UMC Relies on Fastenal to Drive Costs Out of Their Business
April 1, 2021
By Blue Print Editorial Team
By Blue Print Editorial Team
KNOWING HOW TO GET THINGS DONE
As a growing company in a fast-paced industry, you might mistake UMC for a new player, but the organization opened its doors in 1920. In that time, the company has worked on some of the most iconic buildings in Seattle, including the famed Space Needle.
Today, UMC is an innovative mechanical contractor handling HVAC, plumbing, fabrication, and fitting work in high-tech facilities, such as hospitals, labs, data centers, and high-rises. They specialize in sustainable buildings that help reduce energy and operational costs for tenants throughout the Puget Sound region. And they believe creating a high-performance building that can conserve resources starts with design, continues through construction, and requires ongoing check-ins during its lifecycle.
“The construction world has changed over the past couple years, and tends to get faster and faster,” said Ian Footer, UMC’s warehouse manager. “So, we always look for ways to bring innovation into it, to help with a proactive approach instead of just reacting to every situation.”
MORE WORK IN LESS TIME
UMC’s campus has three buildings and hundreds of employees working to support the projects and teams out in the field. Each jobsite needs to have consumables, equipment, and materials delivered daily so that teams can stay on the established timelines.
“Our biggest challenge is just trying to get material to jobsites in a timely manner,” said Footer. “What we were noticing initially was, with the amount of work in the area, our vendors were having a hard time keeping up, and it would take them up to a couple weeks to complete some of our tool requests. So we were looking for any sort of an edge to help with that process.”
According to Footer, jobsites have to adjust priorities constantly because what was planned the night before can change by the morning. For example, if they were going to pour concrete but conditions have changed, they have to be ready and able to work on something else.
“Our growth has gone up substantially in the last year and a half,” said Tom Donaldson, UMC’s supply chain manager. “We’ve seen the requirement for more support. The result of that is the field has more needs in a quicker timeframe, and we as a result have to respond to those needs.”
LOOKING FOR EFFICIENCIES
With the increased demand and desire for tight timelines, delays couldn’t be tolerated. UMC decided it needed to look for ways to improve the supply chain and make sure supplies flowed from the warehouse to the jobsites with as little downtime as possible. After some research, they brought in “a couple different vendors” before doing a test run with Fastenal.
“With Fastenal, we saw an opportunity with a large corporation,” said Donaldson. “Having a background myself in wholesale management and supply chain management, I recognized the fact that there was a lot of opportunity with efficiency, with support, and with technology, which was big for us.”
In the initial phase, Fastenal brought in only a handful of products including a few ladders, some core tools, and a scanner to issue items to each jobsite. This allowed UMC to better track costs for each of their contracts, an increasingly critical function as the pace and scope of their business expands.
“When Fastenal approached us about helping us out and what they could do for us, we actually started out fairly small,” said Footer. “We brought in consignment. We had just a shelf or two, just to see how the program would work. And it actually worked out so well we decided that we would give them more space in our building.”
INTEGRATING DISTRIBUTION WITH CONSTRUCTION
According to Footer, one of UMC’s biggest challenges was the variety of tools being used by different unions, departments, and projects within UMC – a fragmented, overlapping product mix that made it difficult to stock and plan for project needs. His first order of business: collaborate with Fastenal to create a standardized list of parts that would meet the majority of application needs across the business.
Next, Fastenal’s implementation team set up a compact onsite ‘branch’ to stock and manage those core items. In addition, vending machines were placed in UMC’s two fabrication shops and on project sites, providing immediate access and traceability to high-moving consumables. To meet UMC’s daily needs, Fastenal has a full-time manager and two part-time employees working on the campus with the same hours as the team from UMC. The program is also supported by two Fastenal construction specialists, Corey Roberts and Aaron Coffman.
“What we found is that we have created an addition to our staff,” said Donaldson. “The Fastenal employees work with our team, they communicate with them. They make sure they’re on top of the billing issues, making sure the receiving is being done properly. The other part of that is they incorporate and work with our safety group and help us to look at samples of new products, an opportunity that we don’t always have with a lot of vendors. So, it’s been in some ways a bit of a luxury to have that in house where you can walk out to the store and you can get information, you can get product, and they’re very responsive and helpful.”
Fastenal has invested in the partnership through onsite staffing, point-of-use solutions, an ever evolving mix of onsite consigned inventory, and is now issuing tools right to jobsites. All of this helps UMC leverage the Fastenal model to drive delays and costs out of their business.
One of UMC’s previous pain points was excessive processing of POs (which totaled around 40,000 per year prior to Fastenal). Fastenal’s IT team provided an e-business integration solution that dramatically reduced paperwork and administrative costs for UMC’s purchasing department. Instead of having to cut individual POs for all of the orders Fastenal fills each week, a single itemized weekly invoice flows to UMC’s tool and equipment manager, Melissa Feiler, to review.
“Fastenal has helped us immensely with cutting back on POs and the amount of work going up to our purchasing department,” said Melissa Feiler. “The Fastenal onsite staff issue invoices directly to me, and they don’t send it all up to purchasing anymore. So, it’s been cutting back on the amount of POs that our team has to write. We only have one invoice for, say, 100 orders a week. That’s 100 fewer POs in purchasing.”
Meanwhile, the Fastenal vending solution helps UMC on two fronts: by putting commonly needed supplies at the points where they’re used the most (within UMC’s two on-campus fabrication shops and, more recently, on remote jobsites), and also by connecting each vended item to an individual and a specific project code. This allows UMC to run detailed reports to see where items are going, how usage is changing, and where adjustments are needed.
“The beauty of the vending machines is that the guys on hand will have the materials that they want when they need them,” said Footer. “They walk up and put in their employee number and their job number and they get exactly what they want. It’s extremely helpful because we do not write POs for that. It’s all done electronically. We get a report at the end of the week, and we go through and look at each line item to make sure it was correct and got applied to the right job. Then it goes and gets uploaded into our system. It never goes into the purchasing department to write a PO. So it takes fewer hands to do the work that we used to do.”
The machines send digital alerts if stock gets low, and the Fastenal onsite team handles replenishment so that UMC’s team can stay focused on their projects without worrying about inventory. Product standardization, onsite inventory and support, point-of-use vending, and e-business integration – each helps UMC operate more efficiently and focus on what they do best.
“While the success of the relationship between UMC and Fastenal has helped to bolster our growth in the last few years, what we will need moving forward is further technology and innovation in partnership with Fastenal,” said Donaldson. “The past success of the relationship and all of the technology and innovation that’s been brought to it have been fantastic. What we’re more excited about is the growth opportunity between the two companies. Innovation and technology will drive that. It’s an emerging market that we have to meet a large demand for, and we feel as partners, we can do that.”
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WHAT THE UMC TEAM SAYS
Ian Footer I Warehouse Manager
“Having the Fastenal employees out there, they bring a world of knowledge and all their vendors. So you’ll have a conversation with them and they’ll throw out, ‘Have you heard of this group?’ or ‘Have you ever heard of these guys, because they are really good at this.’ That partnership is constantly evolving back and forth. You think you’ve hit the peak and say to yourself, ‘This is all that Fastenal can do; I know everything that they handle.’ But you don’t know everything that they handle. They’re always bringing more to the table, and it’s providing a better service overall for our own employees.”
Tom Donaldson I Supply Chain Manager
“I think we’ve worked well with Fastenal to make them understand the challenges of being a mechanical contractor in this market. It’s very difficult. It’s demanding. The owners and the general contractors have high expectations from us in a short time frame, and we need people who are responsive to that. Fastenal was one of those partners for us. I like the fact that there’s a mutual respect for one another, a desire to succeed, a desire to be one of the best in the industry, and be an innovator and be a pusher. I think that’s what’s driven this relationship in the right direction.”
Melissa Feiler I Tool & Equipment Manager
“Fastenal really helps us with change orders. We could get an order in at 9 a.m., and by 10 o’clock Fastenal has the order picked and to our receiving department so that I can get it on a truck by noon, and get it out into the field by 1 o’clock. You just never know what they’re going to need at what time to complete a project. To have them here, onsite, to just pick it up and go: They get it done for us.”
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