CHICAGO (February 1, 2000)—Reflecting a growing trend among large companies to create operating efficiencies through integrated supply arrangements, Procter & Gamble and SC Johnson have signed multi-year agreements with Grainger Integrated Supply, a division of W.W. Grainger, Inc.
Under a new agreement with SC Johnson and an expanded renewal agreement
with Procter & Gamble’s Cincinnati-based non-manufacturing division, Grainger Integrated Supply will assume responsibility for on-site management of indirect MRO materials expenditures for the two companies totaling more than $34 million over the life of the contracts.
“We’re pleased that these leading manufacturers have decided to partner with us,” said Peter Torrenti, President of Grainger Integrated Supply. “We’re doubly pleased that we have provided Procter & Gamble a level of service and results that has prompted them to continue and expand our partnership.”
These contracts have contributed to the dramatic growth experienced by Grainger Integrated Supply over the last year. Grainger, North America’s leading business-to-business provider of maintenance, repair, and operating (MRO) supplies, services and related information, recently announced that sales for its integrated supply division increased 54 percent for the 1999 fourth quarter as compared with the fourth quarter of 1998. Grainger attributes the growth to new contracts, scope expansion of current relationships, and an increasing acceptance of the Grainger integrated supply model.
“Interest in our integrated supply model has grown as more companies become aware of the tremendous supply chain efficiencies and documented cost savings they can achieve as a result of our MRO management,” explained Torrenti. “Additionally, the growth of the Internet has prompted companies to look for suppliers that have the capabilities and resources in place to leverage the many benefits of electronic procurement to achieve those efficiencies and cost savings.”
Grainger Integrated Supply offers clients a unique mix of tailored MRO services, from multi-channel procurement to comprehensive MRO materials management, by utilizing Grainger’s national and international network of resources and technological capabilities.
Working with their clients, experienced Grainger Integrated Supply personnel identify opportunities for improved efficiencies, then create and implement new or enhanced MRO materials management processes. In addition to offering process improvement measures, managers have immediate access to Grainger’s extensive network of more than 600,000 products and replacement parts from both Grainger’s general catalog and Grainger’s online catalog, found at www.grainger.com, as well as to sourcing for unusual or hard-to-find products or parts.
“At SC Johnson, we believe it’s smart business to always keep an eye out for ways to improve all operational aspects of our organization,” said Charles Theuring, Director of Waxdale Manufacturing, SC Johnson. “Grainger Integrated Supply has helped us deliver MRO process improvements and documented cost savings.”
Demonstrating the existing opportunities among manufacturers for supply chain improvements, a recent Deloitte Consulting study revealed that nearly 75 percent of manufacturing purchasers consider their supply chain performance average or below average, and only two percent of respondents consider their supply chain “world class.” The study, ‘Energizing the Supply Chain: Trends and Issues in Supply Chain Management’, also revealed that manufacturers consider partnerships with distributors very important, a close third behind customer and supplier partnerships, respectively.
The study supports the trend that large companies are becoming increasingly aware of opportunities to realize supply chain improvements and indicates that many companies are looking to partner with distributors to initiate integrated supply relationships. Grainger Integrated Supply’s accelerating growth further indicates that companies want an MRO management strategy that provides the lowest total cost for supply chain optimization, logistics consolidation and information management as well as financial and process improvement.
Torrenti added, “An effective integrated supply strategy involves more than supplier consolidation and inventory management. MRO is an enterprise-wide function, so an optimal integrated supply solution should apply all available resources and technology to making the entire company more efficient and profitable.”
Procter & Gamble
A $38 billion global leader in the development, manufacturing, and marketing of a broad range of consumer goods, Procter & Gamble markets approximately 300 brands to nearly five billion consumers in over 140 countries. Based in Cincinnati, Ohio, Procter & Gamble has operations in over 70 countries and employs about 110,000 employees worldwide.
SC Johnson
One of the world's largest makers of consumer household products, SC Johnson's cleaning, home storage, and insect control products are available in over 100 countries. Based in Racine, Wisconsin, family-owned SC Johnson employs 9,500 people and maintains operations in nearly 60 countries.
Grainger
W.W. Grainger, Inc., with 1999 sales of $4.5 billion, is the leading North American provider of maintenance, repair, and operating (MRO) supplies, services, and related information to businesses and institutions. GWW shares are traded on the New York and Chicago stock exchanges. For more information, visit Grainger online at www.grainger.com.