Grainger extended

The Grainger difference How do dispensing and locker technologies work? Challenges of building an extended enterprise The future Grainger.com stats

Grainger, a 75-year-old industrial products giant, has a laser-like focus when it comes to serving its 1.5 million customers on their terms. Grainger, which supports manufacturing facilities in markets ranging from hydraulics to office supplies, has harnessed the Web to reach buyers and to monitor its 1,200 suppliers.

Consider Grainger's Web application Supply Chain Sentry, which the Chicago company uses to rectify problem shipments. If Grainger receives a damaged shipment, it takes a digital photo and sends it to the supplier. The supplier can dash off the replacement merchandise after using the digital snapshot to verify the damage. A vigilant gatekeeper, Supply Chain Sentry also uses paging technology and pop-up windows to alert appointed contacts at suppliers of potential problems with shipments. CIO Tim Ferrarell describes this unique application and others Grainger uses in its extended enterprise in an interview with Jennifer Jones, on assignment for Network World.

What makes Grainger unique?

What separates us is our use of IT to integrate our various sales channels. This integration helps Grainger provide seamless service to customers whether they order via phone, fax, the Internet or the branch location. Grainger's goal is to make it easy for customers to find the products they need and get them quickly.

Saving customers time and effort requires being close by with solutions to their problems. Grainger accomplishes this is by deploying 'dispensing and locker' technologies at customer sites. These allow us to get inventory closer to the customer so it's there when needed. This equipment must be connected to customers and to Grainger, and work in a highly integrated fashion.

Give us some details on dispensing and locker technologies. How are they part of your extended enterprise?

Historically, customers who wished to carry an inventory of frequently used products on site stored them in a tool crib or some other manned storage facility. The challenges with this approach are typically record-keeping and inventory control. Inventory costs and service levels can get out of hand in a hurry.

Now Grainger provides automated dispensing equipment, which is connected to a customer's purchasing system and to Grainger's supply chain. The dispensers look like industrial-strength candy machines but act more like [automated teller machines]. They only release supplies to properly identified and authorized users. Transactions are posted immediately to all affected accounts. The system, available 24-7, generates more accurate accounts than manual processes. Customers know what is being used, who is using it, the purpose it's being used for and other pertinent information.

The automated dispensers also provide Grainger with a purchase history so products can be replenished as needed. The result is no more 'stock out' [notices] or excess inventory. Service quality goes up and money wasted on excess inventory gets invested elsewhere.