Grainger CEO: Productivity improvement a critical issue

More than 5,000 customers, 2,200 suppliers attend 2012 Grainger Show

02/27/2012


Grainger president and CEO Jim Ryan kicked off the 2012 Grainger Show in Orlando by pointing to productivity and workforce development as the two major challenges facing the myriad businesses Grainger serves across the U.S.

“Anything that has productivity attached to it, we’re seeing companies investing in it,” Ryan told more than 5,000 customers and 2,200 suppliers from around the country who gathered in Orlando for the annual event.

On the workforce front, Grainer is continuing its relationship with the American Association of Community Colleges by committing $400,000 to support 200 scholarships for students pursuing careers in the industrial trades. The scholarships are available at 100 community colleges across the country. This commitment brings the company’s total investment in technical education to nearly $2 million since 2006.

In a wide-ranging press conference after his keynote presentation, Ryan said the focus on productivity improvement has become an outflow of the economic recession. “When companies are down 5%, 10% they know how to take costs out. When it’s 30%, 40% 50%, it causes fundament changes in your business. More companies are paying attention.

“It’s caused a permanent change in buying behavior,” Ryan added.

Ryan called the workforce development issue, “a big issue not just for our customers but for the U.S. economy as well.” Citing a recent report that 600,000 skilled manufacturing are unfilled despite an 8.3% unemployment rate, Ryan said the company’s interest in the issue continues to increase.

“There are great jobs going unfulfilled. We need to shed more light on this issue,” he said. “Finding a way to resolve it is critical to the recovery of U.S. manufacturing. Businesses aren’t going to stand around and wait.”

On a number of other topics:

Sustainability: Ryan said new warehouse facilities in California and Illinois will be LEED Certified, but that the certification is secondary to the business value of sustainable facilities. That’s a point they make to their customers, and one their customers are demanding more and more. “It’s a business investment that also happens to be the right thing to do,” he said.

Global expansion: Grainger has purchased suppliers outside the U.S., and about 25% of Grainger’s business is now outside the U.S., a figure Ryan expects to keep growing. “Outside of the developed economies, there are not many broad-based suppliers. It’s increasingly difficult to be a single-country supplier in this business.”

As global manufacturing grows, Ryan thinks Grainger will continue to look at acquisition – although don’t necessarily expect to see the Grainger name used after these acquisitions. “Regardless of where you go in the world, this is a local business.” 

Six key trends:

Grainger president and CEO Jim Ryan cited six key trends in the global manufacturing economy:

  • A still uncertain economy
  • Increased foreign competition
  • A global war on talent
  • Big investments returning to the industry
  • Business productivity is increasing
  • Improved MRO productivity through supplier consolidation