Penn State Executive Programs: Growing Leaders With Continuous Improvement

When you are the leading broad-line distributor of facilities maintenance products, offering 1.8 million customers across North America more than 180,000 products through multiple channels, your distribution system has to be world class. For more than 80 years, Grainger, headquartered in Lake Forest, Ill., has been the leader in providing customers the maintenance, repair, and operating products they need by relentlessly focusing on service. And that has meant understanding customer needs and continually improving the way the company gets customers the right products at the right time and place.

Grainger has 13 large distribution centers across the United States complemented by more than 425 branches, allowing the company to fulfill customer needs quickly and conveniently. Of Grainger's 17,000 employees in the Unites States, more than 2,500 associates work in its distribution centers.  

As the leader in a $140 billion MRO industry with a 4 percent market share, Grainger is making the right investments for profitable growth. Grainger is adding more products, opening and expanding branches and recharging its e-commerce platform to help customers consolidate their purchases and gain efficiencies. It is also improving its system of delivering high quality products in the fastest, simplest, and most cost-effective way through its supply chain.  

While the company's supply chain management skills are industry-leading, its supply chain leadership wanted to help its management team raise the bar by acquiring additional knowledge.

That's where Penn State Executive Programs came in. Ranked No. 1 by Supply Chain Management Review, Penn State's Smeal College of Business is among the foremost institutions for supply chain management programs.

"We have found that our best improvements come when associates and managers work together to improve our processes," said Chris Sperry, vice president for distribution. "We were looking for a program to better prepare our managers to lead continuous improvement initiatives that would benefit our customers as well as our company and engage all of our associates in those efforts."

Early on in the process, Grainger decided that a university-based program would provide the best learning environment and instruction to meet the company's goals.

"We were excited about the opportunity to work with Grainger," explained Patrick Cataldo, associate dean for executive education at the Smeal College of Business. "In the process of creating a proposal, we were determined to get a total understanding of the issues and opportunities the company faced. We knew that our challenge would be to design a program that was strategically aligned to their objectives and matched to their real-world needs."

Penn State was one of several universities considered by Grainger.

"Each university was a leader in executive education with special expertise in supply chain," Sperry began. "Working with our Grainger learning organization, three finalists made proposals to our steering team and we selected Penn State because of the quality of their presentation. They stood out because they made the extra effort to understand our objectives and to learn about our business. Although not required to by our process, they visited one of our distribution centers to see our operation for themselves prior to developing their proposal."

Dean Kellogg, the director of distribution for Grainger's facility in Dallas, who was also responsible for the coordination of the educational effort across all centers, agreed with Sperry's assessment.

"In addition to going the extra mile to visit one of our distribution centers prior to making their proposal, we were impressed by Penn State's record of achievement. The executive program is highly regarded within the supply chain industry."

The Penn State team, including faculty and staff, emphasized the need for outcomes-based executive instruction. Once the desired outcomes were determined, Penn State Executive Programs carefully designed a program that would meet them.

"We wanted our partnership with Grainger to be seen as a world-class event," said Cataldo. "And by working closely together, we were able to fine tune the various modules as we moved forward. It was a very rewarding experience."

Gary Scalzitti, Grainger's head of planning and development for the distribution center operations, worked very closely with Penn State on the creation of the program.

"The instructors did a great job in learning about Grainger and using very specific and appropriate real-life references and examples," Scalzitti said. "The instruction style—with exercises, simulations, breakout sessions, and guest speakers built in—was very effective. The most useful part of the program was that we now have a common understanding and language throughout the distribution network as it relates to continuous improvement theory, concepts and practices. The participants could immediately put the learning to use back at their own distribution center."

Frank Chelko, instructor in operations and supply chain management at Smeal, served as the faculty director for the program.

"The most challenging part of this program was the learning innovation and faculty customization of every module to uniquely meet Grainger's needs and expectations," Chelko said. "As part of the final module, a specialized video was created of their end-to-end pick-pack-and-ship flow through a distribution center.  Participants were asked to critique the various processes by applying the tools and techniques that had been taught throughout the week. The result was a series of stimulating discussions about efficiency and effectiveness that could be attained throughout the system."
 
The program sessions included a wide variety of hands-on activities and real-world exercises. In one, Grainger employees acted as customers and opened boxes that had been shipped prior to the program. One had items that had been ordered from another company and others contained orders that had been packed and shipped by Grainger. The reflective exercise injected humor into the day and allowed the Grainger employees to see their operation more objectively from a customer's perspective.

By all accounts, from both Grainger leaders and Penn State staff and faculty, the program was a tremendous success.

"It went very well," said Sperry. "The faculty did a nice job mixing lecture with hands-on learning experiences. We ran six classes of managers through the program over a nine-month timeframe. Penn State did a great job gathering evaluation feedback and partnering with us to use that feedback to continually fine tune the program. We were also pleasantly surprised that the associate dean for executive education was fully involved with every program, which showed us a real commitment to client satisfaction."

"Our team felt that the executive education environment at Penn State was very conducive to learning," said Kellogg. "The University Park campus provided a neutral ground that was free of the routine distractions common to company facilities."

Sperry added that the program accomplished what Grainger was hoping for. "Managers who attended the early sessions enthusiastically recommended it to their teammates and were quite willing to cover extra duties during the weeks when later classes were scheduled. They learned new skills and felt they came out better prepared to lead continuous improvement efforts. They also appreciated the investment that Grainger made in them."

As Grainger continues to save customers time and money by providing them with quick and convenient access to a broad product line, the skills learned by the supply chain management team at Penn State will be key.