I read on Hamasaki's elist about Grainger ecommerce screwup

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Today on Cory Hamasaki's onelist someone (who claimed to work for Grainger in the ecommerce division) claimed to hear of major screwups there. He posted links to a financial forum that also had some info. The funny thing though was that he was someone who had never posted before. There are about 650 people on that list, but most just lurk. I will try to cut and paste later (unless someone beats me to it), I have to run now... If this rumor is true, it makes you wonder about other companies...?

-- Pramada (pram108@yahoo.com), January 12, 2000

Answers

Other companies, and other COUNTRYS.

-- Earl (earl.shuholm@worldnet.att.net), January 12, 2000.

Our local Coast to Coast hardware store manager informed me that they are merging with Grainger. I was ecstatic, for myself and for where I work. Maysville is kinda off the beaten cow trail, and getting hydraulic fittings is difficult.

Anyways, I go in there last week to get some hardware for my tinfoil EMP shielded solar panels, and asked how that was progressing. He informed me that it was "going very badly" and that they as yet "couldn't order anything". Shipmments are being 'enscrewed' up and lost, and the situation looked hopeless.

That's really discouraging, especially if TEOTWAWKI holds off for a while, since I can always find what I need in The Big Red Book. My manager bud is going to keep me informed, so I'll keeps ya posted.

Nuts & Bolts Kook, or maybe just plain Nuts

-- Y2Kook (y2kook@usa.net), January 12, 2000.


Y2Kook.

How are your panels emp proof? Have you built a faraday cage around them? What impact on performance? What are you using for a charge controller?

Vale et graci.



-- pliney the younger (pliney@puget.sound.snowedin), January 12, 2000.


Bloomberg News, via New York Times, 8 Jan 2000

W.W. Grainger Warns About Fourth-Quarter Earnings

W.W. Grainger Inc., a distributor of compressors, pumps,and hand tools, warned yesterday that its fourth-quarter earnings might be as much as 45 percent less than estimates because of higher costs and inventory problems. The company had been expected to earn 54 cents a share, according to analysts polled by First Call/Thomson Financial.

W.W. Grainger, which sells more than 550,000 repair and maintenance items, said it experienced slowdowns and had had problems processing transactions during the quarter. It also had trouble keeping track of inventory because of a resource planning system it installed in 1999. The company said it had higher employee compensation costs because of the new system. W.W. Grainger shares fell 68.75 cents each, to $44.375.

-- Cheryl (Transplant@Oregon.com), January 12, 2000.


January 10, 2000 - WSJ - [For educational purposes]

W.W. Grainger Blames Software, Higher Costs for Weak Quarter

CHICAGO -- W.W. Grainger Inc. became the lates company to stumble after installing complicated "enterprise resource planning" software.

Grainger, a big distributor of industrial supplies, has drawn high marks for its successful early adoption of Internet-based sales. But it dismayed investors Friday by disclosing fourth-quarter earnings will come in well short of estimates because of computer troubles. Grainger said earnings were hurt by a downward adjustment of its inventory on hand, though it didn't provide specifics of the adjustment.

Grainger began installing the ERP software in the second half of 1998 and completed the changeover in November 1999. "As a result of problems with the installation," the company said Friday, Grainger has experienced "substantial systems and transaction-processing disruptions" that hampered the distributor's order-handling systems.

The problems pinched second- and third-quarter profit in addition to hurting results in the fourth quarter. But the jarring inventory mix-up that the company's annual inventory review uncovered during the fourth quarter was an indirect result of the order system's troubles: The system didn't perform certain costing procedures properly, and inventory-control measures were thrown into disarray.

Per-share earnings for the recently ended quarter, Grainger warned, may be as low as 30 cents, rather than the 54-cent-a-share First Call/Thomson Financial consensus. Grainger shares fell sharply Friday morning but recovered as the market surged. At 4 p.m., Grainger shares were down 75 cents at $44.3125 on the New York Stock Exchange.

Grainger's ambitious new system is built around software from SAP AG. The German company's software already has been the focus of high-profile installation problems at other major companies, but Grainger wouldn't blame SAP. "We don't think it's their system," said a spokeswoman, who contended the financially damaging lapses are simply born out of the daunting complexity of the installation process. ERP software helps knit together a company's manufacturing-related processes, purchasing and inventory management, as well as order-taking and finance-management functions.

Putting such an oversight system in place at a major company is expensive and technically challenging, and Grainger isn't the only company to run into trouble in the course of installing such software. In September, Hershey Foods Corp. said problems with a $112 million system that used software from SAP and other providers had delayed its processing of customer orders, costing it sales during Halloween. Whirlpool Corp. subsequently disclosed problems with its newly installed SAP-based ERP package as a reason for a series of shipment delays.

SAP is by far the leading player in the ERP-software market, with other players including Oracle Systems Corp., PeopleSoft Inc. and the Netherlands's Baan AG. A spokeswoman for the German company's U.S. unit, SAP America Inc., Newton Square, Pa., said focusing on occasional difficulties in the complex installations ignores the company's numerous problem-free implementations, at major companies such as Colgate-Palmolive Co. and Reebok International Ltd.

SAP's U.S. unit said a special team has been deployed to help Grainger "resolve its challenges in optimizing the new enterprise-software solution." Officials made a point of noting that the implementation "includes products and services from other leading technology providers," including hardware provider Sun Microsystems Inc. and database provider Oracle.

-- Cheryl (Transplant@Oregon.com), January 12, 2000.



Pramada,

I'd appreciate it if you could cut & paste that article. I'd like to see which financial forum is discussing this.

The day of the announcement, Grainger dropped from around 66 to 44. BUT ... in the past few days the stock has gone up 6 points, and closed at 50 1/8.

There is NO way this problem is behind them. I usually don't short a stock ... but, this may be a good short candidate.

Thanks.

-- Cheryl (Transplant@Oregon.com), January 12, 2000.


WHOOPS! Made a mistake. Prior to the announcement the stock closed at 44.375. After the announcement, it closed down at 43.56. Not much of a drop.

The day after the market absorbed the news about the computer chaos ... and that fourth-quarter earnings could be as much as 45 percent LESS than estimates ... the stock price starts to skyrocket ... UP!!

Because of this press release ....

Grainger Separates its Internet Commerce Businesses

Promotes Executives To Run Grainger.Com and Orderzone.Com

CHICAGO, Jan. 10 /PRNewswire/ -- As a result of the explosive growth in its Internet Commerce business, W.W. Grainger, Inc. has separated it into three distinct units. James T. Ryan, a nineteen-year veteran of the Company, becomes President of Grainger.com. Daniel Hamburger, previously President of Grainger Internet Commerce, becomes President of OrderZone.com. In addition, the Company has hired Robert S. Wasserman to become Vice President, Grainger Internet Commerce, and to head up the Grainger auction site.

Grainger Group President Donald Bielinski said, "After growing at the breakneck pace we did in 1999, it became clear that we needed to separate the businesses to continue to provide focus, speed and agility for 2000 and beyond. I am excited about the opportunities these businesses offer Grainger and I am confident that the management talent we have in place in Grainger's digital businesses will allow us to grow still faster."

Grainger Internet Commerce sales grew by more than 650 percent last year. The run rate for the month of December was $200 million as the business ended just over $100 million for the year. Grainger.com, the original web site, offers customers more than 220,000 different products that Grainger carries-well beyond the 80,000 products in the catalog. OrderZone.com, launched in May 1999, allows small and medium size customers to order from Grainger as well as five other suppliers of electronic parts, lab safety supplies, office supplies, laboratory equipment and supplies and uniforms. Grainger Auction, launched in November, provides customers with discontinued inventory they can buy through an auction process. Because of the different approaches, the Company felt dedicating executives to each specific business proposition would enhance the growth rate. In addition, Grainger launched another web site, FindMRO.com, in November to source products not typically used by a customer. FindMRO is not affected by these moves.

Ryan, 41, has most recently been Vice President, Information Services, for W.W. Grainger, Inc. He joined Grainger in 1980 and has served in product management and as president of Grainger Parts. He is a graduate of Miami University as well as DePaul University, where he received his MBA.

Hamburger, 36, joined Grainger in October 1998 as President, Grainger Internet Commerce. Under Hamburger, the sales have grown from $13.5 million in 1998 to $102 million in 1999. Prior to joining Grainger, Hamburger started and ran the Internet Services Group of Experian/Metromail. He also was a consultant with Andersen Consulting and Bain & Company. Hamburger earned a bachelor's and master's degree in Industrial Engineering from the University of Michigan and an MBA from Harvard Graduate School of Business Administration.

Wasserman, 40, joins Grainger from Ameritech Corporation where he was vice president of marketing for Ameritech's Small Business and Enhanced Business divisions. Prior to Ameritech, he worked at AT&T. Wasserman graduated in 1981 from the University of Michigan with a bachelor's degree in business administration.

W.W. Grainger, Inc. (NYSE: GWW), with 1998 sales of $4.3 billion, is the leading North American provider of maintenance, repair and operating (MRO) supplies, services and related information to businesses and institutions. GWW shares are traded on the New York and Chicago stock exchanges. For more information, visit Grainger on-line at www.grainger.com .

-- Cheryl (Transplant@Oregon.com), January 12, 2000.


Cheryl - (and anyone else interested) - I tried to cut and paste but it didn't work. I never TOUCHED a computer until 1 year ago. I can't figure out how to do it - maybe tomorrow. If anyone wants to email with with suggestions how to do it I'll try harder!

-- pramada (pram108@yahoo.com), January 13, 2000.

Original Message From Cory's Listserv ========== Message: 25

Date: 12 Jan 2000 18:30:51 -0000

From: xxxxxxxx@xxxxxxxx.xxx

Subject: Severe Y2k Problems for Grainger

Hello fellow Hamasaki-ites-

I have been lurking on this mailing list since it was first established. I haven't submitted until now because I felt I didn't have anything concrete to report. Well, this morning, that changed.

What I'm reporting on is coming directly from the EDI group for the company which I work for. I'll admit that I've only heard several minutes of details ... but, from those scant few moments, I've decided that I've got something worthwhile to report.

This company with "more than $3 billion in annual sales" (quote taken from their website) has halted ALL ELCTRONIC COMMERCE due to Y2k problems. I work in my companies E-Commerce Department (as a developer) and over heard our EDI guy talking about this just this morning. He's pissed because they (Grainger) aren't telling anyone.

From what I've gathered, via only several minutes of discussions, is that their EDI came crashing to a halt and isn't projected to be up and functioning until SECOND QUARTER!!! I haven't heard anything about simple web orders or such ... just the EDI spin. I'll keep listening and pass along any further information.

================

We've had a number of reports regarding problems with EDI. This is getting really interestin

-- Neo (LostintheMatrix@aol.com), January 13, 2000.


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