Recommended Reading: Grainger’s Investment Blueprint

Company proves that wise spending during down times yields return.
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As we approach the midpoint of 2016, it's time to assess if you're investing enough in your business – something consultants and distributors alike, including Grainger, strongly advise in 2016 Distribution Remodel: ‘Invest or Die’.

If you don't think investing in technology, talent, inventory management or some other business component is wise right now, consider how Grainger, which routinely prioritizes investment throughout the company, saw first-quarter sales grow after declines the prior two periods. April sales also grew.

"Despite the current short-term uncertainty, we will continue to invest in the business to drive long-term results," CEO Jim Ryan said.

Ryan spoke to MDM earlier this year about how the company found ways to cut costs to build infrastructure, e-commerce, supply chain and IT systems. This long-term focus has fueled the Chicago, IL-based distributor's recent growth as the economy starts to rebound.

“Those capital investments are really tough to make when you’re looking for ways to get costs back out of your business when revenue is down,” Ryan said. “Many companies, we found, will take a timeout on those more capital-intensive investments in down economies. But this is not only an opportunity to be different; it’s an opportunity to move forward faster.”

Grainger's investment blueprint has included spending heavily on its e-commerce capabilities during every economic cycle – up or down – in the past two decades. Ryan said in 2016 e-commerce will compose half of its revenue, or about $5 billion.

“That would not have been possible if we were episodic in our e-commerce investments,” Ryan says. “Having the discipline to continue to invest in e-commerce, continue to invest in our supply chain and continue to invest in our systems infrastructure – which can be a little painful – has helped us create a competitive advantage.”

Read more about where Grainger and other distributors are strategically spending money their businesses in 2016 Distribution Remodel: ‘Invest or Die’.

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