Grainger's Services Taking Shape
Online SafetyManager, management tools organized into "Four Corners of Safety," was a hot item during the 2011 Grainger Show.
- By Jerry Laws
- Jun 01, 2011
ORLANDO, FLA. -- W.W. Grainger, Inc. hit the bull's eye with its new Online SafetyManager, if the throng of customers asking about it at the 2011 Grainger Show in Orlando, Fla., was any indication.
Launched March 1 at the event, the offering consists of a set of online management tools grouped into "Four Corners of Safety" -- the corners are analysis, compliance, training, and research -- and available as either Online SafetyManager Core or Online SafetyManager Complete. The tools include audit programs, checklists, policies and procedures, OSHA regulations, online training, safety meeting templates, safety clip art, a resource library, MSDS search, and an Ask A Specialist feature.
About 4,200 customers and 3,600 Grainger sales and customer service personnel attended the show, which included an expo with 473 exhibitors participating. The aisles were full, their booths were busy, and the Online SafetyManager booth was jammed with curious customers who watched an online demo and peppered Grainger reps with questions.
Online SafetyManager (www.grainger.com/safetymanager) was built upon the online safety and risk management platform of SafetyCertified, Inc., which Grainger acquired in October 2010. The online tools are part of Grainger's growing suite of services offered to its more than 2 million customers, whose purchases of PPE and MRO products enabled Grainger to post record sales of $7.2 billion and record net earnings of $511 million in 2010.
"It's another way to be more relevant to our customers," Grainger Chairman, President, and CEO Jim Ryan said Feb. 28, referring to the services component. "There's three things that just about every customer, every industry, every geography is asking for. One is if they can find ways to get more productive. Safety is a bigger and bigger issue; there's not a customer we talk to that doesn't have some sort of workforce safety issue going on. And also energy efficiency and sustainability. Those three areas are where you'll see us build out services."
Services is a growing part of their business but still in the "first inning," Ryan said. Jim Narus, a supply chain expert and business professor at Wake Forest University, asked whether customers so far are willing to pay for these extras. Ryan answered with a story about his conversation with a customer who was making a major reduction in his suppliers and had fewer people on his staff to handle the work of three plants rather than one. This scenario is typical for companies that cut costs and personnel during the recent recession, he said.
"No, they're not willing to pay for a lot of these extra services," Ryan continued, "but we can justify covering the costs of those services. We're getting more business. We provide those services because we know we're going to get more business."
Onlinesafetymanager is a subscription service. Ryan said Grainger will wind up with a mix of paid services and free services. He promised the company's most significant investment yet in e-commerce would be unveiled soon; other company officials said 25 percent of Grainger's sales occur online.
"We clearly have permission from our customers to talk with them about services," said Deb Oler, vice president and general manager of Grainger Industrial Supply. "The online safety thing is actually a pretty easy sell."
"Our customers have been asking for that for a long time," agreed Jeff Nixon, Grainger's vice president of U.S. Strategy & Business Development. He said many customers' representatives told him that seeing Onlinesafetymanager in action was the main reason they came to the show. "We're excited about it," Nixon said. "I've been just thrilled with the response from our customers. It feels like we're on the right path."
Patti Julius, Grainger's emergency preparedness business issues manager, is working on the company's offering in that area. She said her team is developing campaigns about specific preparedness topics, such as flood or hurricane preparedness. "People in general often don't plan for emergencies until they have them, and unfortunately, that hesitance to plan causes them to suffer more loss and a great disruption to their organizations," she said. "Really, what we're trying to focus on by doing these campaigns is to raise awareness that good emergency planning is not a one-and-done when an event happens but is more of a process, addressing it before, during, and after. So it should be part of business operations."
Some Grainger employees participated in the Great Central U.S. ShakeOut, an earthquake drill held April 28 in 11 central states. Organizers hoped as many as 8 million residents of those states would take part.
When it is explained in terms of dollars and cents, such as a day's loss of sales, customers realize why emergency planning is essential, Julius said. Although there are no plans to print a Grainger emergency response catalog, she predicted the emergency preparedness offering will be seen as a reliable, one-stop source for customers by early 2012.
Domestic and International Expansion
Grainger promises same-day or next-day delivery of its almost 350,000 products in stock. Ryan said the company added more than 150 salespeople last year and has been spending money on branches and distribution centers for the past five years, with a new DC being built in California and the Chicago DC being expanded. He said the company's success is built on four areas: its supply chain, its systems, its people, and the ease of doing business with Grainger. The increase to 350,000 products was a record expansion, but order fill rates remained at all-time highs and inventory turn rates didn't change, he said.
"We're not done," Ryan said. "We're expanding our product lines, not only in the United States, but also in Canada and Mexico and other places where we do business. We think we can get up to 500,000 products in stock."
Grainger is seeing increased demand for Spanish-language catalogs and collateral material and also for Spanish-speaking customer service agents. He said the most promising international expansion opportunities are the Americas and Asia, and the business segments growing fastest in 2011 are hospitals/health care and manufacturing. "There's not a more MRO-intensive industry than manufacturing, and it's growing in Asia and even more so in the Americas," he said.
Grainger is applying lean and Six Sigma to MRO, and they're gaining momentum, Ryan said. "There is not a better signal to Grainger than to hear a customer say, 'We've got a Six Sigma project going.' We ask them to let our people come in and help. It's great news for us that lean and Six Sigma are taking hold in MRO."
This article originally appeared in the June 2011 issue of Occupational Health & Safety.