Grainger CEO Sees "Intense Focus" on Productivity

While the economic climate is starting to improve, Grainger CEO Jim Ryan told attendees at the company's trade show in Orlando, Fla. that customers remain cautious about spending and are avoiding big capital projects and hiring.

At the 2011 Grainger Show, which hosted more than 4,300 manufacturing and other clients, Ryan told a general session that businesses are cautious about growth prospects and will continue to have an "intense focus on improving productivity." He said companies were investing in equipment and information technology and extending work hours in an effort to improve productivity in their operations. Ryan said employers were also seeking cost savings in their MRO spending and were continuing to consolidate suppliers. He said customers were increasingly looking for suppliers such as Grainger to not only provide them with products, but also with knowledge and services to help them run their operations more efficiently.

To grow its $7.2 billion business, Ryan said Grainger was upgrading its distribution centers to ensure prompt delivery of products and expanding its product line. In the past five years, Grainger increased the number of products in stock from 82,000 to 350,000. The company is following a strategy of adding to its field sales force, but reducing the number of accounts they manage in order to give them more time to understand their customers' businesses and needs. Grainger is also expanding its presence in Latin America and in Asia.

Ryan said Grainger was also investing in technology to serve its customers better. He said the company was developing a "next generation" website that would provide a more customized environment, and was also making significant investments in mobile technologies. But Ryan told reporters that it will be another generation before the company transitions from its catalog to a strictly internet presence, noting that Grainger will print 2 million catalogs this year.