Efficiency and

Effectiveness of a good
Supply Chain.
GRAINGER AND MCMASTER CARR
MAINTENANCE REPAIR AND OPERATION
SUPPLIERS

By
Akhil A

W. W. Grainger
The

company was founded by William Wallace

Grainger in 1927 inChicago, Illinois.
W. W. Grainger, Inc.is aFortune 500industrial
supplycompany founded in 1927 inChicago.
Revenue is generally from business-tobusinesssales rather thanretailsales.
Specializing in next day delivery of
Maintenance, Repair and Operations(MRO)
materials and supplies.
Grainger operates in 22 countries and serves
customers in more than 150 countries
through its export business.

McMaster-Carr
McMaster-Carr

Supply Companyis a private,

family-owned supplier to industrial and
commercial facilities worldwide.
McMaster maintains over 555,000 products
in a catalogue offering a variety of
mechanical, electrical, plumbing, and utility
hardware not usually located from a single
source.
The company is based inElmhurst,Illinois.
The McMaster app was released in May
2013 for theiPadand March 2014
forAndroidtablets.

Summary
McMaster

Carr and Grainger are both

MRO suppliers.
Grainger has a lot of stores across US,
also uses websites while McMaster Carr
mostly uses website and usually ships
the order.
Grainger have 9 DCs in US, McMaster
Carr have a few DCs which also serves
as stores.
Both company act as distributors , offers
several hundred parts all year long.

Pre

structural Level :- company

growth, strategies to be adopted in a
company.
Uni structural Level :- specializing in
MRO delivery, supply chain
strategies.
Multi structural Level :- Order
Fulfillment , Deploying new DCs and
Stores, Usage of proper Inventory
Tactics to save cost
Relational Level :- Need of efficient
management system, Proper use of IT
(Websites, Management Systems),

Q1
Grainger

have 9 DCs and 100s of

stores which means at least 11
stores for one DC.
If they increase the no of DC,
then faster order fulfillment is
possible.
Since McMaster Carr uses DC as
both DC and Retail store ; They
just need to increase the no of
stores drastically .

Q2
The

product stocking should be

according to the historical data
and a proper forecast.
There should be a vast inventory
for fast moving products.
The DCs should have all products
and stores should have fast
moving goods.
If a slow moving part is ordered ,
It can be fulfilled through DC.

Q3
Should

use an ABC analysis for the

inventory.
More for Fast moving, Less for Moderate
moving , and much less for slow moving.
But, goods should be from reliable supplier
since if a large quantity of Slow moving
goods is required, they should be able to
deliver it on time.
Inventory aggregation for slow moving
items
Inventory disaggregation for moving goods

Q4
Theres

no room for waste when it comes down

to your inventory.
Inventory- More for Fast moving, Less for
Moderate moving , and much less for slow
moving.
But the sales should be divided into 2: Shipping
and Retail.
And according to both order forecast, Inventory
should be maintained.
Also , Since they have website; Use it as a tool:
Deal of the Day, Bonus Items, Put the Items on
Sale on Slow moving goods.

Q5
The

markets should be allocated according to

the historical data, since it has been more than
80 years in market, they will definitely have the
data.
Also when there is data, they can change
inventory . For eg: Industrials hubs need
machine spares while Neighborhoods need
small home appliance parts.
If an order cannot be fulfilled by a DC, So DCs
should be in a proximity that one will act as
anothers Backup.
i e : DCs in the country should have some equal
proximity; which will help when problem with
orders arises.

Q6
Since

there are 1000s of suppliers, MRO

Suppliers should use DCs as Cross Docking
Centers, So that suppliers only have to
deliver it to one DC.
This DC has to be in a quadrant, or a group
of 5 or 10 states.
This will also reduce transportation cost, and
Decrease Suppliers burden.
Also a criticality method has to be used, So
that there is provision for Critical and
Strategic products.
And both Continuous and Periodic review of
Inventory should be implemented

Q7
Since

there are dynamic changes in

technology day by day, There is an increase
of E-commerce.
So it is good to Integrate the web orders with
the normal orders.
Here the stores and DCs should have an
Electronic Data Interchange (EDI). So when a
order is placed or a sale happens the whole
stores in US knows.
The information on paper invoices, purchase
orders, requests for quotations, bills of lading,
and receiving reports will also be shared.
This is called Click and Mortar strategy.

Q8
The

transport should be mixed.

The delivery of goods and Stock
replenishment should be done using
same vehicles.
Whenever a delivery goes out, if it is the
farthest from a DC and nearer to the
Supplier , that vehicle can be used for
replenishment.
By this way, Supplier wont charge transit
cost and company will incur less cost.

Value Added
Freight

tracking Web pages.

Electronic Data Interchange (EDI)
working together with the customer to
identify the parts (Design Collaboration).
Auto-Reorder for the products that is
used regularly.
E-Procurement
Online Order Management System.
Inventory for just-in-time and emergency
needs of businesses.

Thank You