Grainger eases access to products for MRO buyers
Susan Avery -- Purchasing, 6/3/2004 2:00:00 AM
Speaking before analysts in New York recently, Grainger Chairman and Chief Executive Officer Richard L. Keyser likened recent initiatives undertaken by the distributor of MRO (maintenance, repair, operations) goods and services to having "changed all the tires on this car while it is still moving." The initiatives include investments in a new telephone system, search engine tools, distribution center network and branches.
In response to customer demand for easy access to Grainger products and services (there are more than 80,000 items in its red book catalog), the company recently installed a new telephone system across its branch network.
"We want to avoid having to tell customers that we will get back to them later or that we will have a solution for them next week," says Patrick H. Davidson, vice president, Branch Services, W.W. Grainger, Inc., Lake Forest, Ill. "Our customers are trying to keep a business running. It's imperative that we have products and services available when and where the customer needs them. Putting this technology in place helps us cut to the chase and get right to the solution to their problems." Customers also contact the distributor via the Internet at www.grainger.com or stop by one of its more than 400 branches located throughout the U.S.
When a customer contacts Grainger with a problem, a customer service agent uses powerful search engine tools to navigate to a product solution in seconds. The tools generate parametric data which helps narrow the product search. If necessary, the telephone system enables the branch to seamlessly transfer the call to a customer service agent working in the Grainger parts department, or to conference in personnel working in Grainger's FindMRO group. FindMRO is an online tool for sourcing hard-to-find maintenance items.
The customer then may choose to pick up the product at the nearest Grainger branch (Branches are within a 20-minute drive of two-thirds of the company's customer base) or have it shipped through Grainger's distribution center network.
Grainger developed its search engine tools internally; they are integrated with the company's SAP ERP (Enterprise Resource Planning) software system.
Grainger provides intensive training for its customer service agents of the order management and other internal processes. The company recruits branch personnel with technical aptitude.
Daily replenishment
At the same time, Grainger revamped its entire logistics network, putting in place nine distribution centers to provide the branches with daily product replenishment. As such, the branches have capability to provide next-day delivery to customers throughout the U.S. "Now, we can say, 'Yes, we have it,'" says Davidson.
Grainger also has expanded and upgraded many of its branches, enhancing its showrooms and merchandising practices.
These initiatives are expected to benefit Grainger's entire customer base from the contractor who frequents a local branch to a corporate purchasing manager who has implemented a national agreement with the distributor. Many corporate customers take advantage of Grainger's multi-channel strategy, setting up internal processes so that requisitioners may place orders for MRO items via the telephone, the Internet or by stopping by a local branch.
"We think this connectivity via the telephone, through our logistics network is going to be very powerful in helping to solve our customers' problems," says Davidson. "We also think it's going to help drive down their acquisition costs. In essence, these investments will save them time and money." Grainger figures that 40% of the cost of purchasing an MRO item can be attributed to processing costs. The remaining 60% is the cost of the product.
Grainger uses a number of different performance measures both internally and externally to gauge the success of these initiatives. Among one of the most important: product availability.
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