Headquarters: Winona, Minn. 629 Being ... · cludes hot-forged and cold-formed parts, regional distribution centers ... Another area where Fastenal excels is tool and cutter regrinding,

Fastenal Co.

Being the Bestfastenal co. says it has found success by controlling

its own destiny. by alan dorich

fastenal constantly looks at how it can stay ahead of competitors.

Midwestwww.fastenal.com / 2013 sales: Approximately $85 million / Headquarters: Winona, Minn. / Employees: 629 / Specialties: Industrial fasteners, safety products, tools and equipment

22 manufacturing-today.com JULY/AUGUST 2014

Fastenal Co. Midwest

Some companies have a tenden-cy to fall behind in their markets, but not Fastenal Co. Instead, Exec-utive Vice President of Operations Cory Jansen says, the company constantly looks at how it can stay ahead of its competitors. “We deal with a lot of competitive-ness in the marketplace,” he admits. “There’s a lot of great manufactur-ing companies, [so we regularly look at] how we can make a quality part at a competitive price.” Based in Winona, Minn., Fastenal specializes in OEM, MRO and con-struction supplies, including fas-teners, safety products, tools and equipment. Founder Bob Kierlin started the company in 1967 when he opened the first Fastenal loca-tion, adjacent to his father’s auto parts store, with $30,000 that he pooled together with four friends. By 1982, Kierlin had become too reliant on machine shops to modify standard fasteners into something special and the machine shops had a knack for missing promised delivery dates. “In order to improve custom-er service, his view was we had to have the capability to machine our own fasteners so we didn’t have oth-er machine shops controlling our destiny,” Jansen says. It was around this time that Fas-tenal spent $28,000 to $30,000 purchasing an engine lathe, vertical mill, horizontal grinder, cut off ma-chine, and a deburring machine from a 3M owned shop that was closing. Today, Fastenal has more than 2,700 stores in every U.S. state, as well as Canada, Mexico, Central and South America, Europe and Asia. Its operations also include a multi-site manufacturing division with an exhaustive capabilities list that in-cludes hot-forged and cold-formed

parts, regional distribution centers and FAST Solutions, the world’s largest industrial vending program.

Customer FocusedWith a presence in 22 countries, Fastenal serves a diverse customer base, including firms in the power generation, oil and gas, food and beverage, and equipment manufac-turing markets. “Our large footprint and local presence means that we have no shortage of opportunities,” Jansen reports. Fastenal also has a loyal customer base, and repeat business comprises 63 percent of its work. That has been achieved by providing great service “at the local level,” Jansen says. The company also works closely with clients when it provides cus-tom manufacturing, he adds. “Some know where we’re buying the mate-rials, they know the speed and fill rates...it can be a true partnership in every sense,” Jansen says.

Areas of OpportunityWhen Fastenal discovers it does not have the capacity to complete an ac-tion for its clients, “That’s our area of opportunity,” Jansen says. “We look at that and [say], ‘Where are we going and can we fill this void?’” In the past two years, Fastenal in-vested more than $7 million to bring secondary processes in-house, in-cluding equipment for heat treat-ment, coating, and fatigue and vi-bration testing. “Just having them in-house allows us to have quicker turnaround time and respond better to customer needs,” he declares. Fastenal also sharpens its em-ployees’ skills with training that keeps them up-to-date with indus-try changes, Jansen says. “We also offer tuition reimbursement pro-grams,” he adds. The employees are trained at local technical colleges in areas such as blueprint reading, precision measurement and ma-chine programming.

fastenal’s operates include a multi-site manufacturing division with exhaustive capabilities.

JULY/AUGUST 2014 manufacturing-today.com 23

Fastenal Co.Midwest

A Diverse ChainNot only does Fastenal Co. work well with customers, but suppliers, as well. “We have a lot of suppli-ers that [provide] a wide variety of materials,” Executive Vice President of Operations and President of Manufacturing Cory Jansen says. Those suppliers include Charter Steel, Earle M. Jorgensen Co. and Carpenter. Fastenal Co. also promotes diversity across its supply chain by bridging the gaps among its suppliers, vendors and strategic customers. “[This] creates relationships that provide solutions and opportunities for all parties,” the company says. “[Our] supplier diversity team is at the nexus of these business relationships, promoting supplier diversity internally while providing compliance support that connects well-qualified diversity sup-pliers with customers seeking diversity spend opportunities,” it says. Fastenal takes responsibility for helping its customers and suppliers meet their goals. “As part of our service, we can provide consumption tracking, certification compliance resources, and guid-ance and analytical data on progress towards [a customer’s] goal,” the company says. “We are interested in working with suppliers that qualify for these programs,” it states. “Fastenal expects our suppliers to perform with a high level of commitment, quality and service, and this is especially relevant when working to diversify and strengthen our business relationships.”

fastenal sharpens employees’ skills with training that keeps them up-to-date with industry changes.



Achieving QualityFastenal focuses strongly on quality, Jansen says. Not only is the company ISO 9001:2008 certified, but it has achieved the American Society of Mechanical Engineers’ Nuclear Quality Assurance-1, and earned certification from the Qualified Suppliers List for Manufacturers and the American Petroleum Institute. “We [also] have six A2LA-accredited labs,” he adds. Fastenal has practiced lean manufacturing for the last 15 years with a “cellular mentality in everything we do,” Jansen adds. “Lean’s a journey that never ends.” The company’s lean concentration helped when it ac-quired HOLO-KROME USA, a Wallingford, Conn.-based fastener manufacturer in December 2009. Thanks to Fas-tenal’s lean expertise, “We’ve been able to double their


sales with the same headcount,” Jansen reports. A significant portion of HO-LO-KROME’s production is stan-dard fasteners sold in small box quantities. In order to compete with low cost countries, HOLO-KROME has very high quality standards. “The rest of our manufacturing is migrating more to what HOLO-KRO-ME is doing,” Jansen adds. “We can compete with the overseas produc-ers if we bring something extra to the playing field and a high level of quali-ty is often that something extra.”

Fastenal PrideJansen joined Fastenal in 1992. Like many of its employees, he started

Fastenal Co.Midwest

A Worldwide ReachFastenal has manufacturing operations around the world, including locations in Edmonton, Alberta; Johor, Malaysia; Modrice, Czech Repub-lic; and Brazil. All “are primarily small machine shops that serve local needs,” Cory Jansen says. Although they have a range of capabilities, they do not compare to the company’s capa-bilities in its domestic locations, he says. For instance, its 100,000-square-foot plant in Loves Park, Ill., dedicates half its space to producing cold-headed fasteners. “The other 50,000 is dedicated to a machine shop where we have 17 turning centers that produce machine parts that service the local marketplace,” Jansen adds. The company also has a plant in Winona, Minn., that “focuses on everything from manual water jet [cutting to] precision machining,” Jansen says. Additionally, a Fastenal location in Wallingford, Conn., provides cold heading, and plants in Houston and Indianapolis specialize in stud cutting.

fastenal focuses strongly on quality and has achieved iso 9001:2008 certification. it also practices lean.


working at the company part-time in one of its distribution centers while attending college. Over the years, he managed the opening of its distribu-tion centers in California and Ohio. After serving as the regional vice president of sales for six years, he took his current roles in 2005. Jansen says he is proud of what Fastenal does for its engineering and production work-ers. “Growth creates opportunities to hire people so that they have the op-portunity to provide for themselves and their families,” he says. Additionally, “The parts we produce have quality,” he says. “[Our people] never give up their integrity to get a sale. I’m happy about [having] great people and great products, and that’s what I hang my hat on.”


fastenal has started selling products to the end-users, which represents a small percentage of its sales.


Business EvolutionAlthough some businesses feel pres-sured to lower their inventories, “We are seeing [increases] in the purchase order quantities,” Jansen says. “We are going to change up our mentality and stock more.” That not only ensures that Fas-tenal’s store locations will be able to satisfy its customers, but it will free up machine time. By producing more at once and having its stores stock more, the company will cut down on rush amounts. Fastenal Manufacturing’s recent changes also include selling directly

to the end-user, Jansen says. In the past, the company rejected this idea and opted to sell its products strict-ly through its stores. Those direct sales represent only a small percentage of its business and will not lead to Fastenal phasing out its stores. “As a business, we’ll [never] migrate away from that,” Jansen asserts. “We want our stores to be involved in that transaction [and to provide a] value-added ser-vice locally.”

Last year, Fastenal’s manufactur-ing sales grew more than 10 percent and expects to grow 15 percent this year, Jansen says. “My goal is to take Fastenal Manufacturing ... to $500 million in the next five to 10 years,” he says. Additionally, “The contin-ued evolution of our business is go-ing to allow us to capture more and more of our market.” Fastenal’s offerings include in-ventory and product services, such as process mapping. “Our inventory

Fastenal Co.Midwest

fastenal’s manufacturing sales grew more than 10 percent in 2013, and are expected to grow by 15 percent this year.

A Sharp BusinessAnother area where Fastenal excels is tool and cutter regrinding, which has 35 employees and reached $3 million in revenues in 2013, Cory Jansen says. “Using our stores and the 300-plus semis to transport the worn tools to and from our regrind location saves the customer on freight and prolongs the life of a cutting tool,” he says. Each month, the division re-sharpens approx-imately 30,000 tools, using the latest CNC and manual equipment from multiple manufacturers, including ANCA, UTMA and Hybco. “Our experi-enced machinists can sharpen [the client’s] cutting tools to like-new condition for a fraction of the cost of buying new products,” Fastenal says. “In addition to our re-sharpening and regrinding services, we also manufacture specialized tooling, including step drills and made-to-print cutters.” The division commonly services multiple items, including:

> Carbide and masonry drills

> Counterbores

> Dovetail cutters

> Wood bits and auger bits

> Spade drills and bits

> Cold saw blades

> Double end centerdrills

But the division’s strength, Fastenal asserts, is in its people. “In an industry that requires significant time to train skilled machinists, we’re proud of our minimal employee turnover – and we’re pleased to put that experience to work for [customers],” it says. “Our skilled machinists always put the custom-er’s needs first while strictly adhering to stringent quality standards.”


management specialists will work with [our client’s] personnel to map how product flows through [their] current system and identify areas where oper-ational costs can be reduced or elimi-nated,” it says. “We will uncover hid-den sources of supply chain waste to provide total cost-savings solutions.” Fastenal also offers product sourc-ing through its FASTCO training com-pany, which “can identify and audit factors capable of meeting your prod-uct requirements in terms of quality, price and delivery,” it says. Through FASTCO, Fastenal pro-vides turnkey importing of virtually any per-print or reverse-engineered product by “leveraging our customs clearance team, international ship-ping contacts and extensive service

networks in the U.S. and Asia,” it says. “Our sourcing specialties include cast-ings, stampings, forgings, injection moldings and casters, and our services

include factory audits, first-article in-spections, pre-shipment inspections, customs clearance and delivery of product to your location.” mt


Green ApproachFastenal Co.’s lean quality initiatives have led to its green initiatives, which are also focused on reducing waste. “Our green approach is to continuously improve our green credentials,” the company says, “with smart resource use and optimized distribution routes representing two key areas of focus contributing to overall company sustainability and responsibility.” The company adds that its green approach is aligned with its government contract compliance process-es. “It is our mission to operate our business with minimal environmental impact and help our customers do the same by offering green products and services to help them meet their sustainability needs and goals,” Fastenal declares. Its initiatives include recycling most of its incoming packaging materials, such as cardboard, polystyrene, shredded paper and air bags. Additionally, “We use composite pallets and totes for shipping, and our corru-gated boxes used for repackaging are made from post-consumer recycled content,” it says. Fastenal also has packaging-reduction efforts at some of its distribution centers, with an automated stor-age and retrieval system. “Reusable totes are used in place of cardboard boxes with this new system,” it says. “Further packaging reduction efforts are also underway for incoming, high-volume products.”


Documents

Headquarters: Winona, Minn. 629 Being ... · cludes hot-forged and cold-formed parts, regional distribution centers ... Another area where Fastenal excels is tool and cutter regrinding,