Partnering pays
-- Industrial Distribution, 5/1/2001
Other articles from this Fastener Report:
Manufacturers, trade groups provide more training
Profile of Hub Construction Specialties
Viewpoint: Qualify your prospects to stop wasting inside sales' time
News: Expect slow, steady growth
Rep's perspective: Achieving a comfort level
By Peter Fretty, Contributing Editor
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Consolidating fasteners to reduce costs
While going through his customer ordering patterns in mid-September of 2000, a red flag went up alerting John Hohenfeldt, vice president of sales for All Fasteners, Inc. to contact long-term customer Ruud Lighting. It was time to talk about consolidation of fasteners with the Racine, Wis. lighting fixture producer.
Hohenfeldt knew consolidating would secure better pricing for his customer as well as reduce the confusion involved when numerous fasteners are necessary to assemble a product.
Scot Siebers, an industrial engineer at Ruud and Kevin Bryant, Ruud's purchasing and materials manager, were brought in and asked to decide where changes were possible and made economical sense. “The intent was to provide cost savings by identifying what fasteners could be standardized and consolidated to simplify the entire assembly process. Taking small steps and analyzing each application provided us with the freedom to recognize opportunities,” said Bryant.
“Our initial target was to simplify all of the type “f” screws,” says Hohenfeldt. Early on in the process, Hohenfeldt, Siebers and Bryant were able to eliminate three simple part numbers to realize annual savings of approximately $7000. This brought the number of different “f” screws from 17 to 14.
The team then noticed that there was a possibility that some of the “f” screws could be replaced to not only save money but also improve performance. Knowing Taptite® screws could be the answer, Hohenfeldt arranged for representatives from Textron Fastening Systems to investigate the applications at question.
“The intent was to provide cost savings by identifying what fasteners could be standardized and consolidated to simplify the entire assembly process."
-- Kevin Bryant, Ruud Lighting
Bill Bryan, application engineer from TFS, and Dan Hanson, TFS sales representative, were brought into the Ruud facility in the fall of 2000.
After reviewing the applications together, TFS initiated performance drive testing on the two different types (“f” and Taptite®) of screws. By bringing the Taptite screws into the picture, the number of “f” fasteners has been reduced to only nine.
According to Ruud's Siebers, “Since these changes are still taking place it is too early to determine the total annual savings that might be presented. This change [implementing Taptite screws] addresses a performance issue [improved fastening consistency] so determining a cost savings will be gradual.”
Initially, this consolidation project may be taking away from All Fasteners' bottom line, but in the end it will provide it with a more secure hold on future dealings with Ruud. By working closely with Ruud on this project, Hohenfeldt has been able to improve his relationship with and open up opportunities to work with Ruud more intimately on future projects.
“By educating our customers on appropriate and potential applications of fasteners, we gain respect and credibility,” says Jim Ruetz, All Fasteners president. “Taking the time to listen to their needs and concerns and explain the options shows our interest in their operations. Customers know that we are looking out for their welfare in a proactive nature. The best solution is always win-win.”
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Ruud recognized how much was involved with trying to simplify the assembly processes, so it took a proactive approach to better prepare the growing company for future product line expansions. Ruud has created a custom database to help engineers and assembly personnel with fastener selection, especially when new products are introduced to the company offering. The system will also help All Fasteners because it will more accurately and efficiently project usage.
Jim Carrington, Ruud's engineering and product support manager, is heading up the database project. “Through the incorporation of numerous variables into the database program, Ruud should be able to monitor its usage, effectively project future needs, and keep control over the introduction of new fasteners into the assembly process,” he says. Because screw selection had always been a manual process, one person could choose the 2.125-in. screw while another could choose the 2.25-in. screw — thereby limiting consistency and making forecasting usage very difficult.
The database incorporates all ballasts used by Ruud Lighting. The stack heights of all ballasts are listed and a calculated screw length is available for all adder lengths. While creating the database, Carrington assigned an acceptable range of application to all screws. Based upon these ranges, the database selects the appropriate screw for each ballast/adder combination. Screw choices are now very simple and consistent throughout the department and across all product lines. Over time, this system is hoped to significantly improve accuracy of usage forecasts. Eventually all members of the Product Support Engineering Department will use the database.
| Consolidating to reduce costs All Fastener's Partnership Program, which officially started in January 2000, initiated a fastener consolidation opportunity that saved Ruud Lighting thousands of dollars and has been a great cost savings measure for its entire customer base. The company classifies its customers into one of three groups: platinum, gold and silver, depending on the relationship they have with the customer, the amount of potential business the customer is able to do with All Fasteners, and service levels the customer requires. The platinum level accounts receive a number of services including an assigned account manager. The account manager is responsible to work with the customer's key engineering and purchasing personnel on a number of goals including cost reduction projects, product and blueprint reviews and the quarterly progress review of the platinum report with the customer. As part of the program, All Fasteners generates a comprehensive quarterly report that outlines a performance rating along with progress on cost savings goals initiated in the previous meeting with the customer. The rating incorporates on-time delivery, quality, and the number of deliveries necessary to fill each order. By taking the time to review this information with the customer, All Fasteners has been able to enhance many of its business relationships. The Ruud Lighting project was a result of the account manager's work with the customer to reduce fastener costs by consolidating part numbers of different lengths, thus improving Ruud’s ability to purchase at higher production levels from the screw manufacturers. With a desire to boost fastener performance, Ruud showed an interest in converting some screws from one style screw to another. Although such performance attributes are more difficult to document, overall cost savings in improved screw performance and enhanced product quality are expected over time. Ruud has been a loyal customer for nearly 20 years — All Fasteners actually helped the original owners set up their first assembly lines. In 1997, Ruud abandoned its discrete order system, which laden them with costly in-house inventories, and implemented a Vendor Managed Inventory system — automatically shifting it to the platinum level. Today All Fasteners manages the vast majority of the fasteners used in their facility. |
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