Into the next Century
Second-generation leaders Evan Stieglitz and Tom Brodsky are preparing Century Fasteners for the next step in the company's evolution
By Victoria Fraza -- Industrial Distribution, 5/1/1999
Evan Stieglitz and Tom Brodsky say that every family company has an evolution. And their company, Century Fasteners Corp. of Elmhurst, N.Y., is no exception. Stieglitz, president, and Brodsky, executive vice president, are charting the course for Century Fasteners' next step in that evolutionary process. When the two joined Century 15 years ago, the firm had just begun the process of transitioning from an "entrepreneurial-minded" company to more of a "corporation," as Stieglitz puts it. And that is one of the toughest challenges in the life of a family-owned firm, he adds. For Century, the challenge has been driven by considerable growth -- the company went from $8.6 million in sales in 1984 to $45 million last year. The next step, say Stieglitz and Brodsky, is taking Century Fasteners into the realm of the triple-digit firms. They hope to hit $100 million in five years, all the while remaining family-owned.But the road to corporate status isn't easy, say Stieglitz and Brodsky. Making the transition from a relatively small "mom and pop" to a multi-million dollar corporation involves loosening the reins, investing in things you never thought necessary before, and widening your vision of what your company can become. The two second-generation leaders credit their predecessors with initiating the evolutionary process and say that it is now their responsibility to take Century Fasteners into the next, well, century.
Passing the torch
Stieglitz's father, George Stieglitz, and Brodsky's father-in-law, Jack Schlegel, founded Century Fasteners in Brooklyn in 1955. Originally a manufacturer and distributor of specialty screws, the firm eventually became more involved in fastener distribution, ending its manufacturing business in the mid-1980s. In 1978, the senior Stieglitz and Schlegel moved the company to its current headquarters in Elmhurst (located in Queens). The younger Stieglitz and Brodsky describe their predecessors as true entrepreneurs who built their business from the ground up, keeping a tight hold on all operations during their tenure as president and executive vice president. That tenure ended five years ago when Stieglitz and Brodsky were named president and executive vice president, respectively. Today, George Stieglitz serves as COO and Schlegel is CEO. Though the two are still involved in the company, it is the younger generation that handles the firm's day-to-day business and is directing the company's growth.
Today, Century Fasteners has 11 locations and distributes products across the country and around the world. Stieglitz has concentrated on expanding business of late to Europe and Asia. The firm has also expanded beyond just selling specialty fasteners -- its fastest-growing product lines are electro-mechanical components and electronic hardware. To do that, Century has developed partnerships with several key suppliers of those products. Along with that growth has come financial strength. Long debt-free, Century Fasteners has managed to grow sales 15 to 20 percent over the last seven years.
Though Stieglitz and Brodsky attribute Century Fasteners' success to its expansion of product lines and development of value-added services, they say what lies behind that is a major change in company philosophy. In the 1970s, says Stieglitz, Century Fasteners went through the first stage of its evolution by implementing a decentralized management structure. Schlegel and George Stieglitz gave up some responsibilities and established a layer of middle management by initiating a branch network. Century opened its first branch in Charlotte, N.C. in 1973. The change allowed the company to make the first leap from entrepreneurial firm to corporation.
The next phase of the evolution came five years ago, when the two senior partners officially put their succession plan into action. Stieglitz moved from sales manager into his spot as president, and Brodsky moved from controller to executive VP/treasurer. At that time, Century Fasteners had reached $20 million in sales and had implemented a strategic plan to reach the $50 million mark. That plan involved making heavier investments in value-added services, technology and people.
"We reached a point of critical mass and needed to add a new structure to the organization," says Stieglitz, adding that when a family company reaches a certain level, it either stays entrepreneurial or it changes. Century Fasteners opted to change.
Some of the changes included establishing positions the company had never had. Warren Henrickson was hired as corporate quality control manager in 1993, outside salesman Kryne Prol was named national sales manager in 1995, and John Ringold was recruited to serve as director of marketing in 1996. The new positions covered and expanded on responsibilities that had previously fallen to Stieglitz and Brodsky.
"We can't expect that you do everything yourself," reasons Brodsky. "The size of the business dictates that."
Complementary skills
From the beginning, Stieglitz and Brodsky brought different areas of expertise to the company, a factor they say has also helped the firm along its evolutionary path. Stieglitz grew up in the business. After graduating from George Washington University in 1984, he spent a year working in the branches and then returned to headquarters in New York. With a background in sales and marketing, he was given a desk and told to "go to work." Sales and marketing remains his area of expertise. Brodsky, who graduated from Duke University in 1973, brings a financial element to Century Fasteners. A certified public accountant, he worked for Ernst and Young before setting up his own practice in the early 1980s. He also has an MBA, and when he joined Century Fasteners in 1985 he was put to work on the sales desk to learn the business. Finding out that sales wasn't for him, Brodsky eventually began to handle Century's financial, operational and administrative functions.
"Tom and I bring a new level of expertise to the organization," says Stieglitz, pointing out that his father and Schlegel had many of the same strengths and interests, often causing their duties to overlap. While that strategy worked in the early days, he says the time has come for a more structured, corporate approach.
The changes of the last several years have not gone unnoticed. Bob Stein, manager of the Charlotte branch, has been with Century Fasteners for 34 years. As a result, he's had the opportunity to work under both the "old regime" and the "new regime," as he describes them. And it's not that either regime has a better approach than the other, it's just that times change. The old regime built a strong, profitable business, he says, and now the new regime must take it to new heights.
"I think Evan and Tom have taken a much more aggressive approach towards sales," says Stein, noting the company's inventory management programs which have enabled the firm to compete against high-volume companies and integrated suppliers. "They are constantly trying to think of ways to expand and enhance the business."
Stein also notes that the transition to the new leadership was a bit strange at first. "I was taking orders from someone who used to scribble on my order pads when I was a young salesman," notes Stein, referring to Stieglitz. "But he's done very well. He's learned to balance taking over and being a boss, at the same time not stepping on any toes."
Adding value for success
One of the major reasons Barry Jones decided to buy from Century Fasteners was the firm's flexible approach to inventory management programs. Jones is a purchasing agent for Westinghouse Airbrake Co. in Spartanburg, S.C. The plant makes brakes, couplers, air conditioners, air compressors, pneumatic devices and electronic devices for passenger transit trains. Century supplies Jones with small electronic fastening devices and other low-cost items he depends on to keep his plant running.
Jones participates in one of Century Fasteners' fastest-growing value-added programs -- its in-house warehouse program (also known as its in-house store or in-house cage program), in which a Century employee manages the inventory at the Westinghouse plant. Century owns the inventory, delivering it to the assembly line when needed. The customer pays for the products as they are used. Before Jones partnered with Century six years ago, he spoke with several different fastener distributors about similar programs.
"Most of them had canned programs that ran the way they wanted to do it," says Jones. "Century was open enough to say 'if this is the way you want to do it, that's the way we'll do it.' That's what we were looking for."
In addition to the in-house warehouse program, Century offers a bin stocking program in which a Century employee replenishes the customer's inventory on a regular basis. In that scenario, the inventory is owned by the customer. (All products are bar coded and lot traceable.) Century complements those programs with EDI, its own in-house inventory management system called Centrac, and kitting programs.
"We're doing business we never dreamed we'd do because of our value-added services," says Stieglitz.
Brodsky adds that Century began offering the in-house warehouse and bin stocking programs in the early 1990s, but decided to sharpen the focus on them about five years ago. Century currently has about 25 in-house warehouse programs.
That focus on value-added is important to suppliers like Jim Kinlin, vice president of sales for Captive Fasteners based in Oakland, N.J.
"They've really partnered with a lot of their customers to provide cost-effective services," says Kinlin, adding that Century has remained profitable despite the resources needed to run the programs. "The fact that they bring something to the table -- ability, financial strength, quality systems, and excellent sales and marketing efforts -- makes them a unique company."
Still a family affair
Though Century Fasteners is on the corporate fast track, the firm is determined to maintain the "family feel" Schlegel and George Stieglitz worked so hard to instill.
John Ringold, the director of marketing who joined the firm three years ago, says the warm, close-knit atmosphere was what first attracted him to the company. He adds that Century's low employee turnover spoke volumes about the value the firm placed on its people. The average tenure of a Century employee is 14 years -- a fact that Ringold says sends a message to potential employees that not only does the company care about people, but that there is a future at Century Fasteners.
Stieglitz and Brodsky say that future is bright.
COMPANY SNAPSHOT
Century Fasteners Corp.
President: Evan Stieglitz
Executive Vice President: Tom Brodsky
1998 Sales: $45 million
Founded: 1955
Locations: 11
Primary Products: Fasteners and related products, electro-mechanical components, electronic hardware
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