Global Fastener News

2011 FIN – Wishnew, Mallo & Vodicka: How to Buy Fasteners

February 25
00:00 2015

 

July 18, 1992 FIN – Product knowledge and knowing the end use of a fastener are keys to successful purchasing, “How to Buy Fasteners” panelists advised buyers for distributors.
“First, know what you are buying,” XL Screw Corporation vice president Wayne Wishnew advised.
“Know how your customer is going to use it,” Rotor Clip Company vice president Sara Mallo counseled.
“Ask questions,” AllStar Fasteners Inc. sales manager Bill Vodicka urged.
The three veteran fastener sales people with a combined total of 79 years of fastener experience offered tips to fastener buyers during a workshop sponsored by GlobalFastenerNews.com during Fastener Tech 2011.
Even in an age of online ordering, “never be afraid to pick up the phone and ask questions,” importer Wishnew advised.
Don’t just ask questions of your vendors – also talk to your customers, manufacturer Vodicka added.  One buyer discovered an order of one-inch screws were penetrating out the back of the actual application.  By finding that out before the next order, AllStar then produced 15/16s-inch screws. “Problem solved,” Vodicka declared.
“What is your customer going to do with the product?” manufacturer Mallo asked.  “It is essential that you know how they are using the product since even packaging and finishes are crucial.
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Getting the order right the first time eliminates the cost to all sides of handling returns.
 Communicating with your suppliers can reduce costs. For example, instead of just placing an immediate order, by talking with a vendor about future needs, costs can be lowered and supply steadier, Wishnew finds.
If your vendor knows your anticipated annual needs, a stock & release program can be created.  The anticipated demand for the coming year can be front-loaded to avoid usage spike problems, lock in prices and allow you to pull from inventory anytime, Wishnew explained.
A stock & release program can provide savings, lower freight costs and reduce inventory turn costs.  A “drop ship to end user” program can be set up.
• Letting vendors know anticipated usage is especially important now as all stages in the supply chain have lower inventories. “Everyone is out of stock,” Vodicka said of the entire supply chain from steel to packaging.
• Make certain both your requests for quotes and orders are accurate. “Verify plating, salt spray requirements, RoHS, steel grade, specialty materials and certifications,” Mallo advised
For example, “Make sure if it is plain or plated,” Wishnew pointed out. “Rejections are expensive.”
• Learn what quantities can reduce costs. Reaching certain box or package quantities result in the best price and availability, Mallo pointed out. “Developing a good working relationship by understanding our products, how it is handled, packaged and shipped are points of discussion,” Mallo explained.
• Mallo said fastener buyers should provide prints for non-standard parts.
Wishnew added that prints must be “detailed and legible.”
When your sales person calls asking details it is because “we want to get it right,” Wishnew said. “You should welcome a vendor calling back.”
• In choosing an importer, ask what the company’s U.S. Customs rating is, Wishnew advised. Importers with high ratings avoid audit delays.  Shipments can be delayed 10 days if an importer has made a mistake in classifying a screw for a bolt” as duties on screws are higher than bolts.
Steamship lines periodically have cut the number of vessels. Importers with confirmed space on steamship lines are protected during those periods, Wishnew noted. This is especially important with the current longer lead times ranging from 90 to 150 days.
• Make use of Internet advantages. Beyond detailed product information, pricing, stock and ordering, websites can offer training such as Rotor Clip University, Mallo noted. Online ordering has a lower margin of error.
• While e-mails can be time savers, create “paper trails” and provide quick information exchanges, the downside is the loss of human contact, Mallo observed.
E-mails can be used to create a “wall” to hide behind.
”Too many buyers won’t make a call,” Wishnew said. Instead they email insults or one-sided comments.
“Pick up the phone,” Vodicka echoed.  “E-mail swearing doesn’t help solve problems. “We’re all going home tonight.”
“Treat me the way you want to be treated,” Mallo said of e-mail complaints.
”I cannot overstate the importance of communication in making a business relationship work,” Mallo observed. “Things go wrong in life and when they go wrong between the customer and vendor, the smartest thing you can do is deal with the problem calmly and factually, in order to avoid ruining the relationship.”
• Don’t ask for the impossible.  A four-hour heat treating process cannot be done in two hours because you need the fasteners now, Vodicka said.
• Buyers should have a contact person to work with on an ongoing basis, Mallo said. “This insures that if you run into any problems there is a central person you can turn to for assistance.”
• Work with vendors to cut costs.  For example, grouping of like items in one order can reduce manufacturing costs, Vodicka explained.
Even by ordering months in advance, your order could be combined with an order by another buyer to lower production costs.
• Ask for everything you need in advance. If the end user will require certs, make sure your supplier knows when the order is placed, Vodicka advised. “The actual cost of a cert at time of ordering may be $3. Going back to create a cert may cost $40,” he explained. PPAPs ordered late can cost $250.
• Even if a website doesn’t list a part, ask about availability. “We are always looking to extend our product line” when customers show interest, Wishnew said.  ©2011/2015 Fastener Industry News.
For information on permission to reuse or reprint this article please e-mail: FIN@GlobalFastenerNews.com

2011 FIN: Linebarger, Unferth, Conte, Sullivan & Cohn
In addition to introducing panelists, FIN has collected How to Buy Fasteners suggestions from several industry veterans. Here is a summary of their advice:
2011 NEFDA – It is a different world today. FIN recently interviewed Bill Linebarger who retired after 57 years of selling fasteners for a half dozen companies – the last 15 with Advance Components.
Linebarger said one of his reasons for retiring is the change from personal sales to electronic transactions. “I like the personal contact. It seems like people hide behind voicemail and email. That’s not me.”
Linebarger’s top suggestion for fastener buyers is to answer phone calls and emails.
Bill Unferth of Lindstrom Metric this year marks 50 years of selling fasteners.  Unferth offered questions that he as a salesperson asks buyers:
1. Do you know what it costs to get price and deliver?
2.  Do you know what it costs to issue a purchase order?
3.  Do you know what it costs to receive an order?
4.  Do you know what it costs to pay an invoice?
Unferth then said, “If you know the answer to the above four questions, you will understand time is money.
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Unferth’s advice to buyers is that their goals should be placing the fewest purchase orders possible to buy as much as you need to reduce your cost of acquisition.
Your goals should be:
A. Cost of placing multiple purchase orders.
B. Cost of receiving multiple shipments.
C. Cost of paying multiple invoices
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Unferth said his most important advice is that “spreading you orders around to too many suppliers at best makes you mediocre customer to all vendors meaning you are not real important to any vendor, you are just someone who calls or faxes a RFQ, sometimes buys, sometime does not buy, or maybe buys 2 items on a 20 item total quote of $150.00 which means you are not real high on the vendors radar screen. 
”It is much better to be a great customer to one vendor and a good hoping to reach great customer status with a second vendor, as this will in most cases give you an edge over the customer who is just mediocre,” Unferth advises.

John Conte of Fall River Manufacturing notes that he finds a domestic manufacturer may quote 100,000 pieces of an item while foreign manufacturers get to quote two million pieces.
“They should have us quote the large quantities as well to see if the price difference can be minimized and offset with lower inventory, better cash flow and higher service levels.”
Conte, who started in the fastener industry in 1974, recalls when distributors would purchase their customers usage in bulk at the most cost effective level. They would then distribute over the course of the year.
“Now, we find that many of them would rather broker product to their customers and put the distribution burden on suppliers – specifically manufacturers.”
Conte finds Fall River and other manufacturers’ business “has evolved to becoming a manufacturer with distribution capabilities. It is not all bad but this service comes at a cost.”
”Be a true fastener distributor,” Conte advised.
• Conte also brings up “cost average.”
“We understand why distributors source items overseas … mainly to get the cheapest possible cost necessary to be competitive. We get that,” Conte commented. “Often times, we are faced with fire-drill orders because the boat was late and we have to bail them out which is also fine.  Again, they end up paying a premium for the fast delivery and all the money they saved on buying overseas is out the window.”
“Wouldn’t it make sense to cost average by buying a portion domestically as well as overseas…. even if it is only 10% or 20% of the total quantity it helps us and them both.”
• There are other issues that may not be at the top of the buyers’ list, but can save money. Conte points out that grouping like diameters and head styles can save money. 
”One of our goals is to schedule items efficiently in order to minimize change-overs and maximize production,” Conte explained.  “If the fastener buyer inquires with gangs of items, we can combine them and often times quote a higher volume price by looking at the total package and not just individual items.  We help each other in the process.”

Manufacturer Jim Sullivan of Chicago Hardware emphasized that there is a difference between “price” and “cost.”
“Understand that price isn’t everything,” Sullivan advised. “Are they considering all the value a supplier brings to their company – i.e. is there a solid relationship between buyer and seller that creates good, honest communication.”
Are there products a supplier has available that allows the buyer to consolidate different lines – the “one stop shop” – that cuts costs.
Sullivan, a domestic manufacturer, finds the biggest factor is imports vs. domestic.  “What is it costing you to buy a ‘cheap’ import vs. a domestic? he asks.
Is there any relationship with an overseas supplier who can work with you as well as a ‘local’ source?
Is the product a true ‘apples to apples’ item?
If there is a problem, how quickly, efficiently and hassle free will it be working with overseas vs. domestic suppliers?
Sullivan finds price is relatively down the list of objections buyers bring up when they do not place an order with one supplier vs. another.
• “We’ve been going through one of the worst economic downturns in history, and we are still not out of it yet. It’s time we, as a country, come together and work with each other first, look at the full ramifications of how we do business.  You buy cheap, you sell cheap, and you get cheap.”

We also have advice from one distributor … Andy Cohn of Duncan Bolt: “For our company were not interested in the lowest price every time- we are first and foremost interested in suppliers who we can count on. We make unreasonable demands – we need people who will make those things happen for us! Price is second!”   ©2011/2015 Fastener Industry News.
For information on permission to reuse or reprint this article please e-mail: FIN@GlobalFastenerNews.com

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