Rapidly approaching fifty years in business, American-based industrial supply company Fastenal has grown from one small location in Winona, Minnesota to over 2,700 stores and a presence in all fifty states and over twenty countries worldwide.
In 1967, Bob Kierlin – along with four of his friends – began the business in a 1,000 square foot location in Winona, Minnesota. A revolutionary company even back then, Fastenal began selling screws, nuts, threaded rods and other fasteners used daily by construction and manufacturing companies.
Fastenal continues to thrive and maintain its simple, yet meaningful, motto: Growth through customer service.
Fastenal carries a number of exclusive brands such Body Guard, Clear Choice, DynaFlo, Blackstone, FNL, Rock River, Tritan and Talon providing customers with a diverse range of products for construction, original equipment manufacturing and maintenance, repair and operations.
Despite considerable growth, over the past forty-eight years, Fastenal believes that the keys to its success remain the company’s unparalleled customer service and commitment to quality.
In addition to locations in large cities such as Houston, Toronto, Indianapolis and Shanghai, Fastenal is proud to have a presence in smaller communities such as Chowchilla, Listowel, Ontario and Thompson, Manitoba.
The company has a strong presence in Canada. Its Canadian operations were incorporated on June 29, 1994, and they will be celebrating its twentieth anniversary and new Canadian headquarters in September.
Just last year, Fastenal invested over $25 million in its new distribution center based in Kitchener, Ontario. The new facility, located at 900 Wabanaki Drive, is a massive 150,000 square feet. Planning for the future, it is part of a twenty-year plan which represents a significant commitment to the company’s Canadian operations.
The new building is strategically located near Highway 401 for the convenience of transport trucks bringing supplies to Kitchener from the United States. “The warehouse is located in Kitchener because it allows us to reach Quebec and South Western Ontario logically, with our trucking system, within the legal driving hours,” says Tony Murphy, Fastenal’s regional vice president.
The state-of-the-art distribution center – which will also function as Fastenal’s head office for Eastern Canada – currently supplies 140 stores in Ontario, Québec and the Maritimes, handling and shipping approximately 10,000 items per day. The new building will benefit not only the company and its customers, but the local economy as it makes the entire process of distribution simpler and more efficient.
“Our new Kitchener facility is roughly 150,000 square feet but set up to double in size,” comments Murphy.
One of the many remarkable features of the new distribution centre is its Automated Storage Retrieval System (ASRS), which frees manpower through the use of robots, taking product to pick stations, which will support further growth of the company.
“We are not reducing labour,” says Murphy, “this just helps make our operations run more efficiently and more accurately.” Over one hundred employees work out of the Kitchener office, and Fastenal has more than 18,000 staff worldwide.
“The new technology incorporated into the facility is anchored by an Automated Storage and Retrieval System, or ASRS,” says Fastenal’s Regional Operations Manager, Scott Reynolds. “This consists of a five crane system that spans 370 feet long and 40 feet containing 105,000 unique storage locations which is expandable to a 12 crane system and over 275,000 locations. This technological investment allows Fastenal to provide a much higher level of service to its customers through improved accuracy and shorter lead times. The first DC in Kitchener, which opened in 2003, was chosen due to its proximity to major transportation routes, primarily the 401 corridor, which allows us to reach the most stores in the shortest amount of time. Another major factor is the labour base within the area. Having a very reputable College and two Universities provides a choice labour pool for the rapid growth of a professional industrial supply company. Over the years this distribution centre has employed hundreds of students, many of which have moved up within Fastenal even outside of the distribution centre itself into positions such as sales, national accounts, quoting, accounting, finance and various management positions. The success with this vocational partnership along with the transportation aspect made the decision easy to stay within the area for as long as it can support Fastenal’s growth.”
The company continues to expand its range of products and locations as it experiences double-digit growth, and the new Kitchener distribution center is one of six similar locations under construction. In addition to Kitchener, the company has store locations in Stratford, Elmira, Waterloo, Ayr and Guelph.
Over the decades, Fastenal has greatly expanded its product selection while still carrying a range of fasteners – including bolts, screws, nuts, anchors, washers, rods and studs, retaining rings. Fastenal also now proudly supplies a diverse range of safety equipment such as hand protection, eye protection, safety garments, power tools, hand tools and corded and cordless power tools.
Fastenal meets the needs of its customers with everything from supplies for lifting and rigging to those for welding, fleet and automotive. The company also carries parts for power transmission, motors and HVAC as well as raw materials, hardware, lighting, mil-spec (defence standard) products and even office supplies and furniture from chairs and desks to filing cabinets.
In order to determine which products it needs to source for clients, the company analyzes a number of sales trends and customer needs, says Dana Hanlon. Canada Supplier Development Manager Hanlon has been with Fastenal for thirteen years, three of them in the current manager role. Hanlon says the new facility in Kitchener serves as another positive sign of the company’s ongoing commitment to its staff, its customers and the future.
The company’s original business plan was to use custom industrial vending machines to dispense nuts and bolts. In addition to adding new stores to keep up with client demand, the company continues to develop additional vending machines and other on-site solutions to meet and adapt to market needs.
With over 41,000 machines installed company-wide, Fastenal’s FAST Solutions is the largest industrial vending program in the world. In addition to providing the point-of-use access to supplies, FAST machines generate detailed usage reporting, which drives a reduction in consumption.
“The customer has access to instant reporting available 24/7,” explains FAST Solutions Manager Jamie Gofton. “FAST Solutions lowers consumption for the end user, resulting in less downtime and fewer stock-outs.”
Along with reduced consumption (usually twenty-five to thirty-five percent, due to the machines’ controls and reporting), productivity is increased, and the process paper-free. Automated ordering ensures local Fastenal representatives monitor and refill the machines.
“Currently, we have over quarter million vendible parts and eighteen different vending machines (available units),” comments Gofton. “Fastenal provides the equipment at no cost to customer; customer pays for what they dispense and an annual hosting fee. As a result of having a FAST solutions machine on site, customers are seeing over 35 percent cost-savings based on reduced consumption.”
The company distinguishes itself from its competition through its available selection of products. It carries tens of thousands of individual items. Online, the company has over 82,000 fastener products listed, almost 14,000 items under tools and equipment, over 129,000 cutting and metalworking tools, approximately 12,500 electrical items and nearly 18,000 power transmission and motor products.
With over 2,700 stores, Fastenal has the inventory, fast response time, and superior customer service to meet the requirements of all clients, large and small.
“In Canada, all of our stores have the same showroom offering, but they will add to it based on the customers they service,” says Hanlon. “It depends on the market they’re servicing. For example, someone located in Fort McMurray, Alberta may have more products related to the oil and gas industry, versus a store located in Kitchener, Ontario. Being a decentralized company allows our branches to be flexible with inventory and adapt to their customers’ requirements.”
Fastenal’s regional distribution centers work in close collaboration with its local stores across North America to anticipate demand and distribute product promptly as required. This is aided by a strict, quality management system backed by engineering expertise and worldwide testing laboratories. From its multi-site custom manufacturing division and thousands of manufacturing partners, Fastenal can deliver products more efficiently than the competition via its large truck fleet.
The company sources materials both locally, from markets in which it is active, and globally. Fastenal’s marketing partners include such well-known suppliers as Milwaukee, Norton, Loctite, MCR Safety, 3M, Honeywell and ITW.
“Our suppliers are vital to our growth because they offer quality products for our customers; they help educate our sales force with product knowledge and provide solutions in conjunction with our sales force,” says Hanlon. “Our key suppliers are true partners in our business.”
Manufacturing consists of primarily four divisions: precision machining, cold forming, hot forging and stud cutting. To meet the needs of customers internationally, Fastenal has strategically located operations in a number of countries.
“We have nine manufacturing facilities, with six of those being in North America,” says Vice President of Manufacturing Andrew Taylor. “Our three international locations include the Czech Republic, Malaysia and Brazil.”
Fastenal Manufacturing has a broad spectrum of capabilities. “We make so many things, with so much variety. We use a waterjet to cut parts for hip implants; we make fasteners for cranes holding people up hundreds of feet in the air, and we make valves that go into the oil and gas field.”
Fastenal does not traditionally spend funds on marketing, choosing instead to invest in the business itself, namely its people, operations and sales force. Although the company has, up until now, primarily grown organically, it acquired certain assets of Av-Tech Industries late last year. Av-Tech is a wholesale distributor of aerospace products including fasteners, aircraft parts and electronic components.
“It expands our footprint and opportunities in the aerospace market,” says Hanlon of the acquisition, which shares Fastenal’s commitment to quality, customer service and many of the same core values as Fastenal. At the time of the purchase, Av-Tech Industries’ President Allen Avery stated “This union will help us grow and better serve our customers while maintaining the excellent quality and service our customers expect.”
An industry-wide leader, Fastenal’s strengths and successes come from blending technological innovation with listening to customers’ needs and adapting quickly.
“Our slogan is, ‘We are where you are,’” says Hanlon. “There is a Fastenal located in most cities in Canada as this truly helps us serve our customers better. We are a decentralized company which allows our stores to adapt and respond to their customer’s needs in their own market.”