News

American Fastener Journal, July/August 2005

To maintain profitability in a tough industry, fastener distributors increasingly purchase product from overseas manufacturers. And while managing imports can be time-consuming and labor intensive, distributors like Mark Winkler of J.W. Winco, Inc., say that there's no other way to do business: "We would source more product domestically if we could make money doing so, but it's just too expensive to buy everything here," he says.

Because paying employees to calculate lead times and figure brokers' fees, duties, and freight charges into the final cost of finished fasteners is costly and error-prone, many distributors turn to technology to automate these tasks. As a fastener distributor, you should expect your enterprise software solution to handle these processes - and many more - for you, so you can focus on negotiating for the best prices possible and providing stellar customer service.

Features that Simplify

When you import product, you might only pay one-fifth of a cent for each piece, but pay five cents in taxes, insurance, and brokers' fees. If you do not manage these costs accurately, you could lose money on everything you sell. Your enterprise software solution should automatically track every cost involved in importing product, from foreign and domestic port charges to freight costs, helping to keep you profitable and ensure accurate costing so you can stay competitive and in business.

You should also never lose touch with your inventory - even when it is thousands of miles away. Just as you track inventory levels in your warehouse, you must know what is on water, on its way to your warehouse. And, since most distributors own imported inventory as soon as it leaves its foreign port, they must always know where that inventory is - and when they will receive it - for a variety of financial, legal, and planning purposes. Your enterprise software solution should let you manage stock while it is on the water by allowing you to receive it into your inventory without actually putting it in your stockroom. Then, when the inventory arrives on shore, your customer service representatives see that the inventory is available for sale.

And, because so many fastener distributors manage their customers' inventories, your solution should also use histories to calculate lead times for you. This way, you can ensure you always have what your customers need - even when your product comes from China instead of Chicago.

Offering ROI

Winkler, an owner and executive at J.W. Winco, says that he cannot imagine going back to handling imports manually, or even tracking them through spreadsheets. "Before we moved to our current solution, final extended prices were just guesstimates at what we thought we might have spent," he says. "We never really knew how much money we were making - and it really showed at year-end," he says.

Now, the company's enterprise software solution helps executives understand what costs truly are. "We know where we stand, no matter how much material's in our warehouse or on the water," Winkler says. "We know if we're making 20 or 50 percent on any item."

As a result, company executives know exactly how much profit they make on each socket cap screw, hex nut, and washer. "It's definitely improved our business," he says. "We know exactly where we're profitable, and where we might need to push up prices."

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