Graybar Realizes Inventory Gains with GAINSystems

Inventory and people are a distributors largest investment. Finding a way to improve the productivity of both is key to improved sales and net profitability.

With rising inventory valuations due to commodity price increases and recognizing that the pandemic may have altered your inventory management system algorithms with the “ups and downs” of the market, perhaps inventory management is on your agenda?

It recently was for Graybar according to a case study released by GAINSystems, a firm that helps companies optimize their supply chains.

According to the case study, Graybar realized:

• 34% reduction in purchase order activity
• 8% reduction in transfer orders
• 13.5% increase in sales (in the year following implementation, not necessarily last year as the case study doesn’t state.)

Graybar implemented GAINSystems’ solution based upon an immediate need – its planning optimization tool that integrated with their SAP system was nearing end-of-life.

Prior to the implementation Graybar’s Material Availability was 89%. At the end of year one, it was 93%, hence helping them improve service levels which led to the sales increase. (and we know that improved inventory leads to improved customer satisfaction, customer retention and the opportunity for account penetration.)

During a “proof of concept” developed prior to implementation, GAINSystems projected that Graybar would reduce inventory by $14M (and maybe Graybar reallocated this into other stock), receive $1.7M in annual receiving activity reductions and $2.7M in annual expediting activity reductions.

As a disclaimer, Channel Marketing Group doesn’t know GAINSystems, however, in a recent conversation with distributors, the topic of “benchmarking” and the need for “operational improvement” for productivity / cost-savings was discussed, hence we’re sharing this information. Interestingly with GAINSystems, Graybar isn’t their only endeavor into electrical distribution. Their website highlights electrical as a key vertical and they mention having worked with Mayer Supply, McNaughton-McKay, Border States, Vallen (a division of Sonepar), Rexel and Summit Electric.

Whether they can “scale” their solution for small and mid-sized distributors is unknown.

They also work with manufacturers (which, for many, they are “sourcers” and “distributors”, so the solution can be similar.)

And in a time when “time = money”, improved productivity is essential.