Global Fastener News

1997 FIN – NFDA is Told Now is the Time for Electronic Commerce

July 22
00:00 2011


May 6, 1997 FIN – With a display of drums, candles for smoke signals, a dial telephone and a laptop computer, Barry Porteous and Joel Roseman demonstrated to the National Fastener Distributors Association how commercial communication has changed and urged the fastener industry to advance into electronic commerce with suppliers.
Electronic commerce is key to reducing inventories while still having the stock customers need when they need it, Porteous told the NFDA spring meeting in Scottsdale, Arizona.

“You aren’t going to sell every single item every day,” Porteous, the NFDA associate vice chairman said. But when customers provide daily or weekly information on sales or needs to distributors and the information goes on to manufacture via electronic commerce, all levels can prepare to supply what is needed.
Without electronic commerce “we really don’t know what we are going to sell and that causes us to carry inventory we don’t need to,” outgoing NFDA associate chairman Roseman said.Citing the example of book publishers and distributors who know when to order, print and distribute books and instantly spot trends for title catching consumer interest or winding down, Porteous said fastener industry “survivors will be those who add legitimate value to being in the chain.”

Roseman, president of Bell Fasteners, pointed to the growth of Wal-Mart and its sales per square foot because of technology, which provides for automatically replenishing stock in every store within 48 hours.

“We’re being led into the modern age of instead of leading,” Roseman said of the fastener industry’s relatively few leaders in electronic commerce.

Porteous said “absolutely flawless communication systems are available today. Electronic commerce has virtually eliminated pulling errors” at Porteous Fastener Companyand thus two-thirds of costly credits are no longer necessary.
“Just the cost of the freight of shipping and returning wrong orders can be expensive,” Porteous pointed out. “And the time involved is extremely costly.”

Sharing information via electronic commerce creates a new relationship, Roseman pointed out. “At the root of it all is trust,” Roseman said. Bell Fasteners, which manufactures stainless steel fasteners, has reduced four-day cycles to one day through electronic commerce.
“Distributors are providing information on how to do a better job together,” Roseman said.

Fatica & Simonsen: Very Difficult to Pull the Wrong Part
“It is very difficult to pull the wrong part,” Jeff Fatica of AXS Solutions/Champion Bolt said of the results of a software system designed in- house.

Barcode gun scanners provide electronic checks throughout the distribution system. The computers can warn that the average piece weight on the picklist doesn’t coincide with the proper weight for the order, Fatica said. There is even a “mechanism for finding bottlenecks.”

Though the evolving system required considerable training time initially, it is paying off today. There is virtually no paperwork or keying in which are ripe for mistakes.

David Simonsen of AXS said the distributor is paid by General Electric via electronic funds transfer in 12 days without anyone “touching even one piece of paper.”

Fatica said the only paper left is picklist and “we’re working on that.”
The software actually allows AXS to catch customer errors. “Our job id to go out and help teach them,” Fatica said.

The system has changed the nature of jobs. “We push a lot more responsibility back to our people,” Fatica said. AXS has experienced a “growth of personnel” and found the benefit of “people working together.”

Today AXS sales average $450,000 per employee and the goal is $750,000, Fatica said.

Simonsen estimated AXS has spent $350,000 on system hardware.

Start by Surfing the Net
With comments such as “The only thing that keeps you from doing that is you,” and “At some point you have to get on the bus or you will never go anywhere,” Steven Epner of BSW Consulting urged the industry to experiment with the Internet, get a company domain name, use E-mail and “watch your competitors.”

Epner titled his NFDA presentation “Don’t End Up as Road Kill on the Information Highway” and pointed out that 12 million are on the Internet.

“On the Internet you can give full motion and full color tours of your manufacturing plant or warehouse 24 hours a day,” Epner said. “The Internet is limited only by your imagination.”

“However, make sure you do it right,” he advised. Home pages must be “clean, fast, printable, changing and accurate.”

“We live in an MTV world. Your home page must change no less than once a month.” The Wall Street Journal home page is updated eight times a day.

You need to learn the rules of the Internet-such as junk mail can boomerang deluging you “nastygrams” and worse.
“The Internet is not an island. It has to be part of a whole big story,” Epner said. “No matter how much technology you throw at a situation, if you do not solve real business problems you cannot win.”

Employers reluctant to get on the Internet will soon find they have to in order to hire new employees. “You’d better provide them with the tools they are accustomed to.” Epner explained.
Manufacturers Are Changing
NFDA associate chairman Dick Payne of Safety Socket Screw Corporation said the old eight-week backorders will change, with electronic commerce providing point of sale information every day so you can “see what trends are developing and start to plan.”

‘I’d love to be down to a one-week cycle,” manufacturer Payne said. “Soon it is going to be that have to be down to that.”

Safety Socket recently announced an arrangement with Kanebridge Corporationto be a logistic partner” in a system allowing distributors to reduce inventories. While distributors to reduce inventories. While distributors may continue to stock “A” and “B” fasteners, the logistic partner can keep the less frequently ordered “C” and “D” inventory. ©1997/2011 Fastener Industry News
Related Links:

• National Fastener Distributors Association

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