Quick Thoughts from ISA24

The Industrial Supply Association held its annual spring convention April 15-17 in Charlotte, NC, where hundreds of attendees from industrial distributors and manufacturers gathered to support, learn and network from ISA’s namesake channel, and the group once again delivered a great event.

MDM’s relationship with ISA goes way back, as Rusty Duncan — MDM’s publisher for eight years in the 1990s — was the president of ISA’s past iteration, I.D.A., in 1989-1990.

This was my seventh ISA spring convention — the most of any industry event I’ve been to — and it’s always served as a great networking event to connect with executives in the industrial MROP channel that comprises much of MDM’s core audience.

Over three days, attendees had plenty of opportunities to absorb industrial supply channel education, conduct business meetings via the event’s expo, and network at various social events at and around the Charlotte Convention Center.

Along with a booth on the expo floor, MDM brought a whole team of representatives, which allowed us to have a wealth of conversations about both what MDM is up to on the editorial side and at MDM Analytics. The latter involves the pending 4.0 launch of our Market Prospector tool — a state-of-the-art benchmarking tool that enables distributors and manufacturers to size their market and benchmark their business analytics to identify opportunities by industry and by local geography. Stay tuned for news on that front.

Plenty of attendees were also curious to hear about the ongoing integration of MDM into the National Association of Wholesaler-Distributors (NAW) since it was originally announced on Jan. 18, so we enjoyed sharing updates from that.

Our ISA representation of course included Tom Gale, who was honored in grand fashion with the association presenting him on-stage with the annual John J. Buckley Lifetime Achievement Award. The accolade was in recognition of Gale’s longstanding service in the industrial supply channel, and you can read my full writeup on that here.

Here, with the event fresh in mind, I wanted to provide a rundown of what I found to be interesting tidbits from ISA24, common discussion points, quotes or things that I was just compelled to jot down as the agenda proceeded.

Economic Outlook

With numerous publicly-traded distributors and manufacturers reporting financial results for their latest completed quarter (January-March for most), ISA24’s timing was great to have renown economist Alan Beaulieu back to provide an economic outlook. Beaulieu acknowledged that most industries that ISA members sell into are experiencing a mild business decline that’s expected to last through 2Q24 before conditions improve for the second half of the year, followed by a better 2025 — which is what the MDM Forecast likewise projects. Beaulieu maintained his longstanding forecast for an economic depression that will begin in 2030 and last well into 2036.

Other notes from Beaulieau:

• “Find a way to deal with pricing pressures on a regular basis for the next decade, but you can still be profitable. It’s about adjusting to a different economic reality.” 
• “Don’t be afraid of the inflation that’s coming, but understand it’s unstoppable.”
• “The last thing you want to do is borrow money at the end of this decade, or sell yoru business. Sell it in 2024-2025-2026. It will be harder later and you’ll get less than you think.”

Alan Beaulieu, President of ITR Economics, just stepped on stage at #ISA24! Alan is sharing invaluable insights, breaking down the trends for 2024 and 2025, and preparing the audience for success in the coming years… pic.twitter.com/jtUVHrcM8p

— @ISAssoc (@ISAssoc) April 16, 2024

Sales Transformation

Gale, Indian River Consulting Group’s Mike Marks, ProfitOptics’ Nick Pericle and LINC Systems Joe DeMarco held a “Sales Transformation for Channel 2.0” session to kick off the Day 3 agenda at ISA, walking through the channel’s transition from a legacy outside sales process to a stronger hybrid model that integrates inside sales, digital channels and defined team roles.

Some notes from that session:

• “Digital Transformation is never done. Distributors say all the time that ‘We’ve gone through a digital transformation,’ which suggests they consider that transformation as complete. 
• “Continuous improvement is better than delayed perfection.”
• With all of the data available to them, salespeople should never have to make a cold call. 
• Relationships and trust still matter, but they are no longer sufficient to win or maintain business. Salespeople have to bring something to the table.

Technology

Of course, any industry event today is going to have plenty of discussion on technology, and that has been supercharged by the explosive growth of AI over the past several years due to the 2022 launch of Chat GPT. But as MDM’s research and discussions with countless executives have indicated, while there is a ton of interest in AI from distributors, there is far less application. From what we’ve seen and heard, most distributors are still in a ‘wait-and-see,’ ‘watch-and-learn’ phase that often follows a technology hype cycle.

Here are some things I picked up on during ISA on the tech front:

• There is a considerable gap between executives who believe their company pays attention to employee’s needs when introducing new technology, and employees who feel the same.
• It’s helpful to have individuals who are both technology-minded, but also operationally customer-centric. This helps achieve technology goals.
• “The channel is really struggling to keep up with the pace of change when it comes to technological advancements. 2010 saw the evolution of Industry 4.0 with AI, IoT, etc. Last year we were already at Industry 5.0, which is cobots and that sort of thing. Most distributors haven’t even gotten to the cloud yet.”

Culture

Whether it was in sessions featuring distributors or manufacturers, the featured keynote speech by hockey legend Jim Craig — best known as the goalie on the 1980 Olympics gold medal-winning U.S. men’s hockey team — or just in casual conversations with attendees on the expo floor, culture was a major point of conversation. Everyone seemed to agree that the culture an organization has is critical to its ability to recruit and retain talent, especially in the new normal where talent management is more challenging than ever.

Here’s a few tidbits I heard on that:

• “The only competitive advantage that is sustainable is your culture.”
• “You want people to belong to something that’s bigger than they are.”
• “Culture is not people. It’s people and something else.” 
• “High-performance people fail more frequently, but not as catastrophically (as lower-performers). They don’t get defeated by failure, they get energized.”

Regulatory

ISA24’s Day 3 luncheon featured a conversation between ISA CEO Brendan Breen and Brian Wild, the Chief Government Relations Officer at NAW. They touched on the state of politics in the U.S. and congressional ineffectiveness when it comes to passing legislation, as well as where political infighting is taking place. But more importantly, Wild touched on a handful of key regulatory issues that are currently up for legislative vote in 2024 or 2025, or are just top-of-mind because they figure to directly impact the industrial supply channel. Those issues discussed, amongst others, included:

• The OSHA Walkaround Rule – set to go into effect May 31
• The Department of Labor’s Overtime Rule
• The Department of Labor’s “Heat Rule”
• Chevron deference

Brian Wild, Chief Government Relations Officerat National Association of Wholesaler-Distributors, and Brendan Breed, CEO of ISA, are on stage right now at #ISA24! Check out some pics from the Legislative Luncheon… pic.twitter.com/zUh8ymzooD

— @ISAssoc (@ISAssoc) April 17, 2024

More to Come from ISA24

Stay tuned for more MDM coverage and insights from the ISA24 event.

Next year’s ISA25 event is set for March 31-April 2 at the expansive Gaylord Opryland in Nashville, TN.