Global Fastener News

2003 FIN – NFDA Panel: Improving Customer/Supplier Relations

April 01
00:00 2015

October 28, 2003 FIN – Shrinking delivery times and increased service demands pose challenges for fastener distributors and suppliers.
Bill Derry of Field Fastener Supply Co. described the key issues affecting customer/supplier relations as quality and quantity of delivery information and on-time delivery performance to customers.
Derry led a panel discussion at the National Fastener Distributors Association autumn conference on how to improve communication between suppliers and distributors.
Derry, a former NFDA president, recalled that a panel last year concluded that trust is a key issue between suppliers and distributors. While noting that progress was being made at senior management levels, the 2002 panel found mistrust prevalent at the customer service and purchasing levels.
Every day that distributors fail to meet promise dates, trust deteriorates, communication gets more complicated, and costs increase, Derry emphasized. To improve, distributors and suppliers must “do what we say,” hold honest discussions, share ideas, and implement improvements.

• Distributor Don Nowak of Falcon Metal Corp. remarked that OEMs are the fastest-growing segment of Falcon’s business, representing 75% of revenues.
Nowak observed that there are trends toward shorter cycles – cut from 6 to 8 weeks to 2 weeks; reduced lot sizes; the need for increased flexibility in responding to unplanned business opportunities; the emergence of just-in-time delivery; continual cost-cutting efforts; and the outsourcing of non-core competencies.
To address these trends, Falcon’s inventory management program promotes open communication and information sharing, with the distributor sharing market risk with customers. Success is measured on Falcon’s ability to produce.
“There’s no forgiveness if you can’t perform. There’s nowhere to hide,” Nowak noted.
Falcon has a system to identify late parts so the customer is notified of any delays. To accomplish this, Nowak said each purchase order has a due date and an expedite date. Expedites are pulled daily, and customers are called, he explained. The inside sales department reviews all due orders.
On-time delivery requires meeting in-house dates, shipping entire quantities at once, ensuring paperwork is correct and having the shipped quantity adhere to tolerances.
How does Falcon evaluate suppliers? “Trust is key,” Nowak stated, with suppliers meeting commitments while remaining flexible, accepting responsibility, ensuring quality and honoring delivery dates.

•  Brad Wilson of Mid-State Bolt & Nut Co. Inc. noted the importance of reliable suppliers to Mid-State’s success. “We’re only as good as our supplier,” he remarked. “We are all in this together.”
Supplier performance has increased fivefold in the past five years, Wilson said, with on-time delivery of over 90% of orders. In the past suppliers only followed up when a product was late, but now communication with distributors is ongoing. Correct dates and other information greatly improve efficiency.
Response is also critical, Wilson explained. He said he almost always needs his questions answered within four to eight business hours. His preferred method of communication is e-mail or fax, with phone calls as a last resort. E-mail is strongly encouraged at Mid-State. “That’s the cleanest, neatest way to do it.”
With credibility at stake, Wilson insists on timely communication.
“You can eliminate half the communication by performance.”
If suppliers were not going to be able to meet the deadline, “did you tell us about it?” Wilson asked. “Never deep six a supplier for being late if they communicated.”

•  Jim Derry said Field Fastener Supply Co. uses agreed-upon delivery dates as an internal measure of success, with the goal of 99.9% on-time deliveries.
“The bar is getting higher,” Jim Derry finds. Wal-Mart and Kmart efficiency are increasing expectations in other industries, Derry noted.
In a business climate where the performance bar is constantly raised, Derry stressed the importance of proactive communications that include clearly defined expectations.

Suppliers: The Importance of Tracking Orders
•  Mark Quebberman of Semblex Corp. said the inside sales department has become a pivotal issue for suppliers as they learn to do more with fewer people. Semblex uses internal reports to identify delivery issues, because the inside sales staff doesn’t have time to track every order.
Semblex maintains a 98% service level, Quebberman said. Maintaining healthy stock levels for committed customers helps keep this level so high. Still, Semblex receives five to 10 “short time” orders each day, which reduces overall flexibility.

•  “Service begins with inside sales,” Bob Hill of Hill Fastener Corp. declared.
Hill Fasteners focuses on daily expediting and timely communication to maintain good business relationships.
“We’d rather perform well with customers the first time out than promise what we can’t deliver,” Hill stated.
Hill said it is difficult to make special efforts for demanding customers because “someone else is pushed to the bottom of the schedule.”

•  Bruce Hayes of Sems & Specials Inc. seeks to avoid on-time delivery problems when the order is first taken. “We always ask the question, ‘When do you need it?’”
Hayes noted that demand is constantly shrinking delivery times at Sems & Specials, a trend he calls a “good sign.”
“To me it means the fastener industry is starting to recover.” ©2003/2015 Fastener Industry News.
For information on permission to reuse or reprint this article please e-mail: FIN@GlobalFastenerNews.com

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