A towering success
Service and innovation characterize Tower Fasteners, this year's Excellence in Distribution award winner in the $10 to $50 million category
By Victoria Fraza -- Industrial Distribution, 12/1/1999
It isn't easy to meet the demands of a changing industrial marketplace, but leaders at Tower Fasteners believe their company is up to the challenge.Tower Fasteners is headquartered in Holtsville, N.Y., with five other locations from Connecticut to Florida. The firm sells fasteners and electronic hardware to a wide range of OEM customers -- the telecommunications, medical, aerospace, and metal fabricating industries are some. The firm's business philosophy is simple, says vice president Mark Shannon: "To reduce the cost of doing business [for] our customers."
To that end, Tower Fasteners combines cutting edge technology with innovative services to help customers streamline their operations. Chief among those capabilities is its Tower T.I.M.E. program, an inventory management service that Mark and his brother, CEO Bryan Shannon, say is responsible for much of the firm's recent growth. "T.I.M.E." stands for Total Inventory Management Electronically, and given today's service-based economy, the Shannon brothers say the program is Tower's main route to future expansion.
Tower Fasteners' proactive stance has won the firm accolades from customers and suppliers. It's also one of the key reasons the firm has been named this year's Excellence in Distribution award winner in the $10 to $50 million category. On track to do $36 million this year, Tower Fasteners' goal is to grow 10 percent a year for the next five years, expanding coverage along the East Coast.
A tradition of excellence
Hard work and dedication are often said to be the cornerstones of any industrial distributorship. Tower Fasteners is a prime example of that long-held notion.
Thomas J. Shannon, Mark and Bryan's father, founded the company on Long Island in 1967. Before he died two years ago, the 64-year-old routinely started his workday at 5 a.m., and as CEO continued to make sales calls on a regular basis.
Shannon's death came at the height of Tower Fasteners' growth, but his commitment to hard work lives on at the company. In the early 90s, Tower's sales hovered around $8 million, rising to $33 million last year. Mark and Bryan attribute the growth to the addition of new products, new customers and its inventory management program. None of it would have been possible, they say, without the rock-solid base their father established -- a base that consists of top-notch customer service and a forward-thinking attitude.
"My father had a very strong reputation in the industry," says Bryan. "I think people find comfort in knowing that his level of customer service is not only being continued, but being enhanced."
That enhancement is due to the addition of services like Tower T.I.M.E., which was launched seven years ago. The program reinforces Tower's reputation as a customer service-oriented company and capitalizes on a growing need among customers. It also represents another progression in Tower's 32-year history. "It's funny," notes Mark. "Ten years ago we were selling nuts and bolts, five years ago we were selling quality, now we're selling services. What we're going to be selling in five years, I don't know."
Mark hits on a major change that has taken place in the industry. With customers demanding more and more from distributors, selling "services" has become a key concept from coast to coast. Inventory management programs -- often referred to as "bin stocking" or "bread man" programs -- lead the pack among services, allowing customers to save time and money once spent keeping track of their own parts and tools. Inventory management programs involve the distributor replenishing inventory on a regular basis, often delivering it directly to the plant floor. Mark and his colleagues hope the Tower T.I.M.E. program will continue to give the firm a leg up on the competition.
"It's a service we have to offer," Mark explains. "It's the way the industry is going. If we don't do it, a competitor will."
Tower T.I.M.E. works like this: after meeting with a customer to establish the products to be covered and their usage levels, Tower comes up with a minimum on-hand level -- the quantity of product required to last for a predetermined time. That time could be anywhere from a few days to two weeks, depending on the customer's proximity to a Tower warehouse and their own storage capabilities. Once those criteria are established, a service rep replenishes the customer's bins, checking on-hand levels with a hand-held computer. That information is then transferred back to a Tower Fasteners branch where a new order is generated in the customer service department. The program has worked well for lighting fixture manufacturer Stonco, says buyer/planner Muriel Tice.
"They're excellent at this," Tice says of Tower Fasteners. "They're on time, and if there is a problem -- even if they foresee a problem -- they let you know."
Tower has about 100 inventory management programs in place up and down the East Coast. Tower T.I.M.E. is the firm's primary focus today, says Mark, who sees it representing the largest part of the business in the next five to 10 years. The goal now is to sell the service to more and more customers. Like other distributors, Tower Fasteners doesn't charge specifically for the services involved in Tower T.I.M.E. Mark says they've made the program work by streamlining internal operations so Tower Fasteners runs more efficiently, and by buying smart and pricing right.
The net result is that customers are pleased. "The bottom line is, I haven't yet found -- and I'm not even considering looking at this point -- someone to do second best," says Tice. "This is a situation where we share information with Tower ... I can't see not utilizing them for this service."
On the cutting edge
Tower Fasteners has streamlined its operations primarily through technology. Bar coding, hand-held computers, e-mail capabilities and Internet access have all helped, as have simpler things like two-way radios and cell phones used in delivery trucks. The most recent addition to the list is a document scanning program that allows employees to store key documents -- such as quality certifications -- on the company's computer network. This eliminates the need to mail or fax documents between branches and cuts down on physical storage space and excess paper.
Being on the cutting edge of technology isn't something new for Tower Fasteners. A forward-thinking, innovative attitude is something Mark and Bryan say their father instilled in the company from the beginning. The firm's mission, they say, is to get to know their customers, understand their needs and goals, and then work with them to achieve those goals. In many cases, that means anticipating customers' needs, and then going to them with solutions that will help them better run their businesses. The Tower T.I.M.E. program is one example, as is Tower's Web site, which allows rudimentary online ordering. Customers can e-mail an order which is then downloaded and re-entered into the main system. The order is then confirmed back to the customer. Tower Fasteners is in the midst of linking the Web page to its computer network for "true" e-commerce, in which orders entered via the Web would go directly into the main system.
"We feel that in the future, that is going to be required," says Mark. "Plus, with the world becoming globalized, I'm doing business in places I didn't expect to do business years ago -- Europe is one. And by allowing customers there to enter orders online, it reduces the time difference -- and it's convenient and streamlines things, as well."
Muriel Tice at Stonco has a less technical example of Tower's ability to anticipate customers' needs. As a designer of high intensity discharge lighting fixtures, Stonco requires the latest information on products and design issues. She says Tower regularly calls to set up meetings between its manufacturers and Stonco's design engineers to introduce new products and discuss other issues important to Stonco's projects. She says the updates go a long way toward helping Stonco produce the best possible products. "It's a big plus," Tice notes. "My design engineers love it."
Suppliers love that kind of forward-thinking attitude as well. Bob Dougherty, director of global distributor sales at fastener manufacturer Southco, Inc., says Tower has been a key distributor for his company since it began selling through distribution seven years ago. A combination of good services, an excellent computer system and knowledgeable people are among the most important things Tower brings to the table, Dougherty says. On top of all that, he adds, "they're just nice folks."
Others agree. Richard Knapp, a buyer at Kendro Laboratory Products in Newtown, Conn., has been a Tower customer for close to 20 years. When asked why he continues to work with the distributor, Knapp says it's because Tower Fasteners is a small, family-owned business that offers the "personal touch." When reminded that Tower Fasteners has grown considerably in recent years, Knapp agrees but says the growth hasn't affected the personal relationships the company strives to form with its customers. "You're not just a number to them," he explains. "They're still a family-oriented company."
And they plan to stay that way. In a world where the size of the competition keeps getting bigger, Tower Fasteners is less concerned about being the biggest than being the best. Bryan Shannon says Tower's growth will come internally, not through acquisition, and points out that excellent customer service remains the firm's top priority. His brother echoes those sentiments.
"I don't believe that the bigger you are, the better you are," says Mark. "We've never had ambitions to the be the biggest. But we want to grow and provide our customers with the level of services and products that exceed their expectations. We want to be the best we can be."
Mark and Bryan are quick to point out that they can't do that alone. Tower Fasteners' success, they say, is due to the hard work of many individuals.
"Tower has outgrown the Shannon family," says Mark. "Without the hard work and dedication of our employees, we would not be where we are today."
COMPANY SNAPSHOT
Tower Fasteners Co., Inc.
Headquarters: Holtsville, N.Y.
CEO: Bryan Shannon
President: Joseph Leva
Vice President: Mark Shannon
Founded: 19671998 Sales: $33 million
Employees: 130
Locations: 6
Web Site: www.towerfast.com
ISO 9002 Certification: 1997
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