Global Fastener News

1997 FIN – Wittersheim, Freymark, Derry, Turnbull, & Sun at IFE Offer Global Forecast

June 27, 1997 FIN – Fewer fastener suppliers is the future worldwide but the competition provides opportunities, a panel of industry leaders told the International Fastener & Precision Formed Parts Manufacturing Exposition this month.

Despite the trend toward globalization, the end is not near for small companies, panelists agreed.
“There will always be a place for the 10-30-employee company,” Semblex president Jim Wittersheim said. “The small and lean manufacturing plant is here to stay.”

Torsten Freymark of B.I. Buchanan Ingersoll (Europa) GmbH said small European manufacturers are “focusing on niche production and outstanding engineering.”

Panelists also expect a broader definition of fasteners in the future. When asked if adhesives will replace fasteners, distributor Bill Derry of Field Fastener Supply said the industry “will view ourselves in a broader way and recognize the technical capabilities of adhesives. We will look beyond the traditional mechanical definition.”

Freymark said weight issues alone will change which fastening systems are used.

The following are excerpts from their comments at the IFE convention in Rosemont, IL:

Turnbull: Good News for the Experienced

The good news for North American fastener manufacturers is that “an intimate knowledge of OEM business in the U.S. will prove valuable in the shift to global supplying.” Michael Turnbull, chairman of Purchased Parts Group USA, said.

And North Americans shouldn’t wait to take advantage of the globalization of fastener and other industries, Turnbull said. “You really can be global now.”

For example, IBM is now in 163 countries and wants to reduce the number of its fastener suppliers by 75%, Turnbull said.

In order to compete for multinational corporation business, fastener firms must “continue to have quantum levels of improvement,” Turnbull advised. The demand for zero defects “is not going to go away.”

Would-be global suppliers also must “simplify and streamline. Redundancy is unaffordable,” he added.

As in North America, information via electronic commerce will be substituted for physical assets in the global market, Turnbull said.

You will have to have the mindset of welcoming this global economy and global competition,” Turnbull said. “This is a fabulous opportunity.”

Derry: Technology Will Differentiate Competitors

“Supply base reduction is a significant force in the fastener industry today.” Bill Derry, president of Field Fastener Supply and chairman of the National Fastener Distributors Association said.

“Consumers of fasteners are attempting to reduce their time and effort on procuring fasteners and other low-dollar-value commodities,” Derry said. “As they reduce the supply base, they are also interested in increasing supplier partnerships.”

Derry predicted continued strong increases in inventory management systems.

“These technologies will be focused on reducing transaction cost associated with these low-dollar-value commodities,” Derry explained. “We will see more use of electronic order processing and parts receiving to reduce these transaction costs. We will also see significant increase in electronic commerce.”

“Technology will become a strong point of differentiation within the industry,” Derry predicted. “Strong technical companies will increase technical support services and those that are not strong technically will gravitate towards becoming low-cost providers,” Derry said of both manufacturing and distribution.

“Global competition will increase, which will create additional price pressure on manufacturers. Increased use of electronic commerce will reduce geographic boundaries for distributors and increase their competition.

Freymark: Consolidation Revving in Europe

The transition is just beginning but the fragmented fastener industry in Europe is consolidating, Torsten Freymark of B.I Buchanan Ingersoll (Europa) GmbH said.

“European suppliers are interested in ‘cooperation’s,'” Freymark added.

The trend is Europe is toward engineering and design rather than just manufacturing to specifications, comprehensive product range vs. components, and program management vs. being a parts supplier, Freymark observed.

“The changes are being driven by major customer groups,” Freymark said.

For example, Rover once had 120 fastener suppliers and now five do 40% of the business. With its acquisition by BMW, there will be more standardization of fasteners, Freymark predicted.

Freymark estimated the European fastener market at US$ 6.5 billion.

Germany is the largest fastener market at $1.95 billion, followed by France at $1.3 billion; Great Britain, $1.2 billion; Italy, $900,000; and the rest of Europe at $1 billion.

European manufacturers are facing more competition from North America, Eastern Europe and Asia to supply fastener there.

Fastener suppliers will begin looking closer at geographical presence. If Ford is going to have fewer suppliers and is in North America and Europe there is potential for establishing a global customer relationship, Freymark said.

The new European fastener supplier will provide full systems service, have broader geographical presence, participate in cooperation’s and partnerships and will “no longer be a components supplier, but an integral partner in the fastening supply chain.”

“This competition shouldn’t be viewed negatively,” he added.

Wittersheim: Licensees Key to Future

When Jim Wittersheim started with Semblex Corporation in the 1960s the “marketplace was kind of like heaven” with the U.S. dominating the domestic fastener market and exporting. “There was no such thing as using foreign material.”

But the ’70s resulted in fewer North American exports and more imports. Japanese suppliers increased and Taiwan emerged as a major factor, the Semblex president recalled.

Now North American manufacturers are turning to worldwide licensees to manufacture their products competitively.

Wittersheim said the “unofficial estimate” of Camcar fastener production is that 50% is by foreign licensees, and Phillips Screw is 30% off-shore.

Wittersheim projected growing fastener production in Malaysia and Singapore.

Tea-Nan Sun: 4 Elements for Fastener Plant

Fastener manufacturers must have four elements to succeed globally: Proper manufacturing facilities; wire supply; toolings, surface and heat treatment; and skilled operators, Tea-Nan Sun, president of Chun Zu Machinery Industry Co. Ltd. of Taiwan, said.

“Only those who fulfill the above four elements and obtain products of lower costs are able to exist.”

And he said wire supply is the most important of the four.

“More attention should be paid to the evolution of professionalism – including delivery, quality and customer satisfaction, trading development, and strategic unions,” Sun said.

Demand for fasteners will not be a problem, he said.

Taiwan manufacturers know the North American and European requirements for quality. Most of the 1,600 fastener companies in Taiwan depend on export and either have achieved ISO 9000 or are preparing for it, Sun said. ©1997/2010 Fastener Industry News