The past decade has witnessed unprecedented advances in manufacturing systems and processes, but the North American fastener industry actually regressed during this period. Our industry's heritage – original thinking, commitment to research and development, risk taking, and innovation – were pushed aside for the self-defeating pursuit of market share through ruinous, price-driven strategies.

Few fastener suppliers are focusing on total, in-place customer costs across the full technology landscape. Patent awards tell the story. In 1992, 357 fastener patents were awarded in the U. S., and in 2002 the number was 359.

Too many suppliers and distributors have acquiesced to the blinkered demands of customers and competed through piece pricing. Rather than claiming their proper role as value creators, they eagerly charged into a free-for-all in which low bidders reap the spoils – but at extremely thin margins.

OEMs and Tier One suppliers have encouraged opportunists, awarding contracts based on lowest bids, while ignoring critical elements in the value chain. These transparent savings have led directly to useless fasteners on products, production inefficiency, and higher warranty costs.

This price-driven mindset neglects a simple reality: that fasteners represent only 30 percent of total in-place fastening costs. The remainder lies in product and process design, prototyping, tooling, logistics, automated assembly, and field service.

Oversight of these processes is a complex and burdensome chore for most customers, so they capitulate to the simplistic method of applying price pressures to their suppliers. By doing this, they save pennies and waste dollars.

Today, few large manufacturers possess the resources and intellectual capital to deliver total fastening solutions to customers. Even fewer have the global footprint to serve major OEMs, or the broad product portfolio to optimize solutions across a broad range of technologies. The industry has succumbed to the pressures and enticements of quick profits and short-term cost reductions based on the false allure of piece pricing.

Providing value-added solutions is not easy. For those dedicated to this proposition, it means satisfying every aspect of fastening and assembly technology, from concept through installation. It also requires involvement in application development, plant efficiency, production engineering, and assembly system integration.

Ultimately, it means providing comprehensive solutions to assembly problems, with the fastener serving as the byproduct of an entire spectrum of services and specialized knowledge. In the ideal world, design, process and logistics coalesce in the concept, production and delivery of goods and services.

Innovation is the key component for value-added providers, whose constant focus is on developing proprietary products. This requires closeness to customers, and tremendous investments in research, development, technical and management talent, and plant modernization.

Price as a differentiator is a recipe for financial ruin. Addressing customer in-place costs with value-added solutions yields far greater savings and long-term value than any piece price strategy.