MSC Industrial Direct

July 8, 2011 – 6:28 pm

MSC Industrial DirectBusiness Profile

MSC Industrial Direct Co., Inc. (MSC) is a direct marketer of various industrial products to various customers including industrial customers all across United States. MSC Industrial Direct distribute rang of industrial products to fulfill the requirements of its customers such as MRO (maintenance, repair and operations) supplies requirements.

The company ( excluding J & L) provides more than 500,000 SKUs or stock keeping units through quarterly, monthly, and weekly promotional catalogs, master catalogs, brochures, newspapers and Internet, including company’s website, MSCDirect.com. The company has 95 branch offices and 7 customer centers that include four branch offices and 3 customer fulfillment centers, which are the part of J&L, acquired by the company. The complete integration of J&L with MSC is expected to be completed by end of fiscal year 2007. Till then J&L’s few fulfillment centers for customers will be operational and later on will be merged with MSC’s current logistics network. J&L provides various metal cutting tools, drills, abrasives, accessories for machine tool, gages, and tools for precision measurement and various other tools.

The company offers integrated and high value solutions at lower cost to purchase, administration and management of MRO needs of the customers. The company manages and maintains the purchasing process of the customers by reducing supplies costs and total MRO. To reduce the costs of MRO supplies, company offers several strategies to its customers. Company’s high quality product provides reduction in administrative burden by dealing with suppliers for customers MRO needs. The company provides delivery of its product on same day that reduce the carrying costs and inventory investment. The company also offers the e-commerce facility.

MSC Industrial Direct MSC Industrial Direct MSC Industrial Direct

The company has various customers including Fortune 1000, government agencies like GSA (General Services Administration) and USPS (United States Postal Service). The Company has customers in all 50 states of America and primarily operates in US, through seven fulfillment centers for customer (six centers in US and 1 in UK) and 95 branch offices (94 branches in US and 1in the UK).

The company genesis was start in 1941 but MSC Industrial Direct was incorporated in 1995 in New York. On same year company has listed on New York Stock Exchange under the ticker of “ MSM “.During fiscal year ending on August 26, 2006 the company registered a net sales of $1.3billion which is an increase of 19.8% compared to that in FY 2005. This increase is primarily due to government program and national account sectors.

In June 2006, company acquired all outstanding stock of J&L, which was a subsidiary of Kennametal, Inc. The company acquires J & L through its subsidiary, MSC Acquisition Corp. For this acquisition, purchase price was about $349.5 million. Apart from this acquisition of J&L, company and J&L entered into some business arrangements, such as distributor agreement, trademark license agreement, private label agreement, and administrative services agreement.

Products

The company (excluding J & L) provide more than 500,000 SKUs that represent various MRO products, including cutting tools, tooling components, measuring instruments, fasteners, abrasives, flat stock, hand machinery, power tools, raw materials, plumbing machinery, electrical supplies, power transmission etc. The company continuously add new quality product to existing categories. The company offers products from more than one manufacturers and dealers at different prices. Quality levels of the product offer various alternatives for product selection. This type of selection provides various choices to the customer for appropriate product on cost effective manner.

Company’s technical support employees and sales representatives help customers in cost-saving purchases of products. This approach gives repeat business. It is company’s strategy to lower the supply costs of industrial customers. The company directly purchases (excluding J&L) all products from about 2,100 suppliers. Company is not dependent on any suppliers or small group.

Customer Fulfillment Centers

The company has many centers for customer fulfillment. Every product is carried as stock. Approximately 84% of sales happen through customer fulfillment centers. However specialty or customized products with very large orders are directly shipped from manufacturers. Currently company has seven such centers. They are located in Atlanta, Georgia; Harrisburg, Pennsylvania; Elkhart, Indiana and Reno, Nevada. There are such centers that were part of acquisition of J&L are Livonia, Michigan, Elk Grove, Illinois; and Wednesbury, United Kingdom.

Publications

One of the important tools for company is its master catalog prepared annually. This again supported by promotional and specialty catalogs and brochures. J&L prepares master catalog twice in a year. The promotional and specialty publications are for specific customers like facilities management, metal fabrication and safety and janitorial. These catalogs and brochure are mailed to customers who are there in database and have good purchasing history. Also such customers pose as potential ones with more requirements. Thus specialty catalogs are more targeted for customers and are effective & more efficient than advertisements.

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