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Lake Forest
Reese, Richard
 USA 
W.W.Grainger, Inc.
 		Richard J. Reese
 Executive Director, I/S
W.W.Grainger, Inc.
  100 Grainger Parkway B3-E22 Lake Forest (Illinois)  USA (60045-5201)
Email: reese.r.j@grainger.com Web site:www.grainger.com
 Biography
 Richard J. Reese was named Executive Director, Information Services, in October 1997. Mr. Reese leads technical strategy and direction for seven of Grainger's business operating units. He is a member of Grainger's Cross Business Architecture Team and acts as technical consultant to Grainger's Business Development and Strategy planning groups. Prior to joining Grainger, Mr. Reese was Director, Systems Architecture, for NOVUS Services, Inc. (Discover Card) where he led the conversion of the nations largest credit card portfolio to a parallel processing platform. Prior to working for Discover Card, he was a Certified Systems Architect in IBM's Consulting Division.
 

Grainger's B2B Technical ArchitectureCopyright 1999, W.W.Grainger, Inc.

 Grainger has always been a business-to-business (B2B) rather than a business-to-consumer (B2C) oriented company. Grainger has supported Electronic Data Interchange (EDI) for its customers for years. The addition of its two web sites in the last couple of years has increased the number channels in which customers can transact with Grainger.
 EDI has historically been expensive for customers to implement. Usually only the larger customers can take advantage of being networked directly into Grainger. Grainger's web sites have been designed to match customer profiles that typically do not have complex procurement rules. Also, Grainger's item sourcing operation has been in place for a few years, but primarily serviced customers indirectly through handling requests sent from Grainger's business units. Lastly, Grainger has invested in its product information over the years and possesses the best electronic catalog content in the indirect materials industry.
 Customers/buyers require access via the inexpensive Internet to supplier products. To meet this challenge, Grainger must extend its current set of e-commerce offerings.
 

Supply Chain Integration Models

 Supply Chain Integration can be accomplished using one, or a combination, of three basic architectures. The first being, the Distributed Content Model is the least complex, but is the most disconnected of architectures. In order of complexity and natural progression, the second is the Hosted Content Model. Third, and most complex, but also most functionally robust, is the Transactional Model.
 The Distributed Content Model is based upon the periodic delivery of Grainger's content directly to its customers in electronic format.
 This model has the advantage of being easy to implement, but lacks transactional integrity. It is the least desirable from Grainger's long term perspective and may enable others to make sizeable markets for indirect materials procurement.
 
 
 The next basic architecture assumes that Grainger's content can be obtained from a network service. This model provides a partial solution to completely bridging the buy side with the sell side.
 
 
 As can be seen in the above figure, this model supports access to the supply chain from the buyer "calling out" from behind the firewall into a "Market Switch". The Market Switch brokers requests to various suppliers that have been hooked up to the switch via the Internet. Content is available either behind the customer's firewall or can be reached over the web. Integration of order requests is carried out through a transactional interface, using XML, back to the buy side system. In this model, orders are not sent to the supply chain using the Internet. They are presented using what ever means are used currently (EDI, FAX, Phone). A variant of this architecture is the processing of an order generated directly on the Market Switch. Orders handled in this manner are still disconnected from the buyer's EAM and ERP systems and must be re-entered, usually by manual means.
 The third, and most complex, of the models involves executing orders in pseudo real-time using the Internet as the transport medium. The Transactional Model can naturally evolve from the Hosted Content Model. It carries some of the basic attributes of all three models and is the ultimate answer to supply chain integration over the Internet.
 
 
 The Transactional Model supports two-way communications using standardized XML formats between the buy side and sell side systems. In its advanced stages, transactions can be designed prior to being committed to by the sales chain. Information can be stored in the Market Switch to enhance the buyer's experience, or solve their problem directly, without complex and lengthy on-line sessions with the Supply Chain. This model is a natural migration from the Distributed Content and Hosted Content models. Buy side systems will be enabled with content, then provided with standardized access to the Market Switch. In its end state, the architecture enables near real-time order processing from buyer to seller.
 
 

Business Process Flows

 This section defines the business process flows supported by Grainger Connect . Flows are divided into Required or Optional categories with supported release level indicated. Business process flows may differ depending on whether the buyer uses its own buy-side application or Grainger's buy side application and whether there is an intermediary network involved in the connection to Grainger Connect .
 
 
 Figure 1 above shows the basic flows required for a customer to set up a new account with Grainger or any other supplier connected to Grainger's network. Since the connection point will not manage the financial settlement in Release 1, valid account numbers are required with each supplier. The buyer must utilize the registration process and screens available on Grainger's web portal site to gain authorization.
 Buyers may search the Grainger catalog or read content on Grainger's web site without having their session encrypted with SSL2. However, when they enter a valid Account Number, the session will become encrypted. Grainger assumes that buyers have logged on to their buy-side application or the intermediate network, and will not validate the User ID and Password. Buyers that access Grainger's web site directly (outside a buy-side application) will be asked for their valid User ID and Password in addition to their account number.
 
 
 Since Grainger associates Customer Specific Prices with an account, the Grainger Account Number will determine the specific business unit the buyer is doing business with. Grainger maintains unique account numbers for unique contractual relationships with buying companies.
 The following figure identifies the flows involved in checking prices and for product availability. Since no order is being processed at this time, only general availability can be derived from the supplier network. General availability refers to giving the potential buyer information about whether the products requested are in stock or not. In the case of Grainger Industrial Supply, the location of the closest Grainger branch (based on buyer provided zip code) with an "in stock" item may be given. No Grainger business unit will reserve or commit stock until a valid Purchase Order is received and a valid Sales Order is confirmed. Prices quoted are specific to the Account Number provided and are current as of the end of the preceding calendar month. Availability is current as of the last hour.
 
 
 Once the buyer has selected the items and checked on pricing and availability, they will checkout from the Grainger web site. The contents of the Grainger shopping cart will be posted to the network URL provided with the callout request. If the buyer could not find what they needed, they will have the option to transfer their request to the FINDMRO.com web site. An HTML form will be presented and posted to the FINDMRO.com web site. Requests handed over to FINDMRO.com will be handled outside the scope of this architecture.
 
 
 The online buyer has the option to submit the Purchase Order from the desktop. When doing this they will submit the order to their buy-side system where workflow rules will govern the transaction. If so configured, the buy-side system may post the order to the network URL. Grainger will access the network on a timed basis and pull any pending orders. Grainger will acknowledge receipt of the pulled orders by posting an Order Acknowledgement transaction using HTML with XML format. Once an order has been confirmed, Grainger will post the Sales Order to the networks URL. Buy-side systems can then pull valid Sales Orders into the buy-side application to update workflow status.
 
 
 When checking order status, the buyer may look up the status directly on the Grainger web site (Release 1). Depending on the setup rules on the buy-side system, Grainger could also deliver status in the form of a transaction posted to the network URL provided by the buy-side system (Release 2). Also, either in addition to the transaction or as a form of response, Grainger could send an E-Mail to the buyer's E-Mail address. In Release 1 of Grainger Connectsm, transactional status is not supported from orders placed with FINDMRO.com.
 
 
 The following transaction types are supported using XML in Release 1 of Grainger Connectsm:
 
  •  Callout Setup Request (buy-side specification)
  •  Callout Setup Response (buy-side specification)
  •  Callout to Grainger URL
  •  Checkout to URL
  •  Pull Purchase Order from URL
  •  Post Acknowledge Purchase Order Receipt to URL
  •  Post Sales Order Confirmation to URL
  •  Post Purchase Order Status to Network URL
 

Summary

 In summation, Grainger has commited to the support of XML as a strategic communicaitons protocol for business-to-business e-commerce. While maintaining support for customers using EDI and voice, Grainger intends to provide its customer base with a variety of tools to execute transactions. The following figure helps show that Grainger has invested in state-of-the-art technology with vendors such as WebMethods, On Display, SAP and Oracle. These investments will provide a high return in the way of better customer satisfaction and lower operating costs within Grainger.
 
 
 
 
 
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