[00:00:00.360] – Speaker 2
Stefan, David, it’s the start of the new year.

[00:00:02.980] – Speaker 3
It’s still the end of the week.

[00:00:04.500] – Speaker 2
It’s the end of the week, the end of week one of 2025. And Stefan, I have to say, I know you’re in a different time zone and a much sunnier climate right now, but Christmas is over and it’s time to get busy.

[00:00:19.240] – Speaker 1
Oh, my God. Sorry about that. I thought we were still celebrating Christmas. Sorry. Here you go. Hi, guys.

[00:00:29.120] – Speaker 3
That’s actually any holiday stories you want to tell?

[00:00:34.480] – Speaker 1
Snakes and scorpions.

[00:00:37.840] – Speaker 2
This really was one of the best holidays ever. So we’re going to do what? We’re going to talk about Trends. Some trends in 2025, what we think are our stories to think about and keep an eye on. So David, do you want to get us kick started?

[00:00:54.560] – Speaker 3
Yeah. Yes, absolutely. So one trend that that struck me and probably struck everybody is around the change of administration in the US, where it is not just apparent, but evident that through trade policies and tariffs, this administration is going not just to influence, but is working towards modifying global supply chains in a way where manufacturing can be brought back into the US because of those policies having a significant impact on what things cost for the Americans. So Is it a trend? I don’t know, but it’s definitely something that is going to bring… Companies will have to adapt and modify their supply chain in a way that the flow of goods are going to be somewhat altered for given supply chains.

[00:02:03.140] – Speaker 2
I’ll just before, and then we’ll let Stefan get in on this. I mean, yes and no, right? It depends. You can’t just spin a supply… Every supply chain on a dime overnight. Anything that involves capitally-intensive manufacturing, it’s going to take years before you can make adjustments. But there’s no question that that should be. It is foremost I know just before the holiday break, actually, even before Thanksgiving, the CEO of Lowe’s was talking about precisely how they are thinking about with their key suppliers, how they’re thinking about tariffs and how they’re going to plan accordingly. Because the lazy, quote unquote, thing to do is just to accept what ultimately is a higher pricing, to compensate for those for those tariffs. I think if you’re in a light manufacturing or capitally non-intensive manufacturing, you will have options to maybe move your supply chain around accordingly, try and take advantage. What we don’t know is, are the tariffs going to be global? Are they going to be targeted? We’re sitting here, not you, Stefan, you’re very lucky. You’re sitting in Arizona. But sitting here in Canada, will Canada be sub subject to tariffs or not? My guess, I’m only guessing, is probably not for the reason of not a will, but the new administration has talked a lot about water.

[00:03:45.510] – Speaker 2
And the last is power, because in this coming age of massive computational needs, Canada is an energy superpower, both both in non-renewable and renewable energy, especially here in Montreal, where we are basically the Saudi Arabia of hydroelectricity on planet Earth. And data centers and computer centers need that access to abundant cheap power. So it’ll be really interesting to see, is it very targeted? Is it broad? Is it broad with major exceptions? And to our European listeners and elsewhere in the world, we’re very sorry, but it has been for hundreds of years now, the Canadian privilege of probably earning an exemption from the harshest aspects of that new trade policy. But Stéphane, you’re down there. What are you thinking?

[00:04:47.830] – Speaker 1
Well, I think if I see that the trend in 2024 was all about AI, and I think that’s understating it, I want to say that 2025 is going to be about information because I think that in 2024, we realized, and that’s what I’ve heard through to various people I’ve met, that we realized in 2024, more that AI is great. Ai is going to help us grow, but we need better information. Information data gathering, getting Getting the right data is… I know we’ve been talking about it. I mean, if we find an old webcast or a VHS tape of mine in ’82, talking about what’s the trend for ’83, it was probably data gathering. But I think it’s more than ever. We hear people talking about their solution, their ERP system, WMS system, TMS, OMS. A lot of systems Now, they got to be feeded properly. I think 2025 is going to be the year where we share and get better data.

[00:06:15.280] – Speaker 3
Okay. No, I was just going to say, because we often joke among ourselves that everything is AI-powered, right? Every single thing in our industry is now AI-powered, which some are, some aren’t. And the definition of really what AI is in that context can sometimes be blurry for most of us. But I like what you’re saying where if AI has done anything is shed the importance on information and the need to have quality information and to manage information and data properly. If it has brought something that is very valuable is to shed on this very important topic, nothing new there. But if it does set a fire under some organizations to have momentum in changing or adapting the systems or anything that pertains to their data, that in itself will be a huge benefit.

[00:07:23.410] – Speaker 2
I just find it funny, of course, Stéphane, what you say about VHS tapes. I do remember, of course, back in 1999, when people would have said, yes, we got to get better information. Some people might think it’s almost like the myth of Sisypus. Every time you think you’ve rolled the boulder to the top of the hill, the boulder rolls down and you start all over again. But it’s genuinely true. I had a conversation with Matt back in 2024 on this podcast about the difference between integration and interoperability. So when two systems are integrated and when two systems are interoperable, and the difference is really about two interoperable systems pointing to the same data source, the same database, versus two systems that are integrated where they both have their own databases, and one is populating the other, and the other is populating the other, which inevitably means Errors. Well, errors or lags or record inconsistency at any point in time, the longer you go away from a refresh on either side, the more that the databases aren’t the same. So now when you look at what Stefan is talking about and you’re listing the myriad different systems to run a supply chain, and when you think about all of them having those disjoints in in databases, right?

[00:09:01.770] – Speaker 2
Minute, but compounding because there are just so many different databases that are all trying to accomplish one coordinated thing. I mean, just that alone, it’s still a massive mission for us in the supply chain to get to that perfect information situation where the quality of data is good and the timeliness and accuracy based on the timeliness is good. I think it’s a That’s a huge issue.

[00:09:32.280] – Speaker 1
Great. Yeah, absolutely.

[00:09:35.400] – Speaker 3
What about your trend?

[00:09:37.570] – Speaker 2
Well, it’s just so interesting. Just before the break, I was in Chicago having a meeting with some very lovely people. If they’re listening, I hope to have many more meetings with them over the next four months. But whatever happens, happens. That’s the life of a consultant. You win some, you lose some. But anyway, We were talking about automation. We were talking about just we got on the topic of autonomous mobile robots, but specifically forklifts. They were saying, as we know and they know, these things are still very slow. And like a rule of thumb, you probably need three of them to replace every manned forklift or driven forklift just to get the same output in an hour. And so you can see people are disheartened. When is this going to happen? When is it going to speed up? Now, at the same time, and for the younger listeners, I am an old man, so I’m entitled to a slightly nicer car in the second half of my career. So I just acquired a nice car, very modest, nothing extravagant, but a nicer car. And this thing parks itself. It’s not just… It parks itself in any way you want.

[00:11:04.010] – Speaker 2
It parallel parks, it backs in, it forwards it, it does whatever you want. I am stunned how quickly from when I push my park it yourself button to when it parks. I remember I saw one of those self-parking cars four years ago, and it was cool. I mean, amazing, but it was slow. Now I push the button and the steering wheel starts spinning, and I almost get nervous like I’m about to be on a roller coaster. It’s still slow enough, but I’m amazed with over four years how much more productive, from our perspective, that self-parking function has become.

[00:11:51.100] – Speaker 3
As fast as you would?

[00:11:52.680] – Speaker 2
Or almost? If I’m trying not to scratch the car- As a good driver? If I’m trying not David, he’s a mining engineer.

[00:12:03.600] – Speaker 1
He’s a mining engineer. Come on.

[00:12:06.450] – Speaker 2
Rock, rock, rock. It reminded me of that old adage, We under We overestimate what we can accomplish in a year, we underestimate what we’ll accomplish in 10 years. And I think one thing is the major goal is getting… If we can get that forklift productivity up on the unmanned forklift, which I’m telling you, if my car can do it, so can these forklifts, I think that would be a huge, huge transformative breakthrough in the industry. I know I’m saying, I’m predicting, we’re just around the corner.

[00:12:53.250] – Speaker 3
Nice. Well, yeah, because to justify such investment at some point, there’s We’ve talked so much about labor shortages, and therefore, that is a key driver to automation. But also, as you said, there’s a productivity threshold that has to be met in order for companies to invest.

[00:13:16.270] – Speaker 2
Yeah.

[00:13:17.190] – Speaker 1
Yeah, the true- Any thoughts on that? Well, the true put of automation is certainly going to increase over time with those rates being better and better. Just like US did years ago, look at how fast they go now. But if you look at other technology like AMRs or AGVs, they’re much slower. In fact, they’re slower than somebody walking with a cart or then a lift truck. But of course, they don’t eat anyone. The first few years, we’re all about gathering information, getting that information, and security around it. Well, now that we’ve achieved that, let’s crank it a little bit, and that’s where we are.

[00:14:13.210] – Speaker 2
Actually, I think that’s a really good point. If you think about it, of course, you’re operating… Because nothing would kill a technology more than a fatality or a massive accident that injures someone permanently. So you imagine you put all sorts of guardrails around the way a vehicle can guide itself autonomously through a warehouse. But to your point, you’re collecting enormous… Like the Tesla cars that are just hoovering up data constantly, well, so have these AMRs. Now we’ve got a critical mass of data, of information that we can use to sharpen or speed up and relax some of the rules. Because, again, my car is certainly making sure it ain’t hitting nobody when it backs up into a spot, and it’s still able to perform faster than these fork trucks. So that opportunity is there. Just need Maybe we need someone in Silicon Valley to go over to Raymond and Crown and help them with some of the programming. Who knows?

[00:15:22.560] – Speaker 1
We’ll see. Absolutely.

[00:15:24.650] – Speaker 3
I think we jump very quickly on the trend on the US administration trend. I think when you ask Stefan for his opinion, you went to his trend. Which is great. Yeah, which is great.

[00:15:38.540] – Speaker 2
What did we miss?

[00:15:39.810] – Speaker 3
Well, because I think you said something interesting, where because you don’t on heavy capital-intensive manufacturing, it’s not something you can change overnight. No. It will take time.

[00:15:52.930] – Speaker 2
Can I give you an example? Yeah. Okay. China has more steel manufacturing. We’re in the racking business. China has more steel manufacturing capacity than the rest of the world. And China has practiced, understandably, what people would call steel dumping. In other words, offloading, keeping the factories running and offloading that steel at an unbelievable price that other people can’t compete with. Now, it is fair from the US perspective to say, Hey, it’s not my problem that you weigh overbuilt your capacity. And I should not endanger my steel industry for my steel industry capacity, which is a strategic national interest, to keep your steel factories running and you absorb the capital losses that you’ll have to absorb because you’re dumping steel. So you have to create a barrier. But you put up a trade barrier on steel You can’t just move a steel plant. No, no, exactly. Or the coal and iron mines required to create the steel. Those are massive billion, billion on billion dollar investments. Very different than clothing. And I don’t mean that… Look, the folks in the apparel industry, there’s capital costs there. I’m deeply respectful of it, but they’re not the same thing.

[00:17:27.260] – Speaker 2
So there’s some industries you can You can consider shifting overnight in reaction to a tariff, and there are others you can’t. Yeah.

[00:17:36.800] – Speaker 3
And by no means am I even an expert or fully understand the tariffs, the world, or how you develop all these, but does it have to be progressive? Because on one end, you impose that this has an impact. The idea is to generate a change in behavior of your organization. But if that behavior, with all the willingness, still takes massive investment and time to put in place, what is this interim period or this in between where you may not have access to cheap raw materials or other goods while you are implementing changes in your own supply chain, that can also, I don’t know, potentially have perverse effect to the folks in US and/or North America.

[00:18:31.230] – Speaker 2
Yeah. Where they have a choice and they can go to a cheaper option, they’ll just do that. Where they don’t, they’re going to suffer through a period of higher costs, input costs And then as the capital investment cycle swings, they’ll eventually try and move from high cost jurisdiction to lower cost or all things being equal to safer jurisdictions, what they consider safer jurisdictions. I mean, one of the things that we have to appreciate, right, is having a manufacturing skill set, just a generalized manufacturing skill set. Every nation, to some extent, should want to have that skill set. So if you do hollow out your manufacturing base and trade it away with the world, I can understand the argument that says we would to retain some strategic capability around that. There’s no question that the people who know best how to make an iPhone do not live in the United States as an example.

[00:19:40.790] – Speaker 3
Well, it’s fun just to tie it now to AI. Then it’s the AI chips. That’s exactly what the US is doing now. Exactly. To protect itself.

[00:19:50.170] – Speaker 1
Right here- To retain and retain. Sorry. Right here in Arizona right now is being built what’s going to be the largest semiconductor chips in North America. It’s a major… I mean, it’s a city by itself. I drove by the other day. It is a city. Huge.

[00:20:15.920] – Speaker 2
I drove past it with Stéphane a month and a half ago. No, no, no, no, no. September. Yeah, a few months. September. It was months ago, a long time ago. But yeah, it’s It’s an incredible site. It’s a massive, unbelievably massive construction site. It’s very millions of dollars going into it.

[00:20:38.380] – Speaker 1
To tie it to David’s comment, it started years ago, that near-shoring, that manufacturing back into the US, same with Canada. I think it will only increase now, and our supply chain will have to be agile enough I like it because it ties really well with information because to be agile, what do you need? Well, you need information. You need to know that it takes a month to get it from point A, and it takes only 22 days if you get it from point B. Yes, it costs more, but you’ll get it faster. So your inventory can be a bit lower. So the return is there. So I think a lot of that is going to have to do. A lot of that changes, a lot of those changes over supply chains are going to have to do with us sharing that information between each other. So manufacturer with distributor, distributor with retailers. I think that’s… Finally, we’ve been talking about it for so many years. I think that we’ll finally get to a stage where we have to If, I’m not going to say if we want to survive, and I’ll say it, but if we want to survive in that supply chain jungle.

[00:22:11.500] – Speaker 2
To me, that’s the perfect way to end this, to And this podcast with Stefan’s very scary… No, but it’s exactly right.

[00:22:24.700] – Speaker 3
All right.

[00:22:25.770] – Speaker 2
It’s survival. Look, Stefan, I love remote work, but the Santa Claus hat makes me worried. So hopefully we’re all getting back to work. Now that it’s a new year, let’s have a great one. I hope you’re all doing well. You guys… Well, I won’t see you, but we’ll talk on Monday.

[00:22:48.330] – Speaker 1
Okay. See you guys. Thank you very much. Take care. Bye now.