MSC Industrial Supply Co. Retools to Meet Complex Market Expectations

A leading North American distributor of metalworking and MRO products takes significant strides in its digital transformation with RISE with SAP as the catalyst.

By Brianna Shipley, Director of Editorial, SAPinsider 

Key Takeaways 

  • MSC Industrial Supply Co. takes significant strides in its digital transformation with RISE with SAP as the catalyst. 
  • SAP solutions hosted on Google Cloud Platform create a scalable environment and help facilitate rapid change. 
  • Moving into the RISE with SAP environment without any disruption to users completed phase one, with phase two underway to streamline e-commerce interfaces in the cloud. 

MSC Industrial Supply Co.’s (MSC) decades-old success is founded on a philosophy of integrity, respect, and hard work that supports a commitment to its customers. But these longstanding values and traits don’t mean outdated for MSC, a leading North American distributor of metalworking and maintenance, repair, and operations (MRO) products and services. Its roots are founded in progress, innovation, and technology.  

Founder Sid Jacobson began his business in 1941 (originally coined Sid Tool Co.) and would become the first to use technology in distribution, setting the stage for the company’s reputation as a successful dot com business built inside of the 80-year-old company. 

Digital moves continue to support MSC’s changing customer landscape with digital transactions accounting for approximately 60% of the company’s revenue. Today, MSC has its sights set on modernized systems and unified communications that will help the business align with new ways of thinking about software, according to Charlie Bonomo, Senior Vice President and Chief Information Officer at MSC. The app store mentality, for example — which boasts online libraries and the ability to quickly install and uninstall apps with one click —  is shaping customer and stakeholder expectations, requiring MSC to spin up applications that are fast, easy to use, and dynamic. 

Recent upgrades have included a CRM deployment, a move to the cloud, implementing digital pricing solutions, and leveraging intelligent technologies like artificial intelligence and machine learning to transform MSC into a dynamic business differentiated from its competitors. 

“We were looking to transform the business at every level prior to the pandemic. COVID-19 made us brave enough to throw gasoline at it and RISE with SAP is the catalyst enabling us to dive into the future,” Bonomo says. 

Strategic Partners Google Cloud and SAP Help MSC Create the Foundation for Future Success  

“As a company, we always talk about looking to where the puck is going, not where it is now,” Bonomo says. 

To deliver on its commitment to its customers and stakeholders, MSC is establishing the synergy and integration it needs on the back-end to provide nimble, scalable, and easy-to-use applications on the front-end.  

Ultimately, MSC is setting out to streamline and consolidate the company’s software and bring different applications under one umbrella, leveraging SAP’s expertise and holistic approach to transformation through its RISE with SAP offering. According to Bonomo, the collaboration between SAP and MSC’s hyperscaler partner Google Cloud is a significant benefit of being a RISE with SAP customer. Running SAP S/4HANA Cloud on Google Cloud Platform creates a scalable environment, says Bonomo, and helps MSC consolidate its IT footprint and refocus IT resources on strategic priorities. 

“With the level of integration that we’ve experienced from SAP and based on the way RISE with SAP is architected and the operational support that we’re receiving from Google Cloud we’ve been able to consider how we can expand our current technology into other areas of the business. For example we’re considering how to integrate SAP Ariba functionality into our procure-to-pay process and how to leverage features of SAP Analytics Cloud for financial planning and analysis,” Bonomo says. 

A move to the latest version of SAP S/4HANA by the end of 2022 will bring MSC’s transformation full circle, enabling the business to close faster, gain more intelligence through reporting, and integrate third-party products that support continued innovation.  

“This upgrade will bring additional business benefits. All of our stakeholders are winners in this transition,” Bonomo says. 

Focus and Transparency Build a Team 

At the time of this publication, MSC has moved to SAP S/4HANA Cloud on Google Cloud Platform and is now in phase two of its RISE with SAP business transformation, moving its e-commerce environment and its entire server infrastructure into the cloud to achieve streamlined interfaces.  

Bonomo refers to this five-month process as “the plumbing phase.” The company is measuring success in phase two based on whether the interfaces are resilient, scalable, and transferring data in the way the business expects. He anticipates that phase two will be completed by September 2021 and says that it has been successful so far. 

Phase one took about five months to complete, Bonomo says, and required a three-step process to lift and shift from the company’s existing landscape to SAP S/4HANA Cloud. “The goal around phase one was to make it completely transparent to our users,” Bonomo says, “and I’m happy to say that was entirely successful. We completed phase one in January of this year and the only people who really knew that we made this transition was IT.” 

Bonomo attributes much of the success so far to the collaboration between the company’s strategic partners, SAP and Google Cloud. 

Partnerships are built over time and they don’t go away overnight. Our relationships with our strategic partners are dynamic. Today, our relationships with SAP and Google Cloud are multi-layered and growing.” 

In addition to help from its strategic partners, Bonomo acknowledges that the IT team has been critical to this transformation. 

“Early on in the project we saw that this was no different from how we’d staff an SAP implementation. We followed one of the golden rules: dedicate your best people and make sure they’re focused and not working on multiple projects.” 

The theme of transparency has remained important throughout the transformation and bears repeating. Bonomo says this, as well as giving the team time to get up to speed on changes, was a necessary and foundational approach to mitigate mistakes and complete the project on budget and on time. 

“A Complete Symphony” 

Bonomo is very happy so far with the results of MSC’s RISE with SAP transformation, with one regret: “I wish we started sooner,” he says. “The pace of business and change is accelerating every day. I can’t wait to get to the end point because I know the benefits it’s going to bring to the company.”  

Immediate benefits, according to Bonomo, include being in a scalable environment, having a consolidated IT footprint, being able to off-load business continuity, disaster recovery, and some maintenance, and having security managed in the Google Cloud Platform environment.  

And, the company has been able to go live without causing any disruption to its user base. 

He refers to the process of implementing RISE with SAP as “a complete symphony” and reflects on how far the company has come, with no plans to slow down.  

“We aren’t sitting still. We need the ability to adapt and support all of our stakeholders, who are moving very quickly, by providing them with nimble, scalable, and easy-to-use applications. If we’re sitting back at all it’s to ask, where is the world going? And clearly, that is toward the cloud and offerings like RISE with SAP.” 

What Does This Mean for SAPinsiders? 

Don’t be afraid to put your A-players in the game – but make sure they can focus. When undergoing a business transformation, it makes sense to assign your best people to the job. But if they’re being pulled in too many directions, you won’t see the results you expect. Make sure your team, both business and IT, can dedicate their time to the project at hand. 

Build in time for technical staff to adapt to change and process new information. A transformation project creates a lot of new learnings and capabilities. Give your team the time they need to learn and understand these new technologies. This foundational requirement will ensure solid expertise and workflow moving forward as well as accelerating the deployment itself.  

 Plan and prepare for how new technologies will integrate with your existing systems. Just because your strategic partners have taken over operational tasks like maintenance, security, and disaster recovery doesn’t mean you shouldn’t still consider these components or how they impact the business. Ask questions like, do we need to redesign our network? How is our storage going to change? How will day-to-day workflows be impacted? These changes must be considered as part of the larger picture.  

Company details  

MSC Industrial Supply Co. 

  • Leading North American distributor of metalworking and MRO products and services 
  • Over 1.9 million product offerings 
  • 80 years of deep expertise working across industries 
  • NYSE: MSM 

Annual Revenue: Approximately 3.2 billion US dollars 

Employees: 6,200 + 

Headquarters: Melville, New York and Davidson, North Carolina 

SAP Solutions: RISE with SAP, SAP S/4HANA Cloud, SAP SuccessFactors, SAP Ariba, SAP Analytics Cloud, SAP Concur, SAP Commissions, Qualtrics, SAP Customer Data Cloud   

Watch a short video and hear what Bonomo has to say about the importance of partnerships with strategic partners like SAP and Google Cloud, early benefits of MSC’s digital transformation, and important lessons learned so far.