have I been talking about recession? And it hasn’t come yet. And I wonder if people, and I would love to get some visceral responses to this, I wonder if people think that the economy growing at a 2.1% clip right now is, or four, if that’s where we think it’s gonna grow for the whole year. If they think that’s a good thing at this point. Especially since it’s mostly driven by increased prices. Right. And I mean, there’s some indicators in here that are encouraging because consumers have been driving inflation since whenever we started getting those three, $4 trillion worth of checks. Hmm. Right. Spending other people’s money. But I think we’re about to run out of other people’s money.
Greg White (29:33):
So that’s why we’re starting to see consumer spending come down. But now business spending is going up and that over the spending for the same period last year, it’s important for us to align that. So we can’t say that peak caused this because peak would’ve caused a similar uplift last year. Yep. Right. What really has caused it is the continually increasing prices. Five, four and a half, 5% inflation. Right. The rule of 72 says divide F, let’s divide five into 72. And that’s how often prices will double. Hmm. Right. So I can’t do math, I’m gonna do math
Scott Luton (30:10):
<laugh>
Greg White (30:12):
Because I, by accounting, but I understand economics as a, whatever you wanna call it, psychological, not definitely not a science. Uh, psych psychological or even economic discipline. Even calling it a discipline is giving it a lot of credit, isn’t it? Hmm. But yeah, I mean, I think we are gonna be challenged and it’s gonna be hard to have a soft landing, but we also know that these things are politically motivated and they’re trying to protect the current administration as they always do. Right. Especially with an election coming up. Although you never know. I mean, there’s some rumblings in the Democratic Party that we may just sacrifice our current president and try and find another candidate to run. And it looks like the Republicans will be epically weak in the upcoming election. So maybe they don’t have to do that. Some of these things when they work together, can be really, really beneficial to us. Just common people, right. If it looks like Republicans can’t win, we don’t have to protect the current, or we’re gonna sacrifice the current president and find a new one because we think you can’t win, then we don’t have to do all these conflagrations. We can just focus on the economy, independent of its political ramifications. More importantly on the ramifications on us, you, you folks out there and me.
Greg White (31:29):
So it’s a very difficult time right now because there’s so many conflicting influences and it has become so clear and apparent that this is as political as it is economic. So that makes it even harder to predict.
Scott Luton (31:43):
Yes. But
Greg White (31:43):
Four, four and a half, 5%, whatever you wanna call it, inflation is not sustainable. Mm-hmm. Right. We have to get down back down to that 2% range.
Scott Luton (31:53):
I’m with you. And to your point you made a second ago, this is an example. We’ve all had the meetings in supply chain and manufacturing organizations where everybody brings their own spreadsheet and the data <laugh>, you know, everybody’s got their own data. This is an example, and I’m gonna point this out in a second because you see different agencies show different trends and different data, and we’re gonna point that out in just a second. Uh, Kyle says, prolonging the inevitable and the lasting impact of inflation is gonna last longer.
Greg White (32:20):
That’s true. That’s true. I mean, if we don’t hit recession, then these prices growing at 5% a year will stick, right? Mm. I mean, I use one indicator. I remember many of you might not. I remember the last, the great reception when I could get a Zaxby’s, probably not. Everybody knows what’s Zaxby’s sells chicken tenders. That’s all they sell <laugh>. Okay. Fries and other sides. But it’s, it’s a whole business built around chicken tenders, which has absolutely blown the doors off, by the way. Mm. But you used to be able to buy a big Zacks snack for 3 99. Now it’s $8. Wow. $8 or 8 49 depending on where, where you’re, where you are. So that to me is
Scott Luton (33:05):
Unsustainable. <laugh>. Yeah,
Greg White (33:07):
Unsustainable. I mean, it’s fast food, right? Right. Even McDonald’s made their one 10th of an ounce hamburger. Smaller, smaller than one 10th, sorry, one 10th of a pound. Right. One 10th of a pound, physically smaller. And the way that you can tell is they didn’t make the buns physically smaller. And now the burger doesn’t go to the edge of the bun. So you know that they’ve made it smaller. It’s tragic.
Scott Luton (33:28):
It is. All right. We’ve been promising this last story, Greg. I think this is a cool picture. And by the way, that is, there’s no sponsorship from dexterity ai. I just, I really like the photograph and the story. So our four story is reported by our friends at supply chain dive. Given all the workforce issues companies, of course they’re gonna find a way and they continue to experiment with ways to automate. Here. FedEx is collaborating with a robotics company named Dexterity ai. The focus is on using AI powered robots to load FedEx ground trailers and load them more efficiently. Might I add the testing process continues and is ongoing, no timeframe was given as to deploying this particular solution. But one other interesting nugget, and y’all check out this read, but I think we dropped a link in the check because as we were just talking about Right, the data showed more investment in business. We’ll check out this nugget from this article. According to the Association for Advancing Automation, robot orders, north America were down in Q 2 20 23 after record breaking purchases in 2021 and 2022. Alright, so Greg, your thoughts here, well,
Greg White (34:34):
I mean, this is what Gene was talking about, right? Is, I mean, think about how we’re using ai. One of the points that they make in this article is about the dexterity of these robots where they can put very slight pressure, tough pressure on it like a human would to get things to fit just perfectly into a small slot so that they can build a flat wall of boxes as they work throughout the trailer. So this is a huge advance. It’s a job nobody, honestly, no human could do. I mean, having worked for a retailer, having seen how trucks are loaded, it’s impossible. Impossible to think about all the things that could impact it. I think of this as kind of like Tetris in reverse. You’re trying to put the blocks in the right way, right? Not take them out or, you know, not Well, yeah.
Greg White (35:21):
It is Tetris, whatever. Anyway, um, I get, I’m, I’m always confused with Tetris and Jenga and all that stuff. Mm-hmm. But when you’re loading a trailer, as we all know, you want the stuff that needs to come off first on the trailer, right? You have to load balance the trailer. So let’s say the first or the very last delivery is a bunch of heavy stuff. You still have to work around that because you can’t have all of the weight over the axles, you know, all kinds of things like that. So AI can undertake all of these difficult challenges, these combinatorial analytics that humans simply can’t do and do it unemotionally and without mistake. So I also believe, by the way, to Bob BOA’s point, I think linear algorithms couldn’t do a lot of this as well and have done a lot of this. But the AI aspect of it, of learning, analyzing like humans do, humans, that’s enough room for this box to fit into.
Greg White (36:17):
Right? And next time I’ll know that although sometimes we as humans forget that AI never forgets, right? So this is a good example of, of the use of this for a job that humans simply have done. They have done for a long time, but simply can’t do effectively enough. Mm-hmm. And probably don’t wanna do, because if anybody’s loaded trailers on a loading dock, guess where the hottest part of any warehouse is a trailer out in the sun on a loading dock. <laugh>, right? Or coldest. Right? The worst weather is in a trailer that’s being loaded.
Scott Luton (36:51):
Excellent point there. I have loaded planes in the Air Force by the way. Wow. But I, which is a whole different thing than this. Talk
Greg White (36:58):
About critical weight distribution and aircraft, right?
Scott Luton (37:02):
Well, I wish I could claim to have the smarts to figure all that stuff out. They said, put it here and put it there and I put it here and put it there.
Greg White (37:09):
Somebody figured it out, didn’t they? Someone
Scott Luton (37:11):
Did. Yeah. Loadmasters, absolutely Loadmasters are critical. And by the way, big shout out to Lloyd Knight, one of the coolest loadmasters. I know. What was I gonna say? Oh, I’ve never loaded a truck for some reason, Greg, what I have done way back as a kid is load hay in a barn. Oh my. Now of course, these are two different things, but folks, if you’ve never lifted the hay bale and never loaded and stacked up hay, man, I think I slept for three days straight. Greg <laugh> after that with my uncle Bill
Greg White (37:36):
Scott, we had a, we had a round top barn and we stacked it all the way to the top. And you can only push a hay bale so far when you know there’s only enough height for the to get through. So you have to get behind it. That’s why barns are round top, by the way, <laugh>. So you have to get behind it and pull it as far as you can. And then if you’re usually the smallest skinniest guy winds up doing that all the while by, by the way, breathing in microscopic hay, you know? Um,
Scott Luton (38:07):
Oh yeah.
Greg White (38:07):
Right. It’s just gross and it’s hot as Hades in there. And then you have to crawl out around. If it is not a job for somebody who does not like tight spaces and then you kick the BA in against the last row, it is absolute utter. And I know what I did to my great uncle that made him make me be that guy other than be skinny. But I really thought he me. I thought he wanted me to die there <laugh>, because it felt like it didn’t, it. I mean,
Scott Luton (38:39):
Oh, it’s tough work
Greg White (38:40):
Barns,
Scott Luton (38:41):
Tough work. And you know, look, we greatly respect all the folks out there loading trucks today. And, and there’s been with some outstanding leaders that have come up through the ranks. They started part-time basis loading trucks. But to Greg’s point, and definitely wanna spike the football on this, I think inevitably you’ve got workforce dynamics, workforce preferences, and it’s not necessarily opening up bigger and bigger pools to get that kind of work done. So this right pilot and the initiative by FedEx is the future, no doubt, as we look to automate and make more efficient the blocking and tackling that goes on across global supply chain. Well we highly value going back, you know, of course a human element. There’s some outstanding things where humans do it best. But again, this frees up the human element to do more exciting, more valuable things
Greg White (39:27):
Enlists painful, right? And yeah,
Scott Luton (39:31):
That’s a great point. Going back to the healthcare thing, that doing jobs that are less likely to get you hurt, right? Gina points out the food processing plants, pork, chicken, beef, talk about some dangerous situations, you know, slicing up, you know, carving up, harvesting these animal products. Man, lots of people get hurt. Mm-hmm. <affirmative>. And there’s some automation that we’ve talked about reported on here on the buzz that has, uh, made big gains in that industry. Okay. So Greg, we’re gonna wrap, you know, we were buzzing right along and then we went down a bit of a rabbit hole and we blink and we’re, it’s almost one o’clock. But you know
Greg White (40:03):
What I like about this show, what we can do that I hope, I hope folks are entertained by that, or at least informed, right? Or they’re laughing at us like these idiots cannot sit on top <laugh>, whatever. Right. Whatever, whatever. It’s, I hope it’s valuable to folks out there.
Scott Luton (40:18):
I do too. Okay. So Greg, we covered a lot of ground. We’ve invited folks to check us out in live programming the rest of the week. In fact, the whole month of October is jam packed full. Yep. It’s a cornucopia of supply chain leadership content. Alright, so Greg, yeah, one thing, what’s one thing that folks gotta keep in mind from today’s discussion and then we’re gonna sign off and get going.
Greg White (40:39):
I think adaptation is the most valuable of all human traits. We haven’t found the boundaries of what technology can do yet, don’t live in the past, don’t defend it for personal reasons or for lack of a forward-looking point of view, except that change will occur. It has always occurred. And those that adapt with it thrive and those that don’t get extincted. So yeah, that’s my thing is just we talk a lot about the human traits that technology can’t replace. Mm-hmm The ability to adapt, as you talked about the Tim Wakefield story is great. The ability to adapt at that level is a uniquely human skill. Use it. That’s
Scott Luton (41:18):
Right. That’s such an excellent point. Way to finish, you know, machines don’t say, Hey, you know what that scout says, I can’t hit baseballs at the major league level. So machines don’t say, I’m gonna pick up a knuckle ball. That is a uniquely human advantage. Folks, there’s a great business analogy there. You know, look for the opportunities when one door shuts. There’s all sorts of other opportunities. And especially in this technological environment, if you’re open to it and you lean into the change and disruption, there’s lots and lots of opportunities. And to where, you know, whatever the business version of getting your jersey, what do you think that would be, Greg? What’s the business equivalent of getting your jersey retired by the Red Sox?
Greg White (41:55):
I don’t think there is an equivalent. I mean, <laugh>, right? I mean, even arguably the best leader of I B M got to write a book. And even then people didn’t really appreciate what you did. So <laugh>, um, I don’t think there is an equivalent, but just don’t worry about your jersey getting hung up. Just worry about you getting hung out to dry and make it.
Scott Luton (42:16):
Oh man. Okay, that’s good. We’re gonna have to leave it there folks. And of course, rest in peace to Tim Wakefield. I will forever remember starting with the 92 N L C S 20 Braves and the Pittsburgh Pirates. We tracked him throughout 200 wins, 200 wins in that career. That is remarkable. Folks, hopefully you enjoyed today’s session. Big thanks to Amanda and Catherine behind the scenes helping to make it happen. Big thanks to all of y’all that tuned out and brought your, not only a Turkey sandwich, but brought your point of view and perspective. Love that, Greg. Always a pleasure knocking out these shows with you.
Greg White (42:46):
Likewise. Yeah, thank you. I enjoyed it. And thanks to all you out there, I love keep those comments coming. We may not agree, but we’re always pointing the same direction.
Scott Luton (42:56):
<laugh>, right? Well said. Well said. All right folks, hopefully you enjoyed today’s show. Hopefully you’re gonna take a nugget of something that was discussed here today and put it into action. That’s the name of the game, deeds not words. Lean on those new opportunities. And with all that said, Scott, on behalf of our entire team here at Supply Chain now, Scott Luton challenging. You do good, give forward and be the change. And we’ll see you next time. Right back here at Supply Chain now. Thanks. Bye.
Scott Luton (43:24):
Thanks
Intro/Outro (43:25):
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