On the desk today · MSC Industrial
Every cutting tool dulls. Every factory reorders. One company keeps the cabinet full.
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The Cabinet on
Every Factory Floor
In 1941, a 23-year-old machinist named Sidney Jacobson scraped together $1,000 of his own money and borrowed $3,000 from his mother. He rented a storefront in Little Italy, Manhattan, and started selling cutting tools to the machine shops around him. He called the company Sid Tool.
Then the war came. Jacobson enlisted in the Army Air Force. He left the business to his brother — and when his brother got drafted too, his sister ran it. Jacobson came home to a company doing $36,000 a year. He picked up the phone and landed exclusive supply contracts with Grumman and Republic Aircraft — two of the biggest defense manufacturers on Long Island. The business never looked back.
I walked through a manufacturing plant last month with a friend who runs operations. On the factory floor — between the CNC lathes and the grinding stations — I noticed a tall grey cabinet with a touchscreen. It looked like an industrial vending machine. My friend tapped the screen, punched in a code, and a drawer slid open holding a row of carbide end mills. He grabbed one. The machine logged the withdrawal, updated the inventory, and queued a restock order. The label on the side said MSC.
Most people have never heard of MSC Industrial. But if you make anything in America — machine parts, medical devices, aircraft components, auto assemblies — there is a good chance MSC supplies the tools that cut the metal. It is not a manufacturer. It does not make the drill bits or the abrasives or the coolant. It is the distributor — the middleman who stocks 2.5 million products and puts them within arm's reach of every machinist in the country.
Sidney Jacobson's Sid Tool became MSC Industrial after acquiring the Manhattan Supply Company in 1970. It went public in 1995. Jacobson died in 2005 at 87. His son Mitchell became CEO and chairman. His grandson Erik ran the company after that. Today the founding family still holds roughly 21% of the equity. The new CEO, Martina McIsaac — the first outsider to lead MSC — took over in March 2026 after nine years at Hilti, the Swiss construction tool maker.
In fiscal 2025, which ended August 30, MSC reported $3.77 billion in revenue. The company employs more than 7,000 people, including a field sales force of 2,636. But here is the number that changed the business. MSC has installed approximately 30,800 vending machines on customer factory floors. Those machines sit inside the customer's building — stocked with cutting tools, safety gear, fasteners, and abrasives. When a machinist needs a tool, they walk to the machine, tap a screen, and take it. The machine reorders automatically. The truck comes. The invoice follows. It is a supply closet that bills itself.
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Those 30,800 vending machines are the moat. Once MSC bolts a cabinet to a factory floor, stocks it, and trains the machinists, the customer does not switch. The machine is wired into the purchasing system. Usage data flows to MSC's warehouse. Reorders happen without a phone call. Pulling it out means reconfiguring procurement, retraining the floor, and finding another distributor willing to install and stock the hardware. In the most recent quarter — the third quarter of fiscal 2026, ended May 31 — average daily sales through vending units grew 15%. The installed base grew 7% year over year. The machines keep multiplying.
Here is the pricing story. In that same quarter, price increases contributed 7.2 percentage points of MSC's 7.8% revenue growth. That means nearly all the growth came from charging more — not selling more units. Cutting tools are mission-critical. A $15 carbide insert sitting in a $400,000 CNC machine determines whether a factory produces parts or sits idle. Nobody switches suppliers over a price hike on a consumable that costs less than an hour of machine downtime. Customers absorbed the increases. They always do.
Martina McIsaac — the new CEO — described the dynamic on the June 2026 earnings call. The vending machines, she said, act like a coiled spring. When manufacturing activity picks up, sales per unit rise automatically. "Vending per unit up high single digits — that's the coiled spring we've been waiting for," she told analysts. MSC does not need to hire new salespeople when factories get busier. The machines are already there. They just dispense more.
The flywheel works through density. MSC starts with one vending machine at a customer site. The machinist uses it for cutting tools. Then the plant manager adds a second machine for safety supplies — gloves, goggles, respirators. Then a third for fasteners. Each machine added to the same site runs on the same truck route, the same salesperson, the same invoice. Revenue per customer rises. Delivery cost per unit drops. In fiscal 2025, the company returned $229 million to shareholders through dividends and buybacks — proof that even in a soft manufacturing year, the cash kept flowing.
WHY THIS WORKS
The machine is inside the building. 30,800 vending units sit on customer factory floors. Removing one means reconfiguring procurement and retraining the crew. Nobody volunteers.
Consumables never stop. Cutting tools dull. Abrasives wear down. Coolant runs out. The reorder is biological — tied to production volume, not discretionary spending.
Price hikes disappear into the noise. A $2 increase on a $15 insert is invisible next to the cost of the machine it sits in. MSC raised prices 7.2% in Q3 2026. Revenue grew 7.8%.
Three generations of compounding. Sidney Jacobson started with $4,000 in 1941. His son and grandson ran the company after him. The family still holds 21% of the equity — 84 years in.
Here is what most people miss: MSC Industrial's vending and in-plant programs now account for a significant and growing share of its revenue. The machines don't just dispense products — they collect data. Every tap, every withdrawal, every restock cycle tells MSC exactly what each factory uses, how often, and when to send the truck. The company that started by selling cutting tools out of a storefront in Little Italy is now running a closed-loop inventory system inside 30,800 American factories. The cabinet replaced the catalog. The data replaced the salesman.
