IMTS+ Creators Lounge 2024: Fueling the Potential of the Industry with MSC's Martina McIsaac

Thank you. Good morning.

Okay, well, I've been with MSC since the fall of 2022. But the great thing is, prior to that, I've been both a supplier and a customer of MSC, and I've always had the chance to work in industrial environments. I love the mission of MSC, which is to fuel the potential of American manufacturing. Prior to coming to MSC, I had a nice career, 15 years with Avery Dennison, who is a customer of MSC, moving around the world, moving around different functions, but having a lot of opportunities. I spent time on the plant floor and led manufacturing operations. Then I moved to be the CEO of Hilti North America, more in the construction space, but occasionally a supplier to MSC. I admire very much the values of the company. When I met Eric Gerswin, who is today our CEO, and I understood the mission that dates all the way back to his grandfather, who founded the company in 1941, they believe, the family believes, and we believe today, we are a team of 7,000 people, and we believe that our mission is to fuel the potential of industry in North America. I'm so proud to be part of that.

Sure. So, we are a team of 7,000, we have 400,000 customers in North America, we service them, we have a product line of 2.8 million SKUs. Basically, we can support an industrial customer end to end across everything that they do in their business. The heart of MSC is metalworking, that's our legacy, but we also support our customers in all of their MRO needs, their inventory management, their inventory planning, their cost optimization. We work with them on their production lines. Anything that you need to run your facility, you can get from MSC. The amazing thing about MSC people is their commitment to the customer. They will do anything to support the customer. What's been fascinating for me to watch over the last two years as I settle into the company is the company is now $4 billion in sales, growing up from a business that started selling tools out of the trunk of a car. Our founder used to sell metalworking tools out of the trunk of his car. We are taking that commitment that we have to the customer and transforming that into the curiosity and the courage that we need today to really help revolutionize our customers' operations. We're taking that same spirit and family value and really deploying it on behalf of our customers.

Okay, so let's frame the problem for everybody. We expect that by 2030 there will be 2.1 million unfilled jobs in manufacturing. This is a gap that, while we continue to try to tap previously untapped talent pools and go after different types of workers and upskill workers that we have, there's no doubt that we're going to have a gap. What does the gap mean? Right now, we think that a manufacturing customer is probably losing about 11% of earnings because of the gap. They're either paying overtime today because they don't have enough workers, or they're simply turning work away. Our goal when we work with a customer is to say, how do we help you overcome that shortage? When we first step in and start to work with a manufacturing customer, we're looking at how do we optimize what they buy, their market basket, how do we make sure they get good prices, we're looking at how do they optimize their supply chains, but most of all, we're looking at how do we make you more productive in the processes that you do every day. From the outside, you might think the best thing you could do would be lower prices, but the truth is that the bigger savings is making our customers more productive in the way that they plan their work and they perform their work. What I'm really proud of with MSC is from our very inception, we have a technical integrity where we can analyze a customer's business, and because you've got 2.8 million SKUs and many dedicated suppliers who work with us, we can make sure you get the best of what you need to be as productive as you can and do more with less. Either you're going to go faster and you're going to need fewer people, or you're going to be able to take someone less skilled and have them do the same work as a skilled person used to do.

There's a lot of different things that we work on. Let's frame the problem. Wages in manufacturing and metalworking are good. When you talk about a machinist or a CNC operator, you're talking about a $40,000 to $50,000 annual salary. It's still not enough to attract the talent that we need. MSC partners with educational institutions and programs like the ACE Program to try to bring our expertise and help to upskill workers to do more and more technically challenging jobs. The fact is, we're now fully automated in our programming. The technology that's used now, it's not just conventional metalworking, it's also additive manufacturing. The geometries of the parts that we're making and the complexity of the projects we're taking on just continue to increase. We work with a lot of industry partners to try to share our knowledge and help to upskill those people.

Well, I've had the good fortune to always work in industrial companies my whole career. I think if you think about what makes MSC great, our technical competence and our technical integrity and our curiosity and willingness to listen to our customers is what makes us successful. I don't think it's any different when you're a female in the industry. I'm very privileged at MSC to have more than half of our executive leadership team are women, so it was a very welcoming environment to land in when I moved over to join in 2022.

Sure. We have a history of being leaders in the space. If you give me a few seconds to share the history of the company, we were the very first to computerize inventory in industrial distribution. In the 60s, when we were using room-sized computers to fly to the moon, Sid Jacobson, our founder, was investing millions in a computer system, so pretty groundbreaking. Then, long before Amazon ever came to light, we had an order by eight, get it next day service promise. We've always sought to understand what customers need and what's going to make them successful. In this moment, our belief is that there's so much excellent innovation going on in the space that is badly needed on the plant floor. But if you think about us with 400,000 customers, 90% of them only have 100 employees or less, so they don't have the means and the opportunity to source out that technology and that innovation and independently assess and bring it to the plant floor. As we think about what our role is now in fueling potential in manufacturing, it's to be that connected tissue between innovation and the plant floor. We do some homegrown innovation, and we also partner with a number of universities and different research facilities across the country to continue to invest, and then to give the space to trial and give the connection to customer between research and the plant floor, that go-between connection.

I think the next will center all around how our customers use analytics and data to run their businesses. We have our own suite of tools and offerings, and we're working with others. MSC's MMAX, for example, allows you to tool to tune a machine in a fraction of the time that you used to be able to do it, with a less skilled worker doing it, because we use data and the decades of data that we have to optimize manufacturing. If you look at the extension into other parts of the customer business, how they manage their inventory, how they do their planning, how they do their programming, and just access to the insights from their own business will be the next frontier.

Our goal really is to bridge a knowledge gap. Our goal is to try to convey through different ways. We can use virtual and augmented reality for the workers that are customers to get trained, whether it's on product or on process. I think there are so many opportunities now to learn in different formats. We still have the physical presence of MSC on the floor, which has always been a big part of the recipe, to be there and support in the actual operations. But then we also now can use all these other technologies to reach more people.

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