VIDEO: The World According to Erik Gershwind

IMTS: Welcome to “The World According To” on IMTS Plus. Today we're visiting MSC Industrial Supply CEO Erik Gershwind. So Erik, this is the quintessential family business. Tell me about the history and how you ended up in this business.

Erik Gershwind: MSC was started in 1941 by my grandfather Sid Jacobson on the lower east side of New York City selling tools literally out of the trunk of his car. It was a wonderful success story. I've been really privileged to have a front row seat. I'm 52 years old and I often get asked “When did you start in this business?” and my answer is generally around 51 and a half years ago because MSC has been in my blood literally my whole life.

Starting as a college student I would come and spend my summers at MSC and really from the bottom up sweeping floors, answering phones, picking orders. It gave me a chance to learn the business from the ground up.

The company was founded on three principles I would say by my grandfather. The first one is values. We live by a very tight set of values that track right back to him. I'm only the fourth CEO in company history. We've been around over 80 years and so it gives us the benefit of a lot of institutional memory. The second thing being growth. He believed that growth is the lifeblood of this company because growth is what allows us to reinvest for our customers, for our associates, for our suppliers, for the community. And then the third one is really around reinvention. My grandfather believed that you can never stand still, that if you're standing still you're actually moving backwards.

IMTS: There's a tremendous amount of technology right here out the door. Tell us about how that's developed, how that drives your business.

Erik Gershwind:  As some of the newer technologies, be it additive manufacturing, big data and analytics and others were coming to market, we saw many businesses posing this question to themselves “Is the future in technology or is the future in people?” We reached the conclusion that the answer was both and, not either or, that the answer lies in the power of the combination of the two. Technology that enables people to bring insights to our customers.

IMTS:  You know we do a lot of these interviews and when I ask about product line, it's generally a minute or two. I think we'd need the rest of the interview for the product line. Am I right about that?

Erik Gershwind:  Yeah, I guess we've become pretty broadline. I guess you'd call us a broadline distributor since the early days out of my grandfather's trunk. Over the years what we heard from our customers was the desire for convenience, to do one-stop shopping. We have been through rapid, rapid product expansion. Today we carry over 2 million skus representing over 3,000 suppliers and that number continues to grow. Harrisburg is one of five major distribution centers for the company. Each of those are in excess of 500,000 square feet. This network allows us to get pretty much anywhere in the continental United States next day for our customers.

IMTS: So let's focus a little bit on today. How's business?

Erik Gershwind: Our outlook on manufacturing and, in particular US manufacturing, is pretty bullish. If we think about the trends from reshoring and the different mindset and perspective that many of our customers have about the need for their supply chains’ proximity, we think about the infrastructure investment that's coming for this country. We feel really well positioned. Our outlook is quite good.

IMTS: Who are your customers and how do you serve them?

Erik Gershwind:  Our bread and butter is serving US manufacturing. No question about it. So our customer base is over 400,000 customers strong and really we are all about focusing on our customers’ productivity. If we go back a decade or two, the footprint, I would describe it as four or five large distribution centers and a network of people around that's supporting them. When I think about today, the MSC footprint, a lot of it actually exists inside of our customers’ operations.

Over half of MSC’s revenues of the 4 billion is what we would call solutions revenues. A solution is something beyond just a buy-sell transaction. A solution could be a vending machine, think a more sophisticated version of a candy machine that's dispensing tooling and helping our customers manage supply chain and get all sorts of reporting and data on jobs and usage.

I think about our implant program whereby we're placing MSC associates full-time inside of our customers to be their arms and legs, recognizing that all businesses now are facing a challenge with staffing.

IMTS: You need a lot of people. Where are we going to get people?

Erik Gershwind:  It's probably the single biggest issue facing most businesses, certainly in manufacturing. A couple of things that I think are a little bit unique and different about MSC. Number one would be a focus on succession and talent development from the inside, because the higher up you go in levels of experience, the more difficult it is to replace that person whereas it's a bit easier at entry level and we invest a lot in training our Associates.

The second one is diversity. We have put a lot of investment into DEI. We look back at the last however many decades for the manufacturing industry, really we've only been tapping into a portion of this country's population and talent.

IMTS:  What's the next big thing as far as the focus of your business and the future?

Erik Gershwind:  Our mission statement implies a state of restlessness, of never being satisfied. We've actually tried to codify this in the form of what we call a QBR, a quarterly business review. And the idea behind a Quarterly Business Review is getting around the table each quarter and talking about what worked, what didn't work, what were our goals, where did we exceed them, where did we fall short and the idea is to never be satisfied because I think that's how we will continue to power this economy.

IMTS: So, “The World According to Erik Gershwind” is…

Erik Gershwind:  Optimistic. I'll speak on behalf of all 7,000 plus of our associates. Manufacturing has had an incredible history to date. We sort of feel like it's just getting started. We're optimistic about the prospects for MSC in playing one small role in what is going to be a really great story over the next decade.

IMTS: So that's it for “The World According To”. Optimism is the view from MSC Industrial Supply. We'll see you next time on “The World According To” on IMTS Plus.