Volume 5 | Issue 3 | Year 2002

What would a company look like if its entire inventory, service and distribution network evolved solely to meet customer needs? It would look exactly like Fastenal.

Customer needs are first and foremost to Fastenal. It is Fastenal’s business to identify the right combination of products and services for its customers. Customers come to Fastenal for fasteners; tools and accessories; cutting tools; hydraulics and pneumatics; materials-handling products; and electrical, welding, safety, packaging and janitorial supplies. These product lines offer more than 1.3 million SKUs of brand-name and custom industrial and construction supplies. One of Fastenal’s main objectives is to continually look for new products and services for its customers. The newest two include a prepackaged fastener division, which sells directly to retailers for consumer use; and the new product offering of metals, alloys and related materials.

Extensive product lines are only the beginning of Fastenal’s commitment to its customers. Fastenal also carries a full line of value-added services including: custom band-saw welding, hydraulic hose crimping, custom packaging, tool repair, hoist repair and inspection, tool and cutter grinding, CAD organizational layouts, an A2LA-accredited quality-assurance laboratory and sling fabrication, repair and inspection.

The cornerstone of the company’s value-added services is the Fastenal manufacturing division. Fastenal’s 104,000 square-foot manufacturing plant in Winona, Minn., is ISO 9001:2000 certified, with 36 pieces of computer-numerical-controlled equipment on the floor. Its lab is A2LA-accredited. Superior quality levels have garnered the company inclusion on the NASA Marshall Space Flight Center’s Audited Vendor list for specialty fastener manufacturing. The manufacturing division supplies critical applications from aerospace to theme parks, where reliability and liability issues loom large and quality control is of paramount importance.

“We never co-mingle elements. Everything has a single heat source, which leads to durability, reliability and the ability to trace materials back to the mill,” says Tim Borkowski, general manager of manufacturing and industrial services. Fastenal can work with high nickel-chromium alloys and titanium for highly non-corrosive applications. Other operations include cold/hot bending, drilling, hot upsetting, milling, threading and turning. Materials include alloys, carbon and stainless steel, aluminum, brass, bronze, copper, hastalloy, inconel, monel, silicon and tool steel. There is nothing that Fastenal can’t make or do for its customers.

Beyond the Nuts and Bolts
Fastenal’s unique market plan is to be close to its customers. There are 12 strategically placed distribution centers that service a 500-mile radius and hold more than $150 million in inventory to support more than 1,100 Fastenal branch locations in all 50 states, Canada, Puerto Rico, Mexico and Singapore. The company-owned fleet of more than 100 semis, 200 tractor-trailers and 3,500 local-delivery trucks, continually replenishes inventory to branch stores and customers.
Despite the depth of Fastenal’s offerings and the breadth of infrastructure, its main commodity is customer service. “We have no special twist to our product offering that is unique or secret,” says Lee Hein, regional vice president for the Ohio Valley and Carolinas. “We have, for the most part, the same types of products as almost any other distributor. It’s our people and how we go to market that makes the difference.

“We try to maximize our customers’ bottom line, and it isn’t solely by buying it from us at a cheaper price,” Hein explains. “There are countless ways to make money and save money for our customers.” The company’s simple strategy of growth through customer service has contributed to the ongoing success of this NASDAQ-listed company (symbol FAST). Fastenal was founded in 1967 with the concept of selling and distributing industrial supplies through vending machines that would dispense nuts and bolts. From this innovative beginning, Fastenal has expanded to become one of the fastest growing full-line industrial distributors and fastener distributors in North America.

Fastenal’s people complete the equation with an incredible level of knowledge not only of industrial supplies but also of its customers’ operations. Fastenal has more than 6,500 employees, with 4,300 at the branch level engaged in selling to and servicing customers. The Fastenal School of Business is a corporate training center that facilitates training of the company’s sales force. From sales to cost savings to branch management, employees are educated in all aspects of sales, service, operations and management. The 2,200 employees balancing the equation are experts in manufacturing, quality assurance, engineering, transportation, logistics, purchasing, product development, electronic commerce/EDI and many other areas.

Total Service
Fastenal’s business plan of strategic branch locations is key to servicing manufacturers, construction contractors and other businesses in any given area. By embracing the idea of just-in-time inventory, Fastenal provides total cost savings by reducing customers’ procurement costs (hard costs) and inventory management (soft costs) in both OEM and maintenance, repair and operations.

“What we do is identify not only products but processes,” Hein says about Fastenal’s customer relationships. “We work with our customers to find ways to save them money not only by addressing hard costs, but the way in which their products are being purchased and their inventory is being managed.” Fastenal evaluates internal processes to help improve customer operations through integrated supply chain management techniques including: production line support, internal processes re-engineering, reduction of freight and materials-handling costs, warehouse management systems, integrated logistics, reduced purchasing and billing cycles, and e-commerce/EDI solutions.

“There is so much money being wasted due to excess inventory and the energy companies expend to get supplies to the point of use,” Hein observes. “Fastenal’s solution is to keep the customer’s on-site inventory to a minimum. We’ll stock it for you at our local Fastenal branch and deliver it to you on an as-
needed basis.”

Point blank, “It’s the procurement process. The way we buy it, how much we stock, how and when the product is used and how we get it to the assembly line. That’s what makes a difference to our customers,” Hein says.

“I don’t believe you can find a product now that we aren’t able to source. It’s not only fasteners, but tools, ladders, hydraulics,” he adds. “Our customers want a distributor that can handle multiple lines, and that is our strength. Fastenal is committed to customer satisfaction. We develop life-long partnerships where Fastenal adds value, which comes from the fact that we are local and we are going to be around for a long time. What is a long time, you ask? Forever.”

Previous articleA New Name for Solid Quality
Next articleMaking an Entrance