What products should ww grainger carry at a store

UPPLY CHAIN MANAGEMENT

W.W. Grainger and McMaster-Carr: MRO Suppliers
W.W. Grainger and McMaster-Carr sell maintenance, repair, and operations (MRO) products.
Both companies have catalogs and web pages through which orders can be placed. W.W. Grainger
also has several hundred stores throughout the United States. Customers can walk into a store,
call in an order, or place it via the website. W.W. Grainger orders are either shipped to the customer
or picked up by the customer at one of its stores. McMaster-Carr, on the other hand, ships
almost all its orders (although a few customers near its DCs do pick up their own orders). W.W.
Grainger has nine DCs that both replenish stores and fill customer orders. McMaster has five
DCs from which all orders are filled. Neither McMaster nor W.W. Grainger manufactures any
product. They both primarily serve the role of a distributor or retailer. Their success is largely
linked to their supply chain management ability.
Both firms offer several hundred thousand products to their customers. Grainger stocks
about 300,000 stock-keeping units (SKUs), whereas McMaster carries about 500,000. Grainger
also provides many other products that it does not stock directly from its suppliers. Both firms
face the following strategic and operational issues:
1. How many DCs should be built, and where should they be located?
2. How should product stocking be managed at the DCs? Should all DCs carry all products?
3. 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?
4. What products should W.W. Grainger carry at a store?
5. 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?
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