The best of the best
WIN NA snaps up successful, independent fastener distributors, then lets them run their own show
By Bridget McCrea, Contributing Editor -- Industrial Distribution, 3/1/2003
From its enormous plants to the gigantic recreational vehicles named "Vista," "Sightseer," and "Chieftain" that roll out of them, there's nothing small about Winnebago Industries or its buying needs, particularly when it comes to the fasteners that hold its popular RVs together.
And because Winnebago is vertically integrated, comprising about a dozen or so "factories within a factory," the company's fastener demands are that much greater. "We do our own aluminum extruding, sewing, cabinetry work and metal stamping," explains Bob Olson, vice president of operations. "There's a lot going on within our campus, and our need for fasteners varies greatly compared to the typical RV assembler."
For that reason, Winnebago needs a fastener distributor that can provide a seamless Vendor Managed Inventory program. Three years ago, it called on Würth/Adams Nut and Bolt of Maple Grove, Minn., to replace its existing vendor and hasn't looked back since. Winnebago, which has used a VMI setup to buy fasteners for about 16 years, enjoys the direct delivery, set pricing and service that such a relationship delivers.
"We don't have to worry about running out of parts, the obsolescence is less and we utilize their engineering expertise to come up with very good ways to improve our product," says Olson. "Right now, it's also helping us to reach our goal of reducing labor."
As one of seven fastener distributors that make up the Würth Industry Network of North America (WIN NA), Würth/Adams fills all of Winnebago's fastener needs, and also provides hardware such as door guides and shock handles. Olson, who was integral in choosing Würth/Adams for the key vendor position, says he was initially impressed by the distributor's genuine approach to meeting the manufacturer's needs.
"When you've been in the business as long as I have, you can tell who is trying to sell you a bill of goods and who truly wants to form a partnership and look out for your company's needs," says Olson. "I honestly got that feeling from Würth."
Olson admits to being wary of the transition at first, thinking that Würth wasn't aware of the sheer scope and size of the project it was getting into. His fears went unwarranted: "I can say it was one of the smoothest transitions that I've ever been involved in, especially when you consider the enormity of what had to be done. They've definitely delivered."
Making the gradeDeftly assembled over the last eight years into one cohesive unit, the seven fastener distributors that make up WIN NA include Würth/Adams Nut and Bolt; Würth/Action Bolt and Screw of Riviera Beach, Fla.; Würth/Eastern Fastener of New Berlin, Conn.; Würth/McAllen Bolt and Screw of McAllen, Texas; Würth/ Service Supply of Indianapolis, Ind.; Würth/ Snider Bolt and Screw, Louisville, Ken.; and Würth, Revcar Fasteners of Roanoke, Va.
At one time, all seven were successful, independent fastener distributors that each served their own niche, according to WIN NA's general manager, Mark Alexander. Today, the combined companies employ 710 people working from 50 locations. Cumulatively, they brought in $153 million in sales last year, selling fasteners and class "C" items to OEM, MRO and construction customers throughout North America.
A company with many "layers," WIN NA is a division of The Würth Group, which was founded in 1951 by Adolph Würth and taken over in 1954 by Dr. Reinhold Würth, who is still the active head of company. Built from a two-man operation, the conglomerate encompasses a group of companies employing close to 38,600 people in 81 countries. Headquartered in Kunzelsalau, Germany, Würth has seen growth almost every year since its inception and has recently changed to encompass five divisions: automotive, construction, industry, metal and wood.
In 1995, the management at Würth saw the potential for growth in the U.S. distribution market. Not wanting to start a new company, they began to aggressively pursue some of the more successful regional distributors, forming WIN NA. Now that the company has established itself as a top distributor in North America, Alexander says its management is growing without having to purchase new companies. "In most cases," he says, "a new or expanded customer will prompt the necessity to open a new location."
Unlike the typical consumption of "small fish by larger entities," WIN NA's approach revolved around buying already-successful distributors, then letting them run their own show. "Our parent company does a lot of analytical work and makes suggestions in areas where we should be concentrating," says Mark Cunningham, managing director of Würth/Snider Bolt & Screw, "but it's all done in a very positive manner."
Cunningham says choosing and implementing business strategies still falls on his shoulders – much like it did when he headed up Snider Bolt & Screw prior to the acquisition – but the financial and administrative support now comes from the parent company. "The relationships we have with customers are very local, as is the decision-making process," says Cunningham. "We're extremely autonomous, and that's the way we like it."
According to Alexander, previously the president of Adams Nut & Bolt, that's how The Würth Group likes it too. "The autonomous nature of the companies is something the parent company encouraged all along," says Alexander. "As long as the distributor is successful, then they're hands off. However, they do help the companies that need it, particularly in the last couple of years with all of the economic issues that are going on."
But just because the seven distributors were successful as individual entities didn't mean integrating them into one cohesive unit would be easy. These days, Alexander says he spends most of his time figuring out how to best run seven different firms like one well-oiled machine. To make it happen, WIN NA utilizes technology, the Internet and various purchasing committees, sales committees and other groups to partake in strategic planning and decision-making.
"Our work with vendors has been our biggest success over the last seven years," says Alexander. "We've been able to get all the lines we want, when previously it was a very fragmented process. The Würth Group is the largest buyer of fasteners in the world, so when we go to places like Asia our buying power and recognition is much better because we can piggyback on the Würth name – something these companies couldn't do as individual entities."
Smooth transitionWhen The Würth Group began acquiring a number of Porteous Fastener Co.'s customers eight years ago, the results could have been significant for the master fastener distributor. Instead, Barry Porteous, company president, says the transition was largely transparent. "The day to day business structure hasn't changed at all," says Porteous. "Each entity still operates independently, so selling to them hasn't changed a bit."
Where Porteous has seen a change is in each company's financial position – something that was boosted tremendously when The Würth Group assembled them into a division under its corporate umbrella. "I've seen a number of their competitors be less financially secure, but the WIN NA companies pay bills very quickly," says Porteous.
Mortie Chaikelson, vice president at Infasco in Quebec, also points to WIN NA's robust financial status as a benefit of doing business with the company. As the world's largest manufacturer of standard bolts, Infasco has been selling to the individual distributors since the 1970s. "They're professional, possess much knowledge and experience in their various companies and branches," says Chaikelson. "They're also actively adding sales forces and engineering resources, even during these difficult economic times, and are able to satisfy national accounts with their network of branches across the U.S."
According to Alexander, those national accounts are serviced through a division that WIN NA started just three years ago. He says WIN NA will do 15 to 20 percent of its business through the national account division, which is headed up by Bob Juliana, managing director and former president of Eastern Fastener. Juliana says the group was formed after the company's managing directors met to figure out how to present their companies in a comprehensive, seamless way in the marketplace.
"We wanted to be known as one entity that could service customers with many locations and varying needs," recalls Juliana, adding that prior to getting into national accounts, the various WIN NA companies would sometimes quote different prices on different letterhead and in different formats for the same item, depending on their location. The process confused customers, says Juliana, who suggested an integrated national accounts group that would quote, present, propose and implement the process from start to finish.
The idea took off, and has so far been "wildly successful," according to Juliana. "We've made a tremendous impact on the marketplace, and are now on the offense, instead of being on the defense against large national account sales groups," he adds. "We have big plans for the future, and are looking to saturate North America with our presence and realize double-digit growth for the company."
After orchestrating several cost-cutting measures in 2001, Alexander is also bullish on the future, and says the company is concentrating on the growth of its existing firms, rather than on acquiring more, although he doesn't rule out more purchases in the future. "The economy is still pretty weak, but we are looking to have significant growth in sales and profitability over last year," says Alexander. "As we look to the next couple of years, we'll continue to grow organically and open new locations to take care of new customers, and we may do a key acquisition to cover areas where we are not strong."
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