Accelerates telephony program
CHICAGO, Sept. 28 /PRNewswire-FirstCall/ -- At an analyst meeting held at
Grainger's newest distribution center in Robbinsville, N.J., today, Grainger
Chairman and Chief Executive Officer Richard L. Keyser provided an update on
the company's technology investments, including its SAP installation and
telephony program. These two initiatives are designed to help the company
become more efficient at saving customers time and money when purchasing
facilities maintenance products.
"For us, technology is not a mere indulgence or a nice to have. It is at
the very heart of our business and helps us drive our multi-channel strategy,"
said Keyser. "Providing customers access to our broad product line through
several channels has been a competitive weapon for us because it spells speed
and convenience for our customers."
Grainger expects to continue installing SAP across the U.S. branch-based
organization by the middle of 2005. To date, the company has completed the
design and is currently refining the system to maximize capabilities. One
third of the development effort is devoted to such testing and refinement.
For 2004, the company continues to forecast $45 million to $55 million in
operating expense and $50 to $55 million in capital expenditures related to
the SAP program. These estimates are consistent with those provided at
Grainger's analyst conference in Boston in December 2003.
Keyser also detailed Grainger's telephony program designed to improve
communication among Grainger's 400 U.S. branches by providing customers with
just one local number to access everything the company offers. "About 60
percent of our orders come in on the telephone," he said. "Given our focus on
service, we are updating our telecommunication systems to provide a seamless
customer experience."
To date, more than 100 branches have transitioned to the new communication
system. Grainger is stepping up its conversion plan and intends to complete
the remaining branches by the end of this year. The company estimates $15 to
$20 million in capital expenditures this year for the project. That still
keeps Grainger within its range of $150 to $175 million for 2004 total company
capital expenditures announced in July 2004.
Supply chain update
Senior Vice President, Supply Chain, Y.C. Chen, delivered an update on
supply chain operations, detailing the results of the recently completed
logistics network program. Under the program, the company added more than one
million additional square feet in capacity and new automation to increase
accuracy, speed and efficiency through the supply chain. Grainger's nine
distribution centers replenish branches daily and ship product to customers
same day for next-day delivery.
"The service and productivity improvements we've gained throughout our
program are an important factor in our strong year-to-date results," said
Chen, who noted that overall cycle time has improved by nearly 20 percent due
to these enhancements. "Going forward we have a state-of-the-art distribution
system that can serve as a strong foundation for growth. We've already seen a
$115 million reduction in inventory and more than a 25 percent improvement in
productivity. We expect to see a 50 percent total improvement for the project
overall. Cumulative cash flows from the project are expected to be positive
in 2005 and our redesigned logistics network is on schedule to contribute
$10 million to operating earnings this year."
W.W. Grainger, Inc. (NYSE: GWW), with 2003 sales of $4.7 billion, is the
leading broad line supplier of facilities maintenance products serving
businesses and institutions throughout North America. Through its network of
nearly 600 branches, 17 distribution centers and multiple Web sites, Grainger
helps customers save time and money by providing them with the right products
to keep their facilities running.
Forward-Looking Statements
This document contains forward-looking statements under the federal
securities laws. The forward-looking statements relate to the Company's
expected future financial results and business plans, strategies and
objectives and are not historical facts. They are generally identified by
qualifiers such as "expects," "forecasts," "estimates," "intends," "plans,"
"going forward," "can serve," or similar expressions. There are risks and
uncertainties the outcome of which could cause the Company's results to differ
materially from what is projected. The forward-looking statements should be
read in conjunction with the Company's most recent annual report, as well as
the Company's Form 10-K and other reports filed with the Securities Exchange
Commission, containing a discussion of the Company's business and of various
factors that may affect it.
SOURCE W.W. Grainger, Inc.
-0- 09/28/2004
/CONTACT: William D. Chapman, Director, Investor Relations and External
Communications, +1-847-535-0881, or chapman.w@grainger.com , or Robb M.
Kristopher, Manager, External Communications, +1-847-535-0879, or
kristopher.r@grainger.com , both of W.W. Grainger, Inc./
/Web site: http://www.grainger.com /
(GWW)
CO: W.W. Grainger, Inc.
ST: Illinois, New Jersey
IN: CST
SU:
KM-JE
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0840 09/28/2004 12:00 EDT http://www.prnewswire.com