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MDM Interview: New Leadership at Acklands

It’s a way to better manage our information, to not only get more efficient internally but most importantly provide a very high level of service to the customer. But again, SAP is really only an enabler to the extent that that technology is layered in and leveraged against world-class processes. That’s why we’re going to spend the time to get the process right first, and then we can better leverage the technology to take that service to the next level.

About Acklands-Grainger: 10 Years of Grainger Ownership

W.W. Grainger bought Acklands in 1996 and changed the name to Acklands-Grainger. The subsidiary distributes industrial, fleet and safety products in Canada, with more than 160 branches nationwide and annual sales of more than $600 million.

Acklands-Grainger is operated through distinct business units, led by the industrial, fleet and safety distribution business. Other units include:

Industrial Coatings
This group operates under the “Body Shop” banner in Western Canada, with separate inventory and salespeople. The customer base includes body shop customers and fleet and industrial customers who use these products.

This group imports and distributes hand tool and related items under the Westward private brand name. According to Grainger, it is the second largest importer of tools in Canada.

This is managed and operated under the Westward group. Profast’ners supplies fasteners for a range of end users.

Acklands-Grainger has five regional warehouses, more than 70,000 customers and more than 2,000 employees. The company says it has available inventory of more than $120 million.


Related Links:
Acklands-Grainger Taps New President

to the leading companies in Canada because we are really the only true national player with a broad national footprint and more than 100,000 products in stock. … We’ve had a lot of success growing that business, and we’re going to keep growing that business aggressively …

But at the same time many of those things that are important to national accounts in terms of product availability, customer service, product breadth and the branch network are equally critical to small businesses.

MDM: Describe the competitive landscape right now in Canada.

CC: It’s a very competitive market. When we look at the Canadian market as compared to some other global markets it might be more fragmented and have a tendency toward more regional as opposed to national and multinational players. We have a lot of respect for all of our competitors, be they regional, national or multinational, and we’ve got some very strong competitors out there. … We spend a lot of time with our customers, doing surveys, interviewing them, doing focus groups, and understanding how we can continue to stay ahead of everyone else as they enter the market or try to compete with us in this marketplace. … We certainly can’t rest on our laurels in terms of being the biggest national player. We have to stay one step ahead of the competition by providing a high level of service.

MDM: How aggressive is your growth strategy?

CC: Similar to Grainger we think there is strong potential for us to grow by doing a great job of servicing our customers. By expanding the product offering we’re going to be able to tap into more and more of our customers’ purchases. By doing a great job in the marketplace we think we’ll be able to take market share away from the competition.

MDM: Grainger has reported it wants to improve your operation’s profitability.

CC: Some opportunities include joint sourcing opportunities with Grainger. Not just between Acklands and Grainger industrial supply but really taking a corporate-wide view of what our product procurement opportunities are. And at the same time looking at what the supply chain leverage opportunities are across the corporation. … I think we have great opportunities in terms of how we go to market. Focusing on broadening our product line allows us to drive profitability. Increasing our share and winning a bigger share of our customers’ spend makes us more efficient and more profitable overall. And I think ensuring our growth is coming from all segments of our marketplace small, medium and large accounts allows us to increase our profitability going forward.

MDM: You recently announced you would be postponing implementation of SAP until 2008. What do you need to do to prepare?

CC: I think it goes back to some of my earlier points. How do we best leverage this fantastic infrastructure that we have today of 160+ branches and five distribution centers, as well as all of Grainger’s supply chain expertise and knowledge and leverage? How do we pull all that together so we have best-in-class processes before we go live with SAP? We have a number of teams working actively on continuous improvement projects to take our service to the next level we think it’s the best out there today, but there are always opportunities to improve. We think by spending the next few years working on that we’re going to position ourselves for a more efficient and a quicker SAP implementation by getting the processes right before we put the technology into the business.

MDM: What is your overarching goal in implementing SAP?

CC: As we continue to add more products, that adds complexity in the supply chain. SAP is a great tool for us to manage that and make sure we keep driving higher and higher levels of product availability. …
Grainger leadership has said in recent calls with analysts that Grainger needs to improve the profitability of its Canadian subsidiary, Acklands-Grainger. “We are in the process of bringing the performance of Acklands-Grainger more in line with that of the U.S. branch-based business through improving service and productivity by implementing the common SAP platform, rationalizing the branch and supply chain network and establishing a uniform purchasing program,” CEO Richard Keyser said recently.

Grainger has tapped new leadership in Canada to do just that. Court Carruthers, 34, most recently Acklands’ vice president for national accounts and sales, is now the new president.

Carruthers is facing some big tasks among them, leveraging synergies with Grainger to improve purchasing and efficiencies and implementing a network-wide SAP platform. Carruthers recently spoke with Modern Distribution Management about his vision for Acklands-Grainger.

MDM: What is your vision for Acklands-Grainger?

CC: We’re clearly the leading provider of MRO solutions in Canada today the largest player in the market. At the same time we think there is an ongoing opportunity to further leverage that position, and the supply chain is one of the key drivers of that. Our success is going to be based around having the broadest product offering and delivering that with a high level of availability to our customers. And you can only do that by having the most efficient supply chain.

MDM: What do you need to do to make that happen?

CC: It’s really about leveraging our existing assets. We have 165 branches and five distribution centers. The physical assets are largely in place today, so really the opportunity is for us is to make sure we have the broadest and the right product offering based on our customers’ demand and that we have the right inventory locally for those customers. As an example, we’ve been upgrading and building new branch facilities. It’s not really a market expansion like Grainger has done in the U.S. but really just making sure we have state-of-the-art facilities close to our customers that can hold the right level of inventory, and a broader level of inventory to really provide a high level of service to customers in key markets. That’s been an ongoing program over the last three years.

Using Edmonton, as an example, in northern Alberta, which is one of our key and largest markets, we’ve recently opened two new facilities one that is 30,000 square feet and one that is 45,000 square feet. It’s a market we’ve been in for a very long time but we wanted to make sure that we had state-of-the-art facilities capable of handling our business growth in that market.

MDM: Is Acklands-Grainger implementing a product expansion on the same level of Grainger’s in the U.S.?

CC: The organizations in Canada and the U.S. are working very closely to maximize our supply chain product procurement opportunities. At the same time, for example, Grainger’s done a large expansion in fasteners in 2006, but Acklands-Grainger has been in the fastener business for a very long time. So we worked with Grainger on that expansion. We’re leveraging joint supply opportunities around that expansion. We’re going to continue working with Grainger and looking at lines that are strong for them that may be opportunities for us in Canada. At the same time we are looking at commodity groups that we’re already in where there may be additional expansion opportunities.

MDM: How important are national accounts to Acklands-Grainger’s growth?

CC: I think they are one important element as part of a well coordinated and comprehensive strategy for how we grow the business. … We think on the national accounts side we are uniquely differentiated to provide a very high level of service

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