Finals Week And Campus Tech

Intro & Outro 0:00

Welcome to Tennessee on Supply Chain Management, where we unpack the drivers shaping today's global supply chain. From innovative ideas to real world solutions, each episode brings you insights from the leaders charting the course for our discipline. Now here are your hosts.

Tom Goldsby 0:18

Hello and welcome to another edition of Tennessee on Supply Chain Management. We're thrilled to be coming to you. Hey, it's a finals week edition of the Tennessee on Spludge. Also, we can go ahead and look forward, say it's a graduation week here on Rocky Top. I'm Professor Tom Goldsby coming to you today, and I'm pleased to be joined by my good friend Dr. Ted Stank. Hey Ted, how you doing?

Ted Stank 0:41

Hey, Thomas. I'm doing great. Thank you. I am on campus here, and it definitely has a finals week feel to it. As I look out the window, there's less and less students every day. Campus is starting to feel like what it feels like in the summertime, which is always a good thing.

Speaker 1 0:56

I thought, you know, when you were saying that, I thought maybe the wheeled robots were working overtime. So for those of you that don't know, you know, we've got those Starship six-wheeled robots that deliver food and beverage to lazy students and faculty and staff in some measure. Are you seeing them roll around campus today, maybe in greater measure?

Ted Stank 1:16

No, actually lesser measure. And I think it's a function of, like I said, every day a certain percentage of the student population takes off and goes home, I think.

Speaker 1 1:25

So well, more and more of our exams are being delivered remotely. I know I'm teaching that big intro to supply chain class this semester. And hey, so long as you've got a reliable Wi-Fi, you can take it anywhere. So long as the Canvas system is up and running, which I guess the hijacking has cleared. I guess the payment has cleared, and we're now, along with 8,000 other institutions, back up and running on Canvas. So that's a good thing.

Ted Stank 1:50

Yeah. Yeah, Todd's Canvas got hacked last week. Well, you know what? Here, I just invoked Todd. Tom, why don't you introduce Todd before we invoke him in this?

Introducing Todd Stefan

Speaker 1 2:00

We just can't wait, can we, to bring Todd into the conversation? We are joined by our dear friend and collaborator Todd Stefan. Todd is with KBC Advisors, has been a longtime personal and professional friend of Ted, mine, and the Global Supply Chain Institute. And Todd, are we reaching you in the Chicagoland area today?

Speaker 2 2:20

Yeah, I'm up in Wisconsin, but okay.

Speaker 1 2:23

Just across the line there. But that's right over the border, yes. Yeah, yeah. You got a great setup there in southern Wisconsin, I guess is maybe what we ought to call that. But like I said, Todd's been a good friend of ours for a long time and he's changed his affiliations over the years, but he has remained a steadfast supporter of what we do here on Rocky Top, a member of our advisory board, and just a major contributor to everything we try to accomplish here. So thank you, Todd, for joining us. It's long overdue, in fact, that you're finally making your maiden voyage here on the Tennessee on Supply Chain Management Podcast. Welcome.

Speaker 2 2:57

Yeah, Tom, thanks so much for the kind intro and great to be with you and Ted. Uh I echo what you guys said. It's been a phenomenal experience for me to get to know you both over the years and be a part of the program down there, but really it's all about the people and just how much of a great experience I've had being down in Knoxville two, three times a year with you guys.

Speaker 1 3:17

So that's it. And so we always welcome Todd to Rocky Top for our advisory board meetings. He's usually uh also attending our forum events, which uh unfortunately I missed. We lost our biggest fan. My father passed away last month, and really appreciate Dr. Lance Saunders for stepping in and covering. And we recorded at the supply chain forum. Ted, maybe you can give us all a bit of a recap uh of what uh went down at the forum.

Forum Highlights And Student Competition

Ted Stank 3:43

You know, we had a great forum, Tom. I think we had record attendance from our partners and the managers they sent from their organizations. Really, it was great. You know, we always shoot for the forum to be this intersection of research we're doing and best practices in the practice world and bring together our students and relationships with our partners. And we had that for three days. We had companies like HopEG Lloyd and Fanatics and HF Sinclair, Caterpillar. I don't want to miss anybody here. Pilot was there, including their CEO, Kimberly Clark, um, BRG and PWC Consulting. And so it was this great mix of people from across the spectrum of academia, students, and industry. Tom Johnson from HF Sinclair was our guest on the podcast. So anybody interested could hear that podcast. I know it's out there. That was really interesting. And then we had some great panel sessions. Stuart Sandlin of Hat Pag Lloyd and Jennifer McKeon of Fanatics, Sarah Haffer of Kimberly Clark, and as I mentioned, Adam Wright, CEO of Pilot, plus some of his execs, Brad Anderson, Jesus Guerra. Wendy Gentry, a long-term partner of ours from Caterpillar, was there, and it was just a great session. One of the things that really uh excited me was that we had for the very first time a student case study competition that they did live in front of the participants. PWC sponsored it, gave us a case study that was related to F1, Formula One Racing. And the students competed with their solutions to that case study, and it was really impressive. I think for everyone, it was one of the real highlights. Another highlight for me was a personal friend of the program, Dennis Riley, CEO of Kenco. We acknowledged his long-term partnership by honoring him with uh Global Supply Chain Institute, a distinguished fellow. That was a great moment, too. So it was action-packed, Tom.

Speaker 1 5:38

Just tremendous. And thanks so much for that recap. And I did get a chance to hear the interview with Tom Johnson explaining the oil supply chain, which was just phenomenal, understanding the ins and outs, particularly given uh what's going on in the energy sector right now. So that's just tremendous. And by the way, I thought it was a great podcast. I wasn't any part of it. I thought Lance did a great job. And Mal Tom Johnson helping to explain the oil industry as he did, walking us through the oil supply chain and his role in procurement. I just thought it was phenomenal. But so, folks, that's in the library if you missed the last episode. Let's get into some current events now.

Inflation Returns Through Energy

Speaker 1 6:16

And you know, that we could probably keep this brief, right? Because there's not much going on in the world of industry, the economy, and supply chains, right? So maybe we can just kind of gloss over a few things. But uh, just this morning, the consumer price index read came out, and sure enough, fuel prices, energy challenges kind of reared their ugly head. CPI was up 3.8%, which shows yeah, inflation's heating up. We were all kind of expecting that based upon what we're paying at the fuel pumps these days. But um, I think the market had kind of an allergic reaction to it based on what I'm seeing so far.

Todd Steffen 6:51

Yeah, no surprise, Tom. It's amazing when you look at the cost of energy and just the scarcity of energy in some situations. We'll talk about it in a little bit, maybe when we talk about data centers and just how the infrastructure of the U.S. is becoming so much more demanding, not only from a consumer standpoint, but from a company infrastructure standpoint. And so the increased cost of energy, you know, isn't welcomed by anybody.

Speaker 1 7:15

Yeah, no, and I know that a few years ago we were talking about this rush to electrification and the surge in EVs that were starting to make their way back into the forefront of things, and then only to see electrification kind of die off and the incentives kind of burn away and be set aside.

Data Centers Rewrite Site Selection

Speaker 1 7:33

Now it's data centers, as you point out, which I gotta believe, Todd, in your world of industrial real estate just has to be so challenging. I remember it was you one time that said, hey, we're no longer competing with other distributors and just DC's warehouses. So we're competing for that real estate access to infrastructure with those data centers. And oh, by the way, they pay handsomely for that space on a square foot basis, right?

Speaker 2 7:59

Yeah, and it's interesting. I mean, data centers, you know, we talk square footage in industrial real estate. The data center owners really don't have that same vernacular. It's all about megawatts and power consumption. That's the number one factor. Data centers can use up to 100 to 300 times the energy of a full-blown e-commerce distribution center. So just imagine typical site selection factors, right, around real estate cost, transportation costs, labor availability, maybe utilities here and there with water, wastewater if it's a specialized facility. But now it's all about the power. And it's all about the availability of that power. And of course, where are the fiber trunks compared to the data center site selection optimal location?

Ted Stank 8:48

When I learned about network design and facility location, I don't think we ever considered where the fiber networks were and stuff like that.

Speaker 2 8:55

Yeah. Yeah, it is crazy. But I mean, it's just that, and even water. I mean, a data center can use, you know, 50 to 200 times the amount of water just for all the cooling systems and everything compared to a typical distribution center. So it's water and power and fiber, you know, for most things. Like Tom said, I mean, the the owners of these data centers, they have mandates to get a certain amount of AI computing capacity up and running no matter what. And they're willing to trump what somebody is putting into their pro forma for a regular distribution site.

Speaker 1 9:26

Yeah, no, it's kind of hard to compete with that for sure. And it does occur to me, though, that you know, you probably would be competing for a lot of the same land use in a lot of circumstances, because hey, where the infrastructure is for energy, it's probably also the infrastructure for transportation, which we clearly need to access those facilities that you serve for industrial purposes too, right?

unknown 9:48

Yeah.

Speaker 2 9:49

It's amazing. When you look at the conversion just in the Chicago landscape, which is where I happen to be, you know, the all-state headquarters completely knocked down, right? What was the key driver for not only distribution centers there, right along 294, which is a major tri-state highway, but it was the availability of the power and the fiber that was going to that campus? Baxter went through a similar situation where their campus headquarters was going to be flipped in Deerfield, which is a northern suburb as well of Chicago. And the people around there said no. We're done with truck traffic. And so now it's a matter of does it work for data centers? And it doesn't really happen to be a great data center candidate, but it's just amazing what this typical corporate infrastructure is turning into, both from a warehousing and a data center standpoint, whole campuses are being overhauled.

Ted Stank 10:40

Todd, I had a conversation this morning with one of our grads who's uh vice president of an energy company, and he was talking about how demand for natural gas is really skyrocketing because of fueling data centers. I have another friend who works for a hydrogen, alternative hydrogen power supply company. Same thing. Their business is booming for data centers. And I know there's been conversation about these micro-nuclear reactors. How much of that are you actually seeing the alternative energy sources being used for these data centers?

Speaker 2 11:11

I'm hearing the topic a lot. I mean, when I go to industrial conferences, it's always on the agenda of how are we going to power the grid, essentially, or how are we going to power these data centers. I've heard portable nuclear is probably five years out before you're going to see much in production on a regular basis. A lot of it just has to do with the state-by-state regulations of the grid within the state and what's behind the meter, you know, in quotes, and that kind of thing. So it's it sometimes gets very site-specific as far as who's providing the power, whether it's natural gas or electricity, what kind of conversion infrastructure is in place nearby, and then what do the regulations say?

Ted Stank 11:49

Fascinating new world. Not related at all to the broader world of supply chains and geopolitics and energy strategies around the world, is it?

Speaker 2 12:00

I'll tell you what, it sounds like there's a lot of similarity. It's just an extension, really, of what we've been dealing with, as you mentioned, Ted, site selection factors. We've tuned all the models to take into account the major four or five factors. Now we're just layering on two, three other factors, depending on what it is for data centers.

Leasing Uptick And Net Absorption

Speaker 2 12:18

But I'll tell you the supply chain overall, even though the economy's been in a little bit of a questionable state, although jobs looked really good most recently on the report that came out, I'm seeing a lot of uptick in activity around leasing space in the typical distribution 3PL and warehouse e-commerce space. And our leasing activity, you know, we look at it two different ways, right? How many leases actually get signed? So we say that's positive net absorption. Okay, so this past quarter was the first time we saw positive net absorption by supply chain users for typical warehouse space since 2022. So this was the first time that we've seen an uptick in absorption. You know, there was COVID, right? At 20, 21, 22, and then everybody went crazy with spec development in 22 and 23, and all this available capacity hit the market. And so it's taken us a couple of years, really three or four years, to burn that off. And now we're finally starting to see some positive net absorption, which is just how much space is being taken down versus how much space is being given back in the market. The other thing I'm seeing that's really promising is the tenants in the market snapshot, we call it TIMS, is up 25% year on year with regards to the number of tenants in the market. And we just took the PA market, for example, for that stat, and 21% in square footage being looked for. So I mean, that's a huge uptick, and coming off a balancing of capacity in supply and demand situations, it's very promising for the overall industrial sector, and then I think the overall economy.

Ted Stank 13:55

So tenants in the market means the number of different individual clients looking for space?

Speaker 2 14:01

Yeah, exactly. So for example, in our Pennsylvania market, we have 156 tenants currently out in the market looking for space. Their aggregate needs are totaling 76 million square feet of demand, and the average request is for about a half a million square feet. Now you got to keep in mind, Ted, you know, this is a little bit of a tricky stat because three PLs are the largest leasing factor in tenancy vacancy. But when a three PL requirement comes out, it goes out to maybe three, four, five different three PLs, right? So those three PLs all flood the same market for the same requirement. So you just got to keep your eye on how much of that tenant and market activity is three PL related, because it's usually amplified by three to five times.

Build Timelines And Real Time Intel

Speaker 1 14:43

Well, Todd, something that always strikes me as particularly challenging when it comes to industrial real estate is the fact that you really want to try to meet the needs of the moment. But particularly as it involves bringing online, you know, new capacity, greenfield capacity, and you probably be a better judge, about 18 to 36 months maybe minimum to kind of maybe move in. You can probably be a little more precise with that. But yes, so you're having to look out to say, okay, what's going to happen toward the end of 27, into 28 in terms of meeting the need of the moment? It did occur to me that maybe there was a little bit of the hands on the stove sort of phenomenon going back to the Great Recession. You know, if you go back 2008, 2009, a lot of capacity came online and it's like, whoa, the bottom fell out of the market. A lot of investors go, whoa, they got really cold, it seems. And I, you know, that's way in our rear view mirror. That's, you know, 17, 18 years in rear view mirror. Can you speak a little bit about how you tried to match supply-domain? What does equilibrium look like in your world, particularly with, as you mentioned, all the need for new e-commerce space that came on back in 2021, 22, that time frame? And I think you're the one that told me, what does it take? Twice as much space, three times as many hands? How in the world can you hope to achieve that match between supply and demand in the moment, given the dynamics that you just talked about a few minutes ago and the fact that, hey, any greenfield space is going to take one and a half to three years, maybe to make it a reality?

Speaker 2 16:18

It's a great question, Tom. And really the macro factors that you have to take into account are the lead time, like you mentioned, right? And now you're getting most industrial sites up in 12 to 18 months, assuming you have entitlements and you've owned the land and that kind of thing, and it's uh permitted industrial use from a zoning standpoint. But you know, some buildings can get up in as early as 10 months if the time frames are compressed. It's not that long that you have to wait, but it's still, you think about leases that are expiring, right? Companies are starting to negotiate 18 and 24 months in advance of what's that lease renewal going to look like from a landlord offer standpoint versus what is the new capacity in the market or capacity that's coming available look like, right? So you really gotta have a good partner that's got excellent data sources, first of all, as far as what's available, because the supply and demand can swing so wildly. I mean, here's a great example. I was looking for a million in square feet in Atlanta the other day, and we ran our publicly available search, and it looked like we had at least 10 options. And so it looked like from a tenant standpoint, we're gonna have a lot of leverage, right? Well, then I called my partner in Atlanta. I said, okay, here's what I'm seeing. And he said, Well, based on some activity of a very large occupier in the industrial space, you could forget about building number two, four, six, and eight, and three's questionable, and seven might, you know. So all of a sudden it was like where we thought we had 10 options to pick from. Now the supply and demand picture, even though the publicly available data said we're fine, right? We could have chased a lot of buildings and wasted a lot of time. We cut to the chase and we got after the ones that we needed to. It's that real-time insight, Tom, honestly, that gives you the biggest edge when you're trying to think about how do we satisfy these capacity needs that are, you know, six, twelve, eighteen months out. It's such a dynamic uh environment right now, especially for millions of square footers. You've got obviously Amazon in the market, you've got Walmart in the market now in a very big way. You've got Medline in the market. You know, nothing they do is under a million square feet for their major hubs. So you've got a lot of competition right now for these major sites where a developer might have thought, hey, I'm gonna put up three million square feet and we're gonna do three to five hundred thousand square footers. Well, now the market's saying, no, we're gonna take the million, the million two, the million three. And so it's eating up a lot more of the developable capacity that people had bought into from a landstand.

Speaker 1 18:47

Excellent.

Who Is Taking Space Now

Speaker 1 18:48

And with regard to the demand on the market, where are you seeing shifts or movements in terms of demand? We mentioned e-commerce and you mentioned three PLs. Who seems to be most interested in ringing your phone off the hook these days?

Speaker 2 19:01

Yeah, I'd say right now, wholesale and manufacturing are down year on year. And I went back and looked at the 2025 numbers just getting ready for our discussion, and they were down or flat last year as well. So not a real strong story for consumption of industrial space net net for manufacturing or wholesale. But again, 3PL up quite a bit. 3PL is about 40% of the leasing activity that we see in the market right now. And then you definitely see, you know, retail operators still continuing to expand their network and take down new space. I'm seeing the Home Depots of the world and that type of occupier lows, you know, that kind of thing, as they get out into different markets, they're gonna still be the ones putting up, you know, 600,000 square feet to a million square feet of their own capacity that they're gonna operate. But three PL seem to be the most active right now.

Sublease Surge And Landlord Concessions

Ted Stank 19:55

So, Todd, I've always heard you say that the industry you're in tends to be a leading indicator of not only supply chain activity, but economic activity. Because I think to quote you, you said it's easy to talk about what you're gonna do, but if you're actually putting money into a lease, that's obviously something you're gonna commit to. What are you saying for us in the next year or so, next year or two years of economic activity, of supply chains reacting to some of the changes we're that are happening in the world? Really interested in your take on that. You have amazed me before at various dinners and social activities, just talking about the kind of things that you see because of your vantage point.

Speaker 2 20:35

Yeah, it's a great question, Ted. But it's a double-edged sword for sure. I gotta tell you guys. Twice in the last month, I have seen examples where we've gone and toured buildings and we were blown away by the infrastructure spend on the capital investment inside the building, inside the four walls. In one case, they put over $70 million into brand new cold storage boxes inside a half million square footer and then pulled the plug on the whole thing. And now they're offering it to the market at 25% of the rate that you'd normally pay for a cold storage facility. So while there's a lot of enthusiasm and there's a lot of good signal that we're seeing on leasing and tenants in the market, and we definitely see an uptick coming over the next two years in leasing activity, for sure. I mean, it's you know, it was a nice normalized bounce, a very soft bounce after COVID and after all the spec development that we're now starting to see vacancy tick down regularly. And Tom, back to your earlier question, a normal market is about five to six percent vacancy, you know, giving and taking across the space that's available. And we're starting to see that normalized now across the situation. Uh, there's another situation, Ted. There's a million square footer in a major market. I saw a company go in, put over a hundred million dollars into automation, and then their strategy should. Shifted, they pivoted, and they pulled the plug on the whole thing. Never turned the stuff on. And here it's sitting empty with a long-term lease, right? And all this material handling, automation, investment. So what I would say is, while there's a lot of optimism, I would tell occupiers, I would tell tenants, don't forget there are a lot of landlords that are coming out of two and three years of hurt with regards to oversupply of all the development that they did, and it's not all consumed yet. So right now we happen to be in the highest market for sublease space available than we've ever seen. So what you want to keep in mind as you're thinking about it, as you're thinking about capacity and expansion, yeah, sure, some markets are going to be tight on million square footers, but there's a heck of a lot of other options in different size ranges where people are still sitting on inventory and they're very eager to provide not only sublease space that they don't need anymore, but if you're an owner, institutional owner, they're very willing to provide concessions, you know, rent abatement, uh TI allowances, where they don't want to sacrifice on the face rate because that goes into their pro forma and you know what their portfolio is worth. But they're willing in these times of a little bit too much supply and coming out of that to provide concessions. So it's a couple of things I'm seeing.

Speaker 1 23:18

Yeah, that's interesting. And you know, I felt like maybe we should have put a disclaimer with that question that Ted posed because it kind of sounded like we were getting some investment advice, maybe, but I think you came off just fine, Todd. I think we don't we'll be fine without that disclaimer. Kind of some good general advice, general uptick, some movements within the market, interesting secondary

Modex Takeaways On Warehouse Automation

Speaker 1 23:38

market. Hey, Todd, the last time I saw you was about a month ago at the Modex event in Atlanta. And a moment ago you mentioned automation. And I don't know about you, you know, walking through the Georgia World Congress Expo, a lot of whizbang, incredible technology. I'd just be curious, you know, I think we've established kind of what's going on in terms of general market dynamics, but what about the dynamics within facilities? What kind of action, I guess, are you seeing and being excited about in terms of automation, robotics, AI, maybe coming away from that event? What got you particularly intrigued?

Speaker 2 24:16

Yeah, that's a trick question for me because I'm a software and an automation geek at heart because I helped, you know, take care of that stuff at Walgreens decades ago. But I always stay involved with it and I stay on top of it. So I love going to Modex and just seeing what's up. But I mean, it's gonna sound overused, but AI right now is literally just taking over with regards to intelligence inside the warehouse, and it's integrated into and over WMSs and warehouse control systems and yard management, everything like that. But I mean, computer vision and yard management, computer vision in forklift operation is becoming just you know regular thing to see now where you're seeing these driverless forklifts and that kind of thing. And that's all AI, you know, models that are helping to run that. I'm still seeing a huge investment in automation. The automation is becoming more affordable, more modular, more expandable when you need it, as opposed to investing in this massive hundred million dollar maze of conveyors that are bolted to the floor, and that's all you're going to be able to see from an automation standpoint. I'm seeing a lot of uh cobots still popular where you have a robot going along with the human throughout the warehouse trying to make them more productive. Uh, I'm seeing AI stats in general that are making folks, you know, two times, three times more productive than they had been in the past. So really starting to see the investment in technology and automation move the needle from a productivity standpoint.

Speaker 1 25:48

Yeah, no, that's really exciting. And, you know, we've been talking automation. As you point out, it was really of the fixed nature that we saw that supported full palette in, full palette out operations. But to have that modularity and I think another buzzword floating around Modex was flexibility, you know, to be able to accommodate, you know, a multitude of different shipping platforms and needs and to upscale and downscale to meet your needs over the course of a volatile sales season and so forth was pretty exhilarating. Hey, just a quick little plug that we are undertaking research on warehouse automation and AI here at UT and would love to have listeners out there. If you are a user of warehouses, if you're a provider of warehouse services, we'd love to have your input and get that survey in front of you, but we're looking for robust response out there. But I think you're right. It's really fascinating to see that, dare I say those three magic letters, you know, ROI might finally be presenting themselves around these investments.

Speaker 2 26:48

Yeah, agreed. I mean, obviously, you know, it's still very, very expensive, and you have to look out a number of years to justify paybacks, you know, in the in the old days, it was, hey, if we can get payback in 10 years with the fixed automation, great. Now the portable automation or cobots and shuttle systems and that kind of thing, more of a five-year payback people are looking for, right? Because they need to prove it and they need to see the impact.

Speaker 1 27:12

Well, I remember we took a tour of the great Midwest a few years back when uh Alan Amling and I were working a project, and you took us to show some pretty cool auto store technology in the in the area, and we saw Walmart facility, we saw a lot of cool stuff. And now it's just interesting to see so many more companies, like I said, jumping in the pool and saying, hey, the stuff just might be for us, and maybe now's the time.

AI Skills And A Shrinking Workforce

Ted Stank 27:36

Yeah, Todd, you know, this is where we're kind of coming to the end of our time here, but something I want to tie into is this whole conversation about automation and AI link to talent. One of the things that really intrigues me looking ahead is that sometime mid-century, this century, the world is going to have something that hasn't happened since probably the last ice age, which is a shrinking global population and particularly industrialized countries. How does some of the automation and AI things that you're seeing in big industrial spaces link to this potential shrinking talent pool?

Speaker 2 28:12

Honestly, Ted, I think it's it's I I look at it like this. The old skills, I say old, the classic skills that a college grad, let's say, will have to have to really succeed in their career, right? It's a combination of interpersonal, technical, and business. And now there's this layer beyond technical of AI. And you look at Meta, right? I mean, here's a major user and creator of AI reducing their entry-level staff by, I think it was up to 10% or something like that. I mean, just massive shifts, right? So when you say, you know, what do we think about talent in this advent of a shrinking population and AI and that kind of thing, I see it like this. I mean, somebody has to constantly challenge themselves to be more and more proficient with AI, not so that they can go home early, right? But it's so that they can get the analytical work done in two to three hours instead of nine hours, and then have some time to actually think about what else I should be thinking about, right? And what else should I be asking maybe the AI models for? But it still goes back to, you know, an AI model could produce great information for you. You still have to have that person that can interpret it, first of all, qualify is it true? You know, the hallucinations that are out there and that kind of thing, but interpret it and present it in a way that could be not only digested by, but understood by the business and motivated by it, right, to do something. Because the information's really not worth much if it's not helping to make actionable decisions. So I see this talent landscape of somebody you can, you know, is not afraid to walk the operation, stay involved in the business, you know, from a hands-on standpoint, but they need to constantly be feeding the outputs of these AI models into the business and then justifying the right investments as a result.

Ted Stank 30:01

Yeah, I remember doing research with you years ago, Todd, when we first met each other and you were uh you know out in operations with Walgreens, and you know, and it was always a conversation with a lot of leaders like you that you wanted to be strategic, but there were so many things biting you every day that you didn't really have a chance to look out into the future and be creative and innovative. And optimistically, I would hope that this pairing of AI with our operational skills and knowledge will allow leaders to be more innovative as we move forward.

Speaker 2 30:34

Yeah, I see it the same way. I mean, you know, we used to look at reports, right? 20, 30-page reports, and it's just not that way anymore, right? It's all AI-based exception alerting into the hands of the right people at the right time to make the right decision, being fed by, you know, 20 more data feeds probably than we had access to in the past, and really, you know, helping those operators, those keen operators pinpoint issues and deal with the issues more quickly. And then what, you know, how do you use AI to help to grow the productivity levels of the people that are in the facility?

Ted Stank 31:07

And you know what? All that increasing AI use is going to need more data centers. More data centers. Those data centers are gonna need more industrial real estate. So we're back to square one.

Speaker 2 31:17

That's okay. There you go. And that's okay.

Ted Stank 31:21

Todd, it has been great to share 30-some minutes with you. Uh we could continue this forever. Hopefully, see you soon in person. Tom, you got any parting shots? Or Todd, do you have any parting shots?

Speaker 2 31:34

Great to be with you guys. It's always a pleasure, and I really truly enjoy my time whenever I'm hanging out with you guys, whether we're talking shop or not talking shop. That's just great to be with you today.

Ted Stank 31:44

So I have a really big final question for you, Todd. The last time we were together, you were not drinking bourbon.

Speaker 2 31:50

Yeah. Was there a supply chain issue?

Ted Stank 31:54

Yeah, maybe. I don't mean uh we weren't in Canada.

Speaker 2 31:58

I think Tom and I have done this to that. What is it called? The beer game or whatever? Yeah, right? Where you figured that out? Yeah. So yeah. You know, on any given day, Ted.

Speaker 1 32:08

Keeps us guessing. Todd, you've been such a great friend to Ted me. We we're so appreciative of that. And and maybe more importantly, uh, you've been such a great friend to our program. And we appreciate all you've given and all you will give in the future.

Fall Forum Dates And How To Reach Us

Speaker 1 32:22

Thank you so much for joining us here for this edition. We do look forward to seeing you back on Rocky Top, hopefully, very soon. And hey, folks, perhaps we can welcome you all to Rocky Top. Our next forum is in the fall. We're gonna get that fall semester underway, but I just did want to get the word out that our fall forum is scheduled for November 10 through 12 later this year. And uh we've got a great program in store for you. It's coming together. We're getting excited about it already. But Todd, I think you've probably got some fun summer plans, probably some time on the water. And Ted, probably the same with you. Let's get summer underway. What do you say? Sounds good to me, gentlemen. Well, hey, folks, you can also reach us out there at gsti at utk.edu. And with that, Ted and I are going to go back to grade and final exams and graduating students. But uh with that, have a great start to summer all, and uh we look forward to meeting up again soon. Be welcome. See everybody. Todd, thanks again. You bet.

Intro & Outro 33:20

Thanks for listening to Ted D on Supply Chain Management. Be sure to subscribe on your favorite podcast platform for more conversations with the leaders framing the path for practitioners, scholars, and students. Have a question or idea? We'd love to hear from you at gsdi at utk.edu. Until next time, listeners.