A joint venture with Sumitomo Corporation and W.W. Grainger (2000)

The vehicle, and the model it was built to carry

At the centre of this founding was a question: could a different way of selling take on the customers that existing MRO distribution had never managed to serve profitably? Many items, small amounts per order, and no telling when the order would come — so long as paper catalogs and sales representatives are assumed, those conditions work only on the cost side. Putting product information into electronic form and concentrating order-taking and shipping in one place so as to drive down the cost of handling a single transaction can be read as an attempt to use the same conditions from the other direction. The character of the venture shows in what was combined inside one company: Grainger’s experience of the same market in North America, and Sumitomo Corporation’s hold on the domestic flow of goods.

The vehicle, though, did not last to the end. As the business hardened into something built for the Japanese market, both the corporate name that set the two shareholders’ names side by side and the evenly balanced capital structure drifted away from what the business actually was. The renaming and listing of 2006 and the rearrangement of ownership in 2009 were each decisions that rebuilt the design laid down at the founding. Whether the founding judgement was right is hard to measure apart from those later choices about how far the vehicle could be let go. How much of its own outline a company with an origin unlike that of any other Japanese firm could acquire — that question was embedded in it from the start.