Grainger Total MRO Solutions event draws 4,000 MRO buyers

Industrial distributor provides training, networking opportunities at customer event

Susan Avery -- Purchasing, 1/21/2010 11:12:15 AM

"Tough doesn't begin to describe the challenges you're facing" Jim Ryan, chairman, president and CEO at Grainger, said in his opening remarks to the MRO buyers attending the industrial distributor's Total MRO Solutions National Customer event this week in Orlando. The next two days, he said, "are about learning and networking with people who can help you get your business up and running" as the economy comes out of recession.
More than 2,000 of the distributor's commercial customers attended the event Jan. 17-19, which also consists of a trade show with more than 400 of its manufacturer suppliers. Grainger is repeating the event again on Jan. 20-22 for a second set of customers.
Attendees, many of whom are purchasing professionals who source MRO goods and services, heard about the economic recovery from Nigel Gault, chief U.S. economist at IHS Global Insight, and the state of the distribution industry from David Manthey, senior analyst with Robert W. Baird. The two each gave an address following Ryan's opening remarks.
Gault said that the economic recovery, which started in the fourth quarter of 2009, won't be "gangbusters" because the current business cycle is not normal. While the economy got a boost from businesses restocking inventory and fiscal and monetary policy, high unemployment and lingering effects of the financial crisis will be a drag on growth in 2010, he said.
Along that same theme, Manthey said that the recovery would be "subdued" for companies in the distribution industry. Results of a survey of industrial distributors he conducted last year show revenues starting to pick up in the fourth quarter of 2009 and climbing just 2.4% in 2010. Beyond that, he said, the industry will continue to see consolidation.
The event began on Sunday, with a Solutions Under the Sun networking session that provided opportunities for attendees to meet with industry experts, Grainger executives and their peers in an informal setting. Grainger execs were positioned in tents set up for the event that focused on some of the company's key markets: contractors and facility maintenance; manufacturing-facility and plant maintenance; transportation, warehousing and distribution; healthcare and hospitality and retail. A reception and dinner followed the networking.
Eric Sandford, director of supply management, at OmniSource Southeast, took part in the networking session, sharing experiences of his team with his peers. Sandford is expanding the structured MRO sourcing program he set up, using his company's relationship with Grainger as a benchmark. Sandford and his team keep an eye on MRO inventory using the distributor's KeepStock (or vendor managed) inventory program.
Of the growth in the event compared with last year, Mike Pulick, president, Grainger U.S., told Purchasing.com, "We take continuous improvement seriously." There were more manufacturer suppliers at the trade show, more networking opportunities and more customers attending at the 2010 event. In fact, the industrial distributor held the gathering twice during the week for two separate groups of customers. In total, more than 4,000 purchasing and maintenance professionals took part.
Speaking to the current business climate, Pulick said, "Our customers are starting to increase production, but are doing it with the same resources. So, they have to be more productive. We see this as an opportunity to show our customers how to be more efficient at purchasing MRO items."

To that end, the distributor offered at its event educational training session on topics that concern its customers. These are: inventory management, safety, sustainability and business continuity.

At the training session on inventory management, Kevin Heath, vice president of strategic sourcing at Georgia Pacific, told attendees that he views MRO as opportunity for continuous improvement. Georgia Pacific spends $80 million annually on general mill supplies. The category is the first that Heath and his team selected in an effort to consolidate the company's purchasing and supply base.

For Georgia Pacific, consolidating the category has helped to lower inventory levels by 20%, increase productivity and improve equipment reliability, he said.

On the trade show floor, Sam Kim, vice president, e-commerce, provided customers with an overview of Grainger's online buying activities. In the past year, the company refined the search capability (by product attributes) of its website and added a merchandizing feature that suggests related products. It also introduced functionality embedded within grainger.com that allows users to customize some products such as hard hats, safety signs and mats.

Tom Blue, vice president of sales at Milwaukee Tools in Milwaukee, one of Grainger's manufacturer suppliers with a booth on the show floor, uses the event to demonstrate new products to Grainger customers, including new test and measurement tools. He told Purchasing.com that his company continued to introduce new products in 2009 viewing the economic downturn as an opportunity for the company to grow its business and take market share from competitors.

Mark Lindstrom, vice president of sales at Ergodyne in St. Paul, Minn., another supplier exhibitor, said that he likes having access to both Grainger sellers and end users. "This is one of the more productive distributor shows we attend," he said