Summary

McMaster Carr and Grainger are bothvMRO suppliers.Grainger has a lot of stores across US, also
uses websites while McMaster Carr mostly uses website and usually ships the order. Grainger
have 9 DCs in US, McMaster Carr have a few DCs which also serves as stores. Both companies
act as distributors, offers several hundred parts all year long. Pre structural Level: - company
growth, strategies to be adopted in a company. Uni structural Level: - specializing in MRO
delivery, supply chain strategies. Multi structural Level: - Order Fulfillment 5 Deploying new
DCs and Stores, Usage of proper Inventory Tactics to save cost Relational Level: - Need of
efficient management system, Proper use of IT (Websites, Management Systems), Reduction of
Transportation Cost.

Q1 How many DCs should be built and where should they be located?

Grainger have 9 DCs and 100s of stores which means at least 11 stores for one DC. If they
increase the no of DC, then faster order fulfillment is possible. Since McMaster Carr uses DC as
both DC and Retail store; They just need to increase the no of stores drastically

Q2 How should product stocking be managed at the DCs? Should all DCs carry all products?

The product stocking should be according to the historical data and a proper forecast. There should
be a vast inventory for fast moving products. The DCs should have all products and stores should
have fast moving goods. If a slow-moving part is ordered, It can be fulfilled through DC.
Q3 What products should be carried in inventory and what products should be left with the supplier to be shipped directly in
response to a customer order?

Should use an ABC analysis for the inventory. More for Fast moving, Less for Moderate moving ,
and much less for slow moving. But goods should be from reliable supplier since if a large quantity
of Slow-moving goods is required, they should be able to deliver it on time. Inventory aggregation
for slow moving items Inventory disaggregation for moving goods

Q4 What products should W.W. Grainger carry at a store?

Q5 How should markets be allocated to DCs in terms of order fulfillment? What should be done if an order cannot be
completely filled from a DC? Should there be specified backup locations? How should they be selected?

The markets should be allocated according to the historical data, since it has been more than 80
years in market, they will definitely have the data.
Also, when there is data, they can change inventory. For eg: Industrials hubs need machine
spares while Neighborhoods need small home appliance parts.
 If an order cannot be fulfilled by a DC, So DCs should be in a proximity that one will act as
another's Backup.
 i e: DCs in the country should have some equal proximity; which will help when problem
with orders arises.
With certain substitutions, orders can be fulfilled such as product substitution, Manufacturer
substitution and Location substitution
Q6 How should replenishment of inventory be managed at the various stocking locations?

Since there are 1000s of suppliers, MRO Suppliers should use DCs as Cross Docking Centers, So that
suppliers only have to deliver it to one DC. This DC has to be in a quadrant, or a group of 5 or 10
states. This will also reduce transportation cost, and Decrease Suppliers burden. Also a criticality
method has to be used, So that there is provision for Critical and Strategic products. And both
Continuous and Periodic review of Inventory should be implemented

Q7 . How should Web orders be handled relative to the existing business? Is it better to integrate the Web business with the
existing business or to set up separate distribution?

Since there are dynamic changes in technology day by day, there is an increase
of E-commerce.
So, it is good to Integrate the web orders with the normal orders.
Here the stores and DCs should have an Electronic Data Interchange (EDI). So when a order is placed
or a sale happens the whole stores in US knows.
The information on paper invoices, purchase orders, requests for quotations, bills of lading, and
receiving reports will also be shared.
This is called Click and Mortar strategy.

08 What transportation modes should be used for order fulfillment and stock replenishment?

The transport should be mixed. The delivery of goods and Stock replenishment should be done using
same vehicles. Whenever a delivery goes out, if it is the farthest from a DC and nearer to the
Supplier, that vehicle can be used for replenishment. By this way, Supplier wont charge transit cost
and company will incur less cost.