profitable account growth in today’s market point-of-work ...unlike the previous industrial...

Proven Techniques:

Leveraging Next-Gen Point-Of-Use Vending,

Profitable Account Growth In Today’s Market

Point-Of-Work

Technologies

® 2009 Apex Industrial Technologies LLC All Rights Reserved

Apex White Paper—Proven Techniques – Leveraging Next-Gen Point-of-Use Vending

Contents Don’t suffer the same fate as the gazelle ............................................................................... 3

A smart solution ........................................................................................................................................ 3

Building relationships, growing business .................................................................................................. 4

Both bottom lines benefit ......................................................................................................................... 5

C&T practices what they preach ............................................................................................................... 5

Smart solution for suppliers of all sizes .................................................................................................... 6

Reliability equals savings........................................................................................................................... 7

Bundling Brings Business ....................................................................................................... 8

How to bundle up more business ........................................................................................................... 10

Distributor stays a step ahead of competition ...................................................................... 11

When solutions meet needs ................................................................................................................... 11

Bringing in business ................................................................................................................................ 12

The dollars make sense ........................................................................................................................... 13

Functionality combined with reliability .................................................................................................. 13

Creativity leads to increased sales .......................................................................................................... 14

Distributor’s market share ‘spreads like wildfire’ ................................................................. 14

Giving ‘re-boot’ new meaning ................................................................................................................ 14

Reliability breeds content ....................................................................................................................... 15

‘Spreading like wildfire’ ........................................................................................................................... 15

Apex Industrial Technologies 7300 Central Parke Blvd.

Mason, OH 45040 513-204-2100

www.Apex-Industrial.com


Don’t suffer the same fate as the gazelle

The gazelle is one of the fastest animals on earth. It can run away from just about anything on four legs.

But Mother Nature played a cruel trick on the gazelle.

It has the misfortune of sharing its home turf with nature’s fastest mammal, the cheetah.

The cheetah doesn’t bother to wait for the gazelle to come to him. He uses all his wits and cunning,

silently stalks his prey, moves in and then runs down, and pounces on, his bounty.

Is your company the predator, or is it the prey?

Especially during a down economy, many distributors are seeing business fall off. Their customers’

revenues are down or, at best, stagnant, so distributors accept the “fact” that their business will suffer

proportionally. This assumption leads to defensive tactics: Distributors cut personnel and inventory

which, in turn, degrades service levels. Lead times stretch. Orders are late and customer satisfaction

goes downhill. Many distributors just shrug it all off: “It’s the way things are today” or “Everybody does

it. It’s just a ‘fact’ of life today.”

But don’t accept those “facts.” And don’t assume there’s nothing you can do.

Because you can. You can turn the current situation into a very large and very real opportunity.

Some aggressive distributors recognize this as a time when they can not only preserve the revenues

they’re accustomed to, they can increase sales. They’ve simply found a creative and effective way to

gain new customers as well as gain a larger percentage of their existing customers’ business – while

saving those same customers money by

making their operation more lean and

efficient.

This may all sound like a mass

contradiction. But it all adds up – to more

profits for both distributor and customer.

And aggressive distributors have the

numbers to back them up.

During these tough times, companies have

been forced to take a hard look at their own operations to save money. Some have eliminated jobs. But

some are finding efficiencies that will not only save jobs, but save the bottom line.

Small- to medium-sized distributors as well as the largest national and international distributors and

suppliers have let Apex Industrial Technologies’ vending systems work for them to both retain and build

business even in tough economic times.

A smart solution

C&T Industrial Supply in Mercersburg, Pa. is a full-line stocking distributor of industrial supplies, cutting

tools and machine tools and an authorized distributor of lines including Mitsubishi, Seco Tools, Walter

One customer has two machines that generate up to

$40,000 a month in sales and another has five

machines that generate up to $30,000 per month.

The plant manager of a machining and fabricating

customer with 120 employees said he realized a 22%

cost reduction for tooling and supplies last year due

to the implementation of the vending system versus

the old tool crib.


C&T Industrial Supply not only utilizes vending systems from Apex

Industrial Technologies at their customer sites to build and retain

business -- they also use Apex industrial vending in their own facility.

Waukesha, American Torch Tip, Femco.kafo CNC Machine Tools, Summit Machine Tools, Carborundum

Abrasives, Wikus Saw Blades, National Standard Weld Wire, Cosen Band Saws and many others.

C&T had a customer with an annoying situation that developed into a nagging headache.

But a win-win solution for the distributor and its customer was just around the corner – at the

customer’s point-of-work.

The shop did not have an attended tool crib, so management passed out tools to machine operators

through a cumbersome manual process. The shop’s manager had to leave the office every time an

employee requested another cutting insert. This interrupted both the manager’s and employee’s tasks

at hand. It reduced efficiency and increased downtime and costs.

Tracking of the inserts was inefficient at best. If one was requested, one was doled out. There was no

control of how many each employee was going through, so the company didn’t even realize the scope of

its inefficiency.

But C&T had an answer to the problem . . . one which would cost their customer nothing, and pay

immediate dividends in reduced costs, less downtime and more efficiency.

By providing an industrial vending system from Apex Industrial Technologies, C&T not only solved their

customer’s problem, they solidified their relationship with a valued customer.

Building relationships, growing business

It’s not the first time C&T used industrial

vending to strengthen ties with a

customer.

And it’s allowed them to increase sales as

well as gain new customers.

C&T Vice President & General Manager

Rick Twine explained how the

arrangement between distributor and

customer benefits both.

“We never actually sell the systems. The

customer doesn’t lease or buy them,”

Twine said. “C&T buys the systems and

provides them to the customers to use.

There’s no monthly cost or fees to them.

We pay those.”

“In every situation, in the beginning we’re only supplying certain items to

the customer. But over time we capture more and more business in

abrasives, cutting tools, welding supplies, cutting fluids and more.”


“Our customer doesn’t even have to ‘carry’ the inventory,” he said. C&T owns the machines and

restocks them.

The customer signs an “informal 3-year contract” and commits to a minimum monthly dollar figure of

purchases. Customers also give C&T first crack at other materials and supplies they normally purchase.

“An automated integration, if you will,” Twine said. “We even get automatic reorders.”

Not only does C&T’s customer save time and money, so does the distributor.

“Our order processing and fulfillment costs are way down with the Apex system and we never have to

respond to stock-outs and emergency orders because the machines and software stay ahead of the

demand requirement.”

And a C&T employee doesn’t have to drive 2-3 hours to track the machines’ inventory as they did in the

past – it’s all done accurately, automatically and efficiently over the Internet at C&T’s headquarters,

utilizing the Apex C3i Hub.

Both bottom lines benefit

As in any business, the bottom line is . . . the bottom line. And Apex’s industrial vending systems pay

measurable dividends for C&T every single time.

“In every situation, in the beginning we’re only supplying certain items to the customer,” Twine said.

“But over time we capture more and more business in abrasives, cutting tools, welding supplies, cutting

fluids and more.”

One customer with 110 employees has two machines that generate up to $40,000 a month in sales and

another with 130 employees has five machines that generate up to $30,000 per month.

“I can tell you this: Installing (Apex) machines solidifies our presence within a facility and increases our

sales within that facility” every time, Twine said.

C&T’s customers see the benefits of industrial vending almost immediately, with increased uptime for

the customer as well as better tracking and inventory control.

“It relieves supervisors and lead people from taking time to service employees in the middle of the day,”

Twine said. “It’s especially good for night shifts.”

And it’s especially good for the customer’s bottom line.

The plant manager of a machining and fabricating customer with 120 employees said he realized a 22%

cost reduction for tooling and supplies last year due to the implementation of the vending system versus

the old tool crib.

Twine said C&T’s vending customers range from 30-50 employees up to 100-130 employees.

C&T practices what they preach

Unlike the previous industrial vending systems C&T utilized, the Apex system is more reliable, durable

and cost-effective for both C&T and its customers.


“Apex has been excellent as far as both ease-of-use and reliability,” said Twine. “We’ve been very

pleased with Apex’s support which is just a phone call away. We’re very pleased with the machines

themselves, and the service.”

And if anyone needs more proof of what C&T thinks of the Apex Edge 5000 system?

They use two of the machines in their own plant.

Smart solution for suppliers of all sizes

Vending is a lead-in to additional cutting-tool business as well as additional volume, according to Jim

Long, president of Cline Tool and Service Company in Newton, Iowa, a full-line industrial distributor and

manufacturer of cutting solutions.

“We’ve gone into accounts where we had very little existing business; now we have it all,” he said.

Although Cline Tool’s specialty is cutting tools and inserts, vending has given them the opportunity not

only to increase cutting tool sales with an existing customer, but gain additional business.

“In one plant, we had about 30% of their cutting-tool business,” Long said. “Their shop foreman tightly-

controlled things and everything went through him. You had to go to his office and get supplies from

him. He was very concerned about vending when they looked into it.

But that process was costing both the foreman and employees time, and the company money.

Vending’s proof was in the pudding. “Now, he’ll tell you that vending is the best thing ever,” Long said.

“It’s freed up a lot of his time and he is very happy with it.

“And we’ve gained an additional $15,000 per month in revenue from them, mostly cutting tools,” he

said.

Fastenal is one of the largest and the fastest-growing full-line industrial distributor in the U.S., with over

2,300 store and in-plant locations.

Fastenal has combined Apex Industrial Technologies’ Connect n’ Go technology and incorporated it into

their SmartStore program, in which FAST provides technology and stocking services. Backed by

aggressive sales and marketing campaigns, the SmartStore program is driving significant business

growth and new account acquisition at a time when the total MRO marketplace is shrinking.

The “Smart Solutions” message is resonating with prospective Fastenal customers. Plant managers,

production and finance managers, Lean and Six Sigma managers and safety managers are all looking for

ways to reduce costs and improve productivity. Keying on this message has opened new doors for

Fastenal and the result has been proven in the bottom line of Fastenal customers:

Waterloo Industries reduced its glove consumption from

$13,000 to $9,200 in the first month after two machines were

installed, and the time that tool crib attendants spent dispensing

gloves was reduced by 65%.

.”


Waterloo Industries reduced its glove consumption from $13,000 to $9,200 in the first month

after two machines were installed, and the time that tool crib attendants spent dispensing

gloves was reduced by 65%;

Cooper-Standard has reduced costs by more than $21,500 per week, and now spends less time

on inventory and has achieved a total elimination of stockouts;

JBT Food Technologies saw a 20% reduction in usage of safety gloves, and the Fastenal in-plant

manager has seen about one hour each day freed up that he used to spend dispensing gloves;

he also no longer needs to manually generate a monthly report, because they are automatically-

generated.

The machines are a “24/7 stockroom attendant,” said Fastenal’s DJ Schilling. “They eliminate waiting

time and help productivity.”

And while Fastenal’s customers have saved time and money by combining Apex and FAST

technologies, this doesn’t mean Fastenal sales have dropped. Just the opposite.

In fact, Fastenal has gained business through showing customers how to be more efficient, thereby

strengthening ties with customers and increasing overall sales. Fastenal and Apex technology has

proved superior to the systems previously utilized by existing vending customers.

Schilling explained how vending allows Fastenal to strengthen its ties with customers, which

translate to additional business.

“In some plants we had the tool business,” Schilling said. “Vending has helped us pick up the PPE

volume, since we’re already there and doing the work. It saves them headaches.”

Reliability equals savings

Xcel Energy is one of the nation’s leading electricity and natural gas suppliers. They had previously

used pilot programs in several plants using a vending machine company other than Fastenal.

But those programs led to some serious “issues”, including: The machines were maintained and

operated by a third party and Xcel

would incur service-call fees and

miscellaneous expenses dealing with

a company not familiar with Xcel;

program and implementation costs

were expensive; there were multiple

reporting and databases to

maintain; there was long lead time

on repair and service; and service

personnel weren’t familiar with each

plant’s needs.

However, by utilizing Fastenal for

their supply needs and vending

machine program, Xcel Energy was

able to:

Fastenal/Apex Team preparing for installation at Xcel Energy Riverside

plant. Xcel has realized huge cost savings by using Fastenal as their

vending systems supplier at numerous plants throughout the country.


Reduce overall program costs 30-50%

Eliminate third-party equipment and software; Xcel now deals with Fastenal on products,

equipment, software and maintenance

Streamline reporting, all from one source – Fastenal

Reduce lead time in product restock

Recently a Fastenal district manager stated that the machines have been so successful for Fastenal

that he wants to see the systems on-site at all of their customers. He had replaced a competitive

industrial vending system with seven Fastenal SmartStore units. The president of the customer’s

corporate parent visited and expressed his enthusiasm for the benefits his company received. With

an “endorsement” from the CEO, Fastenal can now develop additional growth opportunities outside

this particular plant.

Bundling Brings Business

Historically, there has been a good bit of resistance to industrial vending from industrial distributors. It

was not clear how the technology should be marketed. The business case was challenging and customer

demand was modest. So, many industrial distributors either offered industrial vending programs when

pushed by their customers or ignored industrial vending altogether.

In many cases, there was a solid basis for this approach. Early-generation industrial vending systems

were:

Too complex

Tool expensive

Too hard to implement

Today, everything has changed.

Apex Connect n’ Go technology provides the latest and best industrial vending technology at much

lower prices than historical industry price levels. This makes the business case easy to justify (and easy

for customers to say “yes”). Connect n’ Go technology makes it easier to implement, which frees up time

and resources for the industrial supplier and is easier to use, which increases customer satisfaction.

Customer demand for Point-Of-Use vending solutions is at an all-time high. In the current economic

environment, companies are actively pursuing any and all possible means of reducing costs and

improving productivity.

Leasing has also contributed to the switch to Point-Of-Use technology, and accelerated growth as well.

The low monthly lease cost of Apex Connect n’ Go technology makes it easy for distributors to bundle

the technology into their offers without tapping into their capital or existing credit lines. Leasing Apex

POU machines may cost a distributor as little as $250 per month.

Innovative suppliers such as C&T and Fastenal are a step ahead of their competitors due to their

innovative bundling of Point-Of-Use systems with the products and services they already offer. Bundling

strengthens the ties between supplier and customer, and can bring in increased business even during

The low monthly lease cost of Apex Connect n’ Go

technology makes it easy for distributors to bundle

the technology into their offers without tapping

into their capital or existing credit lines...”


tough economic times. The customer still needs to buy a certain amount of supplies even if business has

slowed, but due to bundling, the supplier has gained a larger share of the customer’s business.

In one case, a particular customer historically purchased only personal protection equipment from a

distributor. But even though the customer is experiencing a downturn in business, due to the bundling

arrangement, that customer also now buys its cutting inserts and abrasives from that distributor. So the

distributor has actually gained business, while the customer benefits by increasing its efficiency of

dispensing tools, supplies and materials.

Many suppliers are reluctant to embrace the idea of providing Point-of-Use machines at “no cost” to

customers. This violates the “traditional” business model, and until fairly recently the machines were

cost-prohibitive for suppliers.

However, new low price levels

made possible by Apex Connect

n’ Go technology, combined with

customers needing, if not

demanding, POU technology,

mean suppliers are now seeing

both the economic and the

competitive advantage in

bundled offers.

Bundling services with POU

technology not only adds

customers, it strengthens the

existing relationship between

distributor and customer in more

ways than one. Suppliers are

learning that they can lessen the chance of a competitor taking their business, because their customers

come to depend on the POU technology they are being provided.

Apex POU technology provides control and real-time information availability. This enables much faster

inventory turn rates than have previously been possible. Often inventory in well-managed industrial

vending machines turns as often as 15-30 times per year. Particularly in the case of high-use cutting

tools, inventory turns can be accelerated to a point where inventory is turning every 3-5 days.

So it’s now an advantage rather than a disadvantage to offer consignment inventory as a standard

option in bundled service offers.

Bundling offers several advantages to a supplier, especially in today’s economic climate:

It insulates existing customers from being taken away by the competition

Those existing customers will often give the supplier business that they didn’t previously have,

as in the aforementioned example.

Apex Industrial Technologies case studies have documented

companies which, via industrial vending, have:

Reduced spending by 20% and increased the uptime of 50

employees

“Greatly reduced product consumption”, realized “major cost

savings” and gained control over its inventory

Freed up 65% of tool crib employees’ time and cut glove

consumption by $4,000 per month

Virtually eliminated waste and hoarding of MRO supplies

while reducing consumption by 20%

Reduced safety glove consumption by 13,000 each year and

safety glasses by 4,000


Finally, bundling is a great way to grow a distributor’s business. Industrial vending can be a way to get

your foot in the door with many companies that haven’t previously given strong consideration to a

particular supplier.

Combining all that with an increase in competitors making the shift, a distributor of industrial supplies

cannot afford to bypass this opportunity.

How to bundle up more business

There are three types of bundled offers being used by suppliers:

Bundled Offer with Integrated Supply Program

Bundled Offer With Supplies

Bundled Offer With Supplies and Services

In a Bundled Offer with Integrated Supply Program, many integrated suppliers now include POU

technology as part of their contracts for outsourcing MRO procurement and distribution. Often the end-

user requires POU technology as part of the Statement of Work.

As with most Integrated supply engagements, once the integrator is appointed, the integrator becomes

the procurer of the POU technology on the end-user’s behalf. By automating repetitive, manual tool crib

transactions and moving them out to the Point-Of-Work, Integrated Suppliers can improve the level of

service to their customers while decreasing their cost to provide those services.

In a Bundled Offer With Supplies structure, a supplier of consumables offers the POU technology as

part of the supply program. There are numerous derivations of this structure ranging from simple to

complex. The simplest of these is when a supplier offers to provide a machine as part of an agreement

to provide supplies.

A cost may or may not be assigned to the machine

A monthly payment may or may not be assigned to the machine

A minimum purchase amount is typically required on a monthly or annual basis.

In some cases, the machine is provided at no charge if the supply purchase obligations are

met. This is often referred to as the “Free machine” program. In other cases, a rebate or

credit is established based on purchase volumes to offset the imputed monthly cost for the

machine. The “Free Machine” is a successful means of gaining profitable market share.

Many suppliers are now driving an important change in offer structures. The “Free Machine”

offer is shifting to “Free Use of a Machine” (and away from “We Will ‘Give’ You a Free

Machine. This allows the supplier to:

1. Retain more control over the end users’ purchasing and

sourcing behaviors

2. Tie use of the machine closely to product purchases, year after

year

Kenna’s Use of POU

Strategies For

Distributors


Cline welcomes Tech Fair visitors to see Apex

Connect n’ Go Technology in its own plant.

3. Tie customers more closely to the supplier

4. Increase the barrier to change

5. Build a large pool of strategic assets deployed at customer

accounts

In some variations of this structure, suppliers “buy down” the monthly payment for their

customers by offering a partial subsidy. This approach is frequently used for low-volume customers. For

example, for a POU system with a standard monthly payment of $ 250 per month, a vendor might offer

a $125 per month subsidy, thus buying down the cost by half.

A Bundled Offer With Supplies and Services structure is very much like Bundled Offer With Supplies,

except that the supplier may offer additional services such as repackaging of vendible products and

refilling machines.

Distributor stays a step ahead of competition

Cline Tool and Service Company in Newton, Iowa is a manufacturer of custom tool cutting solutions, a

full-line industrial distributor and provider of value-added integration programs. For over 50 years Cline

Tool has provided project management solutions for Fortune 500 companies to small businesses.

Cline Tool’s Integrated Supply Programs offer technical

support, upfront planning, supply chain analysis, custom

reporting and detailed cost savings reporting. As both a

full-line manufacturer and distributor, Cline “understands

the needs and processes necessary to lower your cost of

manufacturing. It is the tooling – and processes in which

they are employed – that dictate the efficiency of your

whole operation.”

Cline’s value-added integration and dispensing programs save companies money and improve efficiency.

When solutions meet needs

A few years ago the company saw that a growing number of small- to medium-sized companies coveted

the technology of industrial vending, according to Cline Tool President Jim Long. Customers saw

information on industrial vending in trade magazines or at shows and saw its potential for their

companies, primarily with cutting tools but also with other items.

But many times the smaller companies didn’t have the spend to support it, Long said. And Cline Tool

couldn’t afford to spend the roughly $12,000 per machine plus software and installation costs, either.

“We saw a need for a relatively low-cost system but which also had the reporting capabilities that were

needed,” Long said.


Visitors to Cline Tool Tech Fair watch demo of Edge 5000 Industrial

Vending System.

“Small- to medium-sized companies frequently have little or no access to data. The crib is a black hole

that just sucks these products through and many of the older-generation vending systems aren’t good

for tracking. The older technology was too complicated and too expensive.

Cline Tool saw that its previous industrial vending machine supplier was not a good choice for point-of-

work vending.

“Apex really fit,” Long said, with its combination of price, functionality, reliability and tracking

capabilities.

“If a company is spending $4,000 to $5,000 per month, we can almost justify putting a machine in for no

charge,” Long said.

With Cline Tool’s previous supplier, that spend level required to justify providing a machine was in the

$9,000+ range.

Bringing in business

Cline Tool saw the value in industrial vending – the company even used Apex Connect n’ Go technology

at its manufacturing facility.

And more and more their customers saw the value in vending.

However, there was a disconnect.

“We and other distributors traditionally would go into a customer and they were interested in vending,”

Long said. “But many times they never get you the spend data, then interest fades and nothing happens.

“Now, our approach is to tell them not to

worry about getting us the data. I send a

team to their facility to move the process

along.”

Vending is a lead-in to additional cutting-

tool business as well as additional volume,

Long said.

“We’ve gone into accounts where we had

very little existing business; now we have it

all,” he said.

Although Cline Tool’s specialty is cutting

tools and inserts, vending has given them

the opportunity not only to increase

cutting tool sales with an existing

customer, but gain additional business.

“It’s hard for our customers to quantify

usage reduction due to vending,” Long said. “Many of them are job shop accounts where there’s a lot of

ebb and flow to their business; work is up and down, schedules are up and down. It’s not like a large

automotive supplier that’s doing a constant business. It’s not easy to quantify.


Expert tool information presented at Cline Tool Tech Fair.

“We use data from the Apex system for cost-analysis and go show them potential cost savings and make

suggestions.”

The dollars make sense

“In one plant, we had about 30% of their cutting-tool business,” Long said. “Their shop foreman tightly-

controlled things and everything went through him. You had to go to his office and get supplies from

him. He was very concerned about vending when they looked into it.

But that process was costing both the foreman and employees time, and the company money.

Vending’s proof was in the pudding. “Now, he’ll tell you that vending is the best thing ever,” Long said.

“It’s freed up a lot of his time and he is very happy with it.

“And we’ve gained an additional $15,000 per month in revenue from them, mostly cutting tools,” he

said. “They’re very supportive of vending.”

The most common “spillover effect” is for Cline Tool to have a customer’s cutting tool business, and

vending allows them to gain PPE spend.

Long said Cline Tool “had sort of a loose integration program” with a company in which Cline Tool was to

supply all the crib and vending items. But the customer wasn’t living up to its purchasing agreement; the

crib attendant priced and controlled everything and their business with Cline Tool ebbed and flowed.

“So we did an analysis for the vice president and showed him ‘true cost’ – the cost of holding inventory,

shipping costs, etc.,” Long said.

“We ended up showing them about 50 items that it made sense to vend. We probably gained $8,000 to

$10,000 per month.

And the customer is pleased because the tool crib attendant no longer has to manage and check-in

items so often. “As a matter of fact, her time has been freed up and she’s been given other

responsibilities,” Long said.

“If you look at the mix of products we sold five years ago, there was hardly any PPE,” Long said. “Now

we have shelves and shelves of PPE.”

Functionality combined with reliability

At two locations recently, Cline Tool pulled the

existing older-generation industrial vending

machines and replaced them with next-generation

Apex systems.

The previous systems “ went down far too often and

Apex had better functionality,” Long said.

“Management liked Apex better, and now the Apex

machines also manage their PPE equipment.”


Fastenal Energy Account Specialist

DJ Schilling next to a SmartStore on

the Apex assembly line.

“In this market, MRO customers come and go regularly,” Long said. “But we have never lost a program

that used vending. Once you are engaged and have an industrial vending system properly implemented,

a customer is much less likely to shop you around.”

He said that, when first approaching a company about vending, “We’re an open book, we’re very up-

front with customers; it’s more like a partnership.”

Cline Tool has been very successful bundling the Apex vending solution with its product and service

offerings.

“If they reach certain volume levels, the machine is no cost and we can also absorb the software cost,”

Long said.

Creativity leads to increased sales

Cline Tool has also gained new customers in other creative ways.

Working closely with Apex Industrial Technologies, Cline Tool has promoted Connect n’ Go technology at

tech fairs held at Cline Tool’s headquarters in Iowa.

Customers and potential ones attend the tech fairs and receive demonstrations of Apex’s industrial

vending systems technology . And Cline Tool also has the opportunity to showcase its wide range of

products and services.

At a recent tech fair, Cline Tool attracted new customers now projected to spend well into six figures

annually.

Distributor’s market share ‘spreads like wildfire’

Fastenal is one of the largest industrial distributors in the U.S. and the fastest-growing, with more than

2,300 stores including in-plant facilities.

DJ Schilling is in corporate sales, overseeing several million dollars in

sales annually.

His job is to gain business from end-users in power generation. He

ensures that the same high level of customer service is in all plants

and that pricing is consistent.

Schilling’s customers have the most Fastenal vending machines.

Fastenal takes Apex Industrial Technologies’ Connect n’ Go

technology and incorporates it into their SmartStore program, in

which FAST provides technology, inventory management and

stocking services at the point-of-work.

Giving ‘re-boot’ new meaning

Fastenal utilizes industrial vending as a sales tool to maintain and


add business.

“As in many industries, I’ve never seen any power plant add employees or replace all the retirees or

someone who leaves,” Schilling said. “At one plant recently, two folks retired; only one was replaced as

budgets got tighter.”

More workload is put on the existing employees and efficiency is at a premium. And technology,

reliability and functionality are mission-critical.

Schilling explained that power plants typically have many out buildings, and point-of-work vending saves

companies time and money.

“We put machines in coal yard areas and employees don’t have to get in their trucks and drive just to

get a pair of gloves anymore,” he said.

Schilling said one plant’s stockroom was in a location far from a previous supplier’s vending machine --

before Fastenal partnered with Apex.

The attendant was getting tired of hearing “We need you to go re-boot” the machine and then having to

take time to drive out to the machine, re-boot it and drive back.

The previous system’s lack of reliability led to one-too-many re-boots.

She finally told one of the employees: “If you tell me to re-boot this machine one more time, I’ll put that

boot somewhere else!”

Reliability breeds content

Fastenal’s service combined with Apex’s reliable Connect n’ Go Technology (no MS Windows) solved the

constant re-booting problem, freeing up time for both the stockroom attendant and the workers in the

field while reducing downtime.

Also, with the previous vending machine company, the plant had to deal with not only high service call

fees but service personnel who were unfamiliar with the company. Maintenance and program costs

were high and there was long lead time on repair and service, and service personnel weren’t familiar

with each plant’s needs.

Schilling said many plants which had another vending system now have Fastenal SmartStore systems,

and Fastenal receives many compliments due to the systems’ reliability, durability and automatic

tracking capabilities.

Fastenal’s vending systems have not only reduced the plant’s costs. Restocking lead time has been

reduced and the plant has gained the consistency and reliability of Fastenal being their one source for

stocking, equipment, software and maintenance.

The machines are a “24/7 stockroom attendant,” Schilling said. “They eliminate waiting time and help

productivity.”

‘Spreading like wildfire’

Schilling explained how vending allows Fastenal to strengthen its ties with customers, which translate to

additional business.


Fastenal replaced Xcel’s Energy’s previous vending systems with FAST SmartStore vending solutions at the Sherco generating

plant in Becker, Minn.

“In some plants we had the tool business,” Schilling said. “Vending has helped us pick up the PPE

volume, since we’re already there and doing the work. It saves them headaches.”

He said the previous vending machine supplier was a “very bad name” and equipment was very

maintenance-intensive.

“The safety machine vendor wasn’t in the plants,” Schilling said. “There was no local presence, they had

to fly in the tech guy. We actually serviced it more ourselves.

“They like Fastenal handling the machines – they know Fastenal.”

He cited a recent example of a plant where Fastenal has not only gained business; they expect to garner

even more than they might have expected.

In one plant Fastenal “had some business but not a lot,” Schilling said. “But the story (of vending) spread

like wildfire from people we didn’t know about, and we’ve found out about departments that we didn’t

even know existed.”

Now, they are customers.

Apex Industrial Technologies

7300 Central Parke Blvd. Mason, OH 45040

513-204-2100 www.Apex-Industrial.com

profitable account growth in today’s market point-of-work ...unlike the previous industrial...

Documents