Efficiency and Effectiveness of a good Supply Chain.

Efficiency and Effectiveness of a good Supply Chain.ByAkhil AGRAINGER AND MCMASTER CARR MAINTENANCE REPAIR AND OPERATION SUPPLIERS

W. W. Grainger

The company was founded by William Wallace Grainger in 1927 inChicago, Illinois.W. W. Grainger, Inc.is aFortune 500industrial supplycompany founded in 1927 inChicago.Revenue is generally from business-to-businesssales rather thanretailsales.Specializing in next day delivery of Maintenance, Repair and Operations(MRO) materials and supplies. Grainger operates in 22 countries and serves customers in more than 150 countries through its export business.

McMaster-Carr

McMaster-Carr Supply Companyis a private, family-owned supplier to industrial and commercial facilities worldwide.McMaster maintains over 555,000 products in a catalogue offering a variety of mechanical, electrical, plumbing, and utility hardware not usually located from a single source.The company is based inElmhurst,Illinois.The McMaster app was released in May 2013 for theiPadand March 2014 forAndroidtablets.

SummaryMcMaster Carr and Grainger are both MRO 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 company 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 , Deploying new DCs and Stores, Usage of proper Inventory Tactics to save costRelational Level :- Need of efficient management system, Proper use of IT (Websites, Management Systems), Reduction of Transportation Cost.

Q1Grainger 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 .Q2The 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.Q3Should 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 itemsInventory disaggregation for moving goods

Q4Theres no room for waste when it comes down to your inventory. Inventory- More for Fast moving, Less for Moderate moving , and much less for slow moving.But the sales should be divided into 2: Shipping and Retail.And according to both order forecast, Inventory should be maintained.Also , Since they have website; Use it as a tool: Deal of the Day, Bonus Items, Put the Items on Sale on Slow moving goods.

Q5The 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 anothers 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. Q6Since 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 implementedQ7Since 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.Q8The 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.Value AddedFreight tracking Web pages.Electronic Data Interchange (EDI)working together with the customer to identify the parts (Design Collaboration).Auto-Reorder for the products that is used regularly.E-ProcurementOnline Order Management System.Inventory for just-in-time and emergency needs of businesses.Thank You