Managing Parts Inventory

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The warehouses of McMaster Carr are fully stocked with things that move the world, hold the machinery together and otherwise are found in every industrial shop in America. Managing that inventory requires a clever database, lots of automated shelving and a shipping system on par with FedEx. All these functions work very well and McMaster continues to improve it’s internal workings. McMaster works so well in fact, that sometimes the suppliers exclusively rely on McMaster to do the marketing, selling and distribution of their products. All products McMaster carries are carefully selected by staff and added to the catalog internally.

On the contrary, Amazon.com allows its suppliers to add their products into the Amazon catalog themselves, without relying on Amazon staff. This is a very useful feature of an online catalog, which McMaster Carr does not offer. This feature helps with expanding the inventory of products and reduces the need for data entry personnel, thereby allowing to sell products at lower cost.  In addition, in many cases, shipping is done by the supplier, not Amazon, unless Amazon makes the market for a particular product that ships from their own inventory. It seems that the Amazon model as an online retailer has an advantage over McMaster because of an added opportunity for suppliers to manage their own sales inventory rather than relying of someone else’s staff. Plus shipping sometimes is done by the supplier. This is not to say that McMaster needs better shipping options, they don’t; they offer hand couriers options if delivered within a few zip codes. Hand courier option is the best, bar none. Who does that? Well, McMaster, pharmacies, law firms and financial companies, not to be lumped in the same industry group. But McMaster does not give an option “ships directly from the manufacturer”.

Why is that after a hundred years of being in business, being quietly recognized, unanimously so by the engineering community as the leader in industrial products distribution, McMaster Carr keeps its catalog closed to vendors, unlike Amazon – the success story, and does not allow its vendors to do the shipping, unlike Amazon – the success story? In a word: control. McMaster serves different markets than Amazon. It’s more business-to-business oriented than business-to-consumer. In the business-to-business world the quality of product presentation and reliable delivery times matter more than consumer options. McMaster can justify a higher price because the buyers trust that the products are what the catalog says they are, they will be delivered when it says it will. This rock solid, remarkable reputation was earned over the years McMaster has been in business. Amazon earned its awesome reputation of a great marketplace by being a careful listener of the market and objective approach to managing it’s catalog features. Neither company is all that optimized for search engines, but they do not have to. People already know where the water hole is, they just go directly there.

Speaking of the business-to-business world of McMaster Carr, is there a better way yet for engineers and scientists to buy industrial components? First of all, what would constitute a “better way”? Does this mean better quality of parts? Less expensive? Quicker delivery? All CAD files are readily available? The price is instantly quoted? McMaster Carr already offers all of this, yet they do not offer custom engineering, a wide variety of products but not deeply concentrated per product line, sometimes the presentation is lacking and can have more technical information, and distribution is limited to North America. Perhaps, the customer needs to work directly with the manufacturer of a critical component in order to design a better overall system. Not this either.

Yes, it seems there is a better way for industrial product distribution and marketing. It’s a combination of the best of Amazon and McMaster, combined with the Dropbox file sharing for easy exchange of CAD files between the manufacturer and the development engineer. It’s an online catalog where manufacturers can manage their revenue products directly on a sales platform. It’s a data management system that helps both the buyer and the seller to exchange information, keep track of all that exchange and as a result have a better quality design at lower cost and shorter lead time. This is something we need to develop yet.

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