Erik Gershwind spent 30 years at MSC Industrial, the last 15 at the helm as President and CEO. During his tenure, he led MSC's transformation from what he calls a "spot-buy supplier" into a mission-critical solutions partner embedded in the operations of North American manufacturers.
In his appearance on the In the Mind of a Distributor podcast, Erik walked through how that shift happened, what it took to make solutions stick, and where the next wave of opportunity sits for distributors today.
Below are six lessons any distributor can take from the conversation about offering solutions to customers.
Lesson 1: The best solutions ideas come from listening hard to customer pain
For MSC, the catalyst was the global financial crisis. Many of MSC's manufacturing customers had a very challenging experience, and the awakening that followed reshaped what they wanted from their distributors.
"It's not just about piece price," Erik said of the shift in customer thinking. "This game winning at manufacturing is about throughput, being really efficient and being really fast to market to be able to get products into customers' hands faster."
That drumbeat (customers asking for help running their businesses better, freeing up cash from inventory, getting more nimble) opened a window for MSC. They didn't invent the demand for solutions. They listened closely enough to hear it and then moved to fill the gap.
If your customers are talking about labor shortages, throughput, working capital, or speed-to-market, those conversations are the leading edge of your solutions opportunity. The distributors who hear them first get to define the category.
Lesson 2: Look inside your business for solution-worthy assets before you look outside
Before MSC built anything new, they took stock of what they already had. The answer was a deep heritage in metalworking supplies, cutting tools, abrasives, and finishing supplies, along with the technical expertise around them.
That mattered because those product lines aren't peripheral to a manufacturing customer. They are mission-critical to the production process. If you influence them well, you influence the customer's output.
Erik described the resulting repositioning this way: "Repositioning MSC from what was a spot-buy supplier to a mission-critical partner on the plant floor of North American manufacturing."
Most distributors already have technical expertise, product depth, or category dominance somewhere in their business. That existing strength is usually a better starting point for solutions than a net-new offering nobody on your team knows how to deliver.
Lesson 3: The best solutions live inside your customer's operations
MSC's onsite program (the implant program) places MSC associates full-time inside customer locations. Pre-COVID, it accounted for roughly 1% of sales. Today it's 20% of sales and still climbing.
The reason it took off is straightforward. Most of MSC's customers struggle to find qualified, trained labor for manufacturing roles. An MSC implant handles procurement, put-away, light manufacturing services, kitting, and value-add work that the customer would otherwise have to staff themselves.
For distributors thinking about how to extend their reach, the lesson is that your physical footprint inside the customer matters as much as what you ship to them. The companies that move closest to where the work actually happens build the deepest relationships and the highest switching costs.
Lesson 4: Don't ask your outside reps to deliver onsite solutions
This was one of the clearest distinctions Erik drew. An outside salesperson is compensated to grow revenue across many accounts. They move from account to account by design. A solutions role is fundamentally different work.
"What the customer needs is different from somebody that's just adding on new products," Erik said. The right person "becomes an extension of the customer. They are really part of the fabric of the customer's team and operation."
That distinction has implications for hiring, training, and management. Onsite associates work more independently than branch employees. They don't have a manager three feet away to escalate to, which means they need stronger judgment and more autonomy from day one.
Erik described the talent shift this way. Solutions delivery requires "somebody that's gotta be more autonomous and has to be able to make decisions independently." The fix MSC landed on was a mix of clearer training, explicit cultural permission to make mistakes and learn from them, and leadership that backed both.
Lesson 5: Your data is a solution customers can't get anywhere else
The other layer of MSC's solutions strategy is data. Vending machines and VMI systems aren't just inventory tools at MSC. They capture usage patterns by job, by location, and by person.
That data flows back to the customer as insight. If one team is using two or three times as many cutting tools as another team doing similar work, that's a training opportunity worth surfacing. Cross-job patterns become procurement optimization. Usage data becomes spend visibility.
Erik put the broader point this way: "Today, data is really at the heart of what a distributor does. And by data, I'm referring to the intersection to me between product, supplier, and customer. There's no other entity like a distributor that has access to the intersection of all those three."
For distributors building solutions, the implication is that you are already sitting on something most software vendors and consultants can't access. The hard part is packaging it into something a customer can actually act on.
Lesson 6: Technology earns its place by doing things you couldn't otherwise do
Erik repeated a phrase that anchors how MSC thinks about every technology investment. "Don't fall in love with the technology. Technology is in service of delighting customers and doing things that we otherwise couldn't do."
The digital marketing shift at MSC is a good illustration. The old print catalog cycle ran on six-week lead times. By the time MSC could measure what worked, they were two or three brochures past it. Digital marketing let MSC curate product merchandising daily, see results hourly, and adjust within 24 hours.
The same principle now applies to AI. Erik sees AI use cases across the entire distributor value chain, from buying decisions to warehousing to customer service. "There's virtually not a spot in the value chain where there should not be some application for AI technology," he said.
The distributors who win this next wave will be the ones who pick AI use cases that solve real customer problems first and treat the technology as the means rather than the end.
One thing Erik is still trying to figure out
When Benj asked Erik at the end of the episode what he was still curious about, the answer came quickly. The distribution market is $200 billion plus, and the top 50 distributors only hold about 35% of share. Why hasn't it consolidated yet?
"There have been catalysts or inflection points... that were gonna be the thing that was going to accelerate consolidation," Erik said. The internet was supposed to be it. Indirect procurement tools were supposed to be it. Inventory management was supposed to be it. COVID was supposed to be it. None of them have moved the needle.
Erik sees AI as another candidate for that role, calling it "another one of those things certainly that has the potential to be such a step function change in what a distributor looks like." Whether AI is finally the catalyst that compresses the industry or just another wave that highlights the strongest operators, the question matters for every distributor thinking about where to invest next.
FAQ
What does it mean for a distributor to offer solutions to customers?
Offering solutions means going beyond moving product through a transaction and instead helping customers solve operational problems. For MSC, that has taken the form of onsite implant programs, vending and VMI services, technical expertise on the plant floor, and data-driven insights that improve customer throughput and reduce waste.
Why should distributors invest in onsite or implant programs for customers?
Onsite programs address one of the biggest pain points for many B2B customers, which is access to qualified labor. They also embed the distributor inside the customer's operation, which deepens the relationship and raises switching costs. MSC's implant program grew from roughly 1% of sales pre-COVID to 20% of sales today.
How can distributors use their data to create solutions for customers?
Distributors sit at the intersection of product, supplier, and customer data, which gives them visibility no software vendor or consultant can match. That data can power usage insights, training recommendations, cross-job optimization, and procurement visibility. The opportunity is packaging existing data into something customers can act on.
Where should distributors start when adding solutions for their customers?
Start with the pain customers are already talking about and look inside the business for assets that map to that pain. MSC built its solutions strategy on top of existing strengths in metalworking, cutting tools, and technical expertise rather than chasing a new offering from scratch. The strongest solutions usually build on the technical depth a distributor already has.
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