Global Fastener News

October 29, 2002 FIN – “I never thought inventory would become a dirty word.”

That commentary, made by Safety Socket Screw Corp. vice president Steve Payne, came during a candid dialogue between suppliers and distributors in a panel discussion at the National Fastener Distributors Association autumn meeting in Chicago.
The supplier panel consisted of Steve Payne, vice president of marketing & sales for Safety Socket Screw Corp.; Barry Porteous of Porteous Fastener Co.; and John Grabner, president of Cardinal Fastener & Specialty Co. Distributors trying to understand manufacturing issues discussed the difficulty of opening up to suppliers and spoke of the need for guarantees to maintain integrity.
Payne acknowledged that communication is key to a good supplier-distributor relationship. Porteous expressed disappointment in the overall state of communication between the parties, saying it’s good among top businesses but lags at middle and lower levels.
Mistrust is high between the two groups. Porteous said demanding distributors want services without paying for them. He described losing orders to “penny pricing,” then being asked to test competitors’ items free of charge in his labs. Other problems abound. Payne reported that some distributors demand the part immediately, operating in a more reactionary than strategic mode.
Rebecca Branson of Threaded Rod Company Inc. said most distributors place a rush on all orders.
Considering that, an ASAP request doesn’t help her prioritize orders.
Then there’s the issue of negotiating price. Grabner said he’s had to fire customers for constantly harassing him about pricing.
When distributor Don Nowak of Falcon Metal Corp. asked whether volume is the sole criterion on receiving top customer treatment, he got a somewhat surprising answer.
Porteous said when asked for a favor, he examines payment history, not just order quantity. Consistent payment can be more valuable in his mind than volume buying.
On the trust issue, manufacturer Joe Butvin of Bollhoff Rivnut Inc. suggested a written ethics agreement to bolster goodwill.
Grabner acknowledged that while the industry is undergoing tremendous change, basic ethics still apply.
Distributors had concerns of their own. Bill Derry of Field Fastener Supply Co. asked why suppliers don’t call when they miss promise dates for orders.
Porteous responded by saying he doesn’t have systems to track delivery, in part because most of his customers do business on a “today or tomorrow” basis.
Jack Fellin of Agrati Corp. put it another way. “I don’t have time to call on customers. If I did, I’d never get anything done,” he remarked.
Distributor Roger Crosby of NYF Corp. lamented a lack of access to production schedules and the lack of investment in technology to update information delivery.
Ron Stanley of Empire Bolt & Screw Inc. suggested that manufacturers track to the delivery date the same way distributors and end-users do, then communicate any setbacks.
Payne recognized that distributors deserve a call when an order is late. But he said he’s often flooded with calls from distributors seeking confirmation weeks before the item is due.
In the end, suppliers offered this advice: Grabner urged distributors to seek a supplier they want to do business with, then maintain open communication to keep high levels of trust. Porteous advised distributors to develop more realistic expectations from suppliers. And Payne suggested setting up inventory management programs with manufacturers.
For distributors, “streamline” was the buzz word.
“We cannot take stock of every item in a manufacturer’s line,” commented Jim Ruetz of All Fasteners Inc. He also spoke of being undercut by startups with no overhead, saying someone can sell fasteners out of a trunk with little investment by simply buying from a stocking rep.
Skip Gallo of Würth Eastern Fastener Corp. spoke of the need to inform customers that providing them multiple lines doesn’t translate to greater value for them. “I think we need to be able to say no.”
Tim O’Keeffe of GL Huyett spoke of a small number of publicly held distributors that have successful governance. Gallo said most public firms are pressed for monthly and quarterly results, producing short-sighted decisions instead of the long-term approach that private companies take. ©2002/2012 Fastener Industry News
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