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Grainger: Focus on Productivity Spells Opportunity for Distributors

Grainger: Focus on Productivity Spells Opportunity for Distributors

November 18, 2010

In the recent Grainger annual analyst meeting, President and CEO Jim Ryan highlighted the fact that as Corporate Profits return, there does not seem to be a similar increase in employment.

"We don't see that changing a whole lot over the next several years," he said. In fact, he said, Grainger expects a focus on productivity to be a "trend for the decades."

Why is this a good thing for distributors – especially those focused on the MRO market? "Companies that have products, services and technologies that can help companies and improve productivity can benefit in the foreseeable future," Ryan said.

(How can you help customers lower MRO costs? This topic is addressed in Joel Roth's latest book, The 20% Solution: A Practical Guide to Dramatic Cost Reduction in MROP, available in the MDM Store.)

Customers are "scouring" their businesses for any process that has long cycle time, is expensive, complex or unorganized, he said.  "Those are great indicators of where to go to find cost savings."

And MRO is one of those areas that most businesses and institutions historically have not executed well. "The fact that companies are focused on improving productivity is great news for our industry and for our company," he said.

What's more, customers – especially in manufacturing – continue to consolidate suppliers in MRO. "It is one of the tried and true techniques companies are using to get cost out of their business," Ryan said. And there may be a lot more where that came from. "It's not just product suppliers being consolidated. What we're seeing now is companies consolidating their service providers, as well. They are no longer viewing products and services separately."

Read more about Grainger's increased focus on combining products with services.

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