Fastener Distribution: Fundamental changes in 25 years

Increasingly complex global supply chains, vendor managed inventory, quality and knowledge… the fastener distribution game has transformed over quarter of a century. Dr Volker Lederer, president of the European Fastener Distributor Association (EFDA) and owner and Managing Director of Lederer provides his view…

This fastener distribution business has changed fundamentally in the past 25 years. I want to clarify:
• How European fastener distributors are working today,
• Which challenges they face,
• And what requirements they have to fulfil to be successful on the market.

What is EU fastener distribution in the 21st century?

For decades, wholesale distribution was about supplying fasteners to other businesses in larger quantities than supplied to final consumers, but in smaller quantities than purchased from manufacturers.

25 years ago, that was a reasonable definition of the role of most fastener distributors. Fasteners used in Europe were generally manufactured in Europe. Distributors purchased in manufacturing quantities, held inventory, and supplied in smaller quantities to local resellers or users.

Manufacturing, retailing and construction have changed dramatically during those years. The reason for that is the relentless need to improve efficiency and reduce costs.

We fastener distributors have refined and extended our capabilities into a more complex, multifunctional and multidisciplinary force. We are still fulfilling our traditional wholesaling duties. But further on we provide vital cohesion between a now global supply chain and the strategic manufacturing industries of Europe.

It is an increasingly sophisticated and systemized industry. We must invest strategically in technology and skills to meet the ever more stringent demands of our European industrial customers.

We fastener distributors provide the crucial, reliable link between cost efficient global manufacturing sources and worldwide industrial consumers.

Increasingly complex and global supply chains must be effectively managed. We have to find and cooperate with reliable manufacturers. And we must provide them efficient production volumes that can be consolidated to cost-effective shipment quantities. Manufacturing and shipment lead times can easily add up to 26 weeks and, in an uncertain world, the list of potential disruptions is always growing.

For this reason, we invest and work tirelessly to provide precisely engineered and defined solutions. That way we ensure every sector of European industry to remain competitive on a global scale.

Supporting the industrial fastener customer is no longer about picking a few boxes, loading them on a van, and delivering to the factory back gate.

Today assembly facilities do not have warehouses. Inventory is held directly on the assembly line, sufficient only for a few days’ production.

The responsibility for ensuring timely and accurate supply of fasteners, and many other so-called C-parts, increasingly now rests with us distributors. We call this Vendor Managed Inventory, short VMI. VMI is crucial for the efficiency of many European industries, from car assembly line to construction site.

VMI utilises bin systems to ensure replacement inventory is in place as soon as in-use stock is depleted. Often these systems require specialist packing by the distributor. They incorporate demand-monitoring tools ranging from bar code scanners, optical and weight sensors, to RFID tags.

Assembly never has to stop! To reach this goal, production operations are linked to the VMI distributor through dedicated online systems that monitor demand and trigger replenishment. The same systems contribute to administrative efficiency by eliminating paperwork and streamlining transactional relationships.

Inventory management has always been a fundamental role for us distributors. We maintain massive stockholding to ensure high levels of availability in response to often rapidly fluctuating demand across an extraordinary variety and range of parts.

For Europe’s leading wholesalers and distributors, it now means:
• Vast, highly efficient, automatic warehouse operations,
• Holding millions of euros of inventory,
• Deploying sophisticated location and picking systems,
• Automated packaging operations,
• And dispatching hundreds of cartons or pallets every day.

Today we need commitment to the systems, equipment and people that ensure seamless, effective support to customers wherever in the world they are located.

Fastener distributors have long played an important role in providing knowledge on joining technologies, ensuring correct product specification and supply.

The productivity and performance requirements of European industrial processes require more and more a very special fastener design. Today many of us distributors have dedicated engineers. They are working closely with counterparts in the industry to identify and design the optimum fastener solution for a particular application.

And last but not least: Quality is crucial in every application.

Performance reliability combined with the demands of automated assembly systems mean that more and more of our industrial fastener users demand close to zero-defect supply.

Fastener importers don’t just have to select reliable and cost-effective manufacturing facilities. They also have to ensure their consistent and reliable performance, batch on batch.

Quality assurance facilities in many leading fastener distributors rival those of any manufacturer. The sheer range and diversity of fasteners often means the distributor needs a more extensive range of capabilities to assure quality issues like material specification, strength, dimensions, corrosion resistance and so on.

Extracted from the keynote speech at Global Fastener Summit Fastener Show Taiwan 2018, reprinted with Dr Lederer’s kind permission.

About EFDA

The European Fastener Distributor Association (EFDA) represents the interests of fastener distributors at European and global levels. It brings together active and established national associations and a growing number of independent distributors in other European countries. In total, 170 associates have a massive combined inventory of fasteners and other CParts, with collective sales of more than €4 billion. National association members include BIAFD (British & Irish Association of Fastener Distributors), one of the founding members of EFDA.