Grainger uses a multichannel business model to serve more than 1.6 million customers
of all sizes with multiple ways to find and purchase products through a network
of branches, field sales forces, direct marketing through catalogs and Internet
channels. Orders can be placed via telephone, fax, Internet or in person. Products
are available for immediate pick-up or for shipment. Grainger reports its operating
results in three segments: Branch-based Distribution, Lab Safety and Integrated
Supply. The Branch-based Distribution businesses primarily serve the needs of
North American businesses for facility maintenance products. Lab Safety Supply,
Inc. (Lab Safety), a direct marketing company, serves customers who purchase safety,
industrial and other products. Integrated Supply serves customers seeking to outsource
some or all of their indirect materials management processes.
Branch-based Distribution
The Branch-based Distribution businesses provide North American customers with
product solutions for their facility maintenance and other product needs through
logistics networks which are configured for rapid product availability. Grainger
offers a broad selection of facility maintenance and other products through
local branches, catalogs and the Internet. The Branch-based Distribution businesses
consist of the following Grainger divisions: Industrial Supply, Acklands-Grainger
Inc. (Canada), FindMRO, Export, Global Sourcing, Parts, Grainger, S.A. de C.V.
(Mexico) and Grainger Caribe Inc. (Puerto Rico).
Lab Safety
Lab Safety is a direct marketer of safety and other industrial products to U.S.
and Canadian businesses. Located in Janesville, Wisconsin, Lab Safety primarily
reaches its customers through the distribution of multiple branded catalogs,
including a CD-ROM version, and other marketing materials distributed throughout
the year to targeted markets. Customers can purchase products through www.labsafety.com,
www.benmeadows.com and www.gemplers.com.
Integrated Supply
Integrated Supply serves customers who have chosen to outsource some or all
of their indirect materials management processes. This service enables customers
to focus on their core business objectives. Integrated Supply offers a full
complement of on-site outsourcing solutions, including business process reengineering,
inventory and tool crib management, purchasing management and information management.
Digital
In April 2001, Grainger announced it was discontinuing the operations of Material
Logic. All of Material Logic’s branded e-commerce sites were shut down with
the exception of FindMRO, which remains in the Branch-based Distribution segment.
Competition
Grainger faces competition in all markets it serves, from manufacturers (including
some of its own suppliers) that sell directly to certain segments of the market,
wholesale distributors, catalog houses and certain retail enterprises.
Grainger competes with manufacturers and other distributors primarily through
local product availability, efficient service, sales representatives, competitive
pricing, catalogs (which include product descriptions and, in certain cases,
extensive technical and application data), electronic and Internet commerce
technology and other efforts to assist customers in lowering their total facility
maintenance costs. Grainger believes that it can effectively compete with manufacturers
on small orders, but manufacturers may have an advantage in filling large orders.
