Insight

Fasteners have been at the core of the Fabory business for seventy years. Ronald Baarslag talked to Phil Matten about the continuation of that focus; about good stewardship and the other strategic pillars on which he is determined the company will do the right thing for the long-term.

Holding an Executive Masters in Finance and Control, and with a senior financial management background in the Dutch distribution and telecom sectors, Ronald Baarslag joined Fabory as chief finance officer four years ago. In November 2015 he transitioned to chief executive officer. His definition of stewardship clearly recognises the company’s distinguished pedigree and the imperative to ensure ethical and compliant company behaviour. It would be wrong, though, to underestimate a quiet but unshakeable determination that the company will adapt to, and wherever possible anticipate, the changing times. The right thing for the long-term definitely includes ensuring Fabory delivers advanced and consistent excellence in service.

Seventy years ago Mr J.M. Borstlap and his sons started their fastener distribution business in Scheveningen, on the Netherlands coast. Outgrowing several locations the company settled in Tilburg in 1968, adopting the strapline ‘Masters in Fasteners’. The last family member active in the business, John Borstlap, left in 1999. From 2004 through to 2011, the company was equity investor owned, and in 2006 it adopted the name by which most of its products are immediately recognised: Fabory.

On 1^st September 2011, Fabory became part of Grainger Inc, a Fortune 500 company recognised as North America’s leading broad line maintenance, repairs and operations (MRO) supplier, with expanding operations in Europe, Asia and Latin America. In 2016 Grainger achieved global revenues of US$10.1 billion (approximately €9.5 billion).

Ronald Baarslag believes there were two major attractions in acquiring Fabory: “Grainger saw potential in the fastener industry and in the opportunity to establish a footprint in Europe.”

“With a consistent record, supplying a huge range of quality assured fasteners, Fabory could help to develop Grainger’s fastener knowledge. One of our important contributions has been in establishing Fastener House, which now sources all fasteners for all the companies in the Grainger group of businesses.”

“Fabory benefits through the accumulated volume and also in further extending our knowledge. We are able to leverage Grainger’s great supplier relationships, access more sources and obtain the right conditions of trading. In turn this delivers tangible benefits to our customers, in terms of both improved availability and service, as well as better pricing.”

Ronald Baarslag is emphatic that fasteners will continue at the heart of the Fabory business: “We are developing more and more strongly as the one stop shop for fasteners and fastener related products and solutions, supported in all kinds of ways by Grainger.”

“Many people recognise Grainger as a US$10 billion corporation. Fewer are aware it is the eleventh largest e-retailer in the United States, transacting approximately 50% of its business online today. That enormous depth of online expertise has been vital in supporting Fabory to develop and deliver an exceptional online experience for
its customers.”

Everybody, Ronald Baarslag acknowledges, has a web shop these days, “but with Grainger support, and using the power and interconnectivity of an SAP platform, we are able to implement it faster and better, offering our customers benefits such as personal shopping cart and budgets, as well as providing all kinds of integration with their own systems”.

While Grainger’s financial muscle clearly underpins Fabory’s development, Ronald Baarslag perceives less obvious but equally beneficial influences. “Grainger helped us to focus even more acutely on our customers.” It is another key strategy pillar, inherently recognising that customer behaviours and expectations constantly and dramatically shift. “Fabory has a long heritage of supporting its customers but when I joined in 2013 there were definitely opportunities to improve.”

Many talk, says Ronald Baarslag, about delivering unique value to different customers and to providing an effortless customer experience. “The real skill is translating that into reality. That starts with having the customer at the centre of all we do. We talk with and about our customers all the time. In everything we do, each decision step, the customers’ position is taken into consideration.”

It also demands the implementation of standard, scalable practices throughout the company. “We look at all our processes, examine their design, and we standardise them. Then we implement them using our SAP system, in all Fabory operations across the world.”

“Once that scalable process is established and implemented correctly, efficiency is created in one area but more importantly, ensures all our global customers have the same experience, wherever they interface with Fabory. As never before that matters today: International customers need to know they will receive the same excellence in support from Fabory wherever they operate.

The Tilburg central warehouse and logistics operation holds inventory of more than 120,000 products as well as being at the heart of the company’s quality assurance system, centred on its A2LA accredited laboratory. “Our total offer is more than 200,000 items, and we supply all our customers in the Netherlands, Belgium and France from Tilburg within twenty-four hours. We also supply our shops and other European warehouses from Tilburg.” Another benefit from Grainger’s logistical experience has been Fabory’s ability to develop cross-docking systems, through which non-stock product can be supplied direct to customers to service standards similar to those provided by Tilburg.

Fabory has more than seventy owned shops. Just over half are located in the Netherlands and Belgium, with others in France, Portugal and some central European countries. “It is no secret,” says Ronald Baarslag, “that we closed a number of our shops.

We examined their footprint a couple of years ago, recognising that more and more business was shifting online. That is a general trend and like any prudent and alert business we evaluate all our investments on a regular basis. That means looking critically at what is happening in the market and seeing how our customers’ purchasing behaviours are changing”.

“The remaining shops continue to have a very important role. They are part of our omni-channel strategy and very relevant to many customers. Last year we developed further integration so that orders placed online can be collected locally from a Fabory shop.”

“However, we recognised that in some country markets there are very large distances and low densities of population so a shop is not the best answer. In these cases we offer a range of alternative channels to enjoy the benefits of trading with Fabory. These include online, telesales, our KeepStock logistics solutions, and in some cases a local seller.”

Online transactions are shipped from Tilburg and from Fabory’s other major warehouse in Brno, Czech Republic, which supplies many customers in Romania, the Czech Republic, Slovakia, Hungary and Poland on a twenty-four hour service.

“Fabory has three main kinds of customer. We have strong, close relationships with OEMs to meet their requirements for high volumes of specific, quality assured fasteners and solutions. Central to these relationships is an in-depth analysis of the customer’s total cost of ownership. Competitive pricing is simply a necessity. The real differentiation comes from how we ensure quality and how we help improve their logistics and procurement process. Online integration is more and more important, increasing accuracy and reliability as well as reducing transactional costs. Our KeepStock® solutions ensure the correct fasteners and other C-parts are always available at the point of consumption. Having implemented a reliable, productive concept we recognise that the mix of the relationship will change over time, so we are constantly alert to that, reviewing regularly and adapting to changing conditions. In some cases we go further and assist our customers in forecasting future trends.”

The other major customer segment for Fabory is MRO. “Our mother company is a leader in general MRO supply, with sixteen product categories and more than 1.5 million lines. Fabory concentrates on everything around fasteners – the fasteners themselves, the tools, the metalworking items, the safety and protective products. In general we provide a good, better, best offering. Alongside the Fabory brand we have strong partnerships with leading European brands, such as Nord-Lock and ABA®, and exclusive brands like Maxxfast, which provides quality assured, no-nonsense professional hardware.”

“The smaller but still important sector for Fabory is trade business. The structure of fastener distribution differs from country to country. In the UK we have a successful business that concentrates on supplying other fastener distributors supported by the range, availability and logistical efficiency here in Tilburg. In all countries we have some trade customers that similarly gain advantage from what Fabory provides. Those relationships are built on mutual respect for ethical behaviour and compliance. If you are an honest entrepreneur you will enjoy business with Fabory.”

“Quality is not just about our A2LA laboratory,” explains Ronald Baarslag, “although there is no question its facilities and the expertise in our customer technology support centre are distinctive. It is also about how we source our products from quality vendors, the control systems we employ for the goods received and stored in our warehouses, the traceability in case of an issue. In the end, though, quality is a state of mind and it is really about the people. Their expertise and long-term personal commitment to Fabory is crucially important”.

“Through all of our sales channels it is the total experience that matters – when one of our sales people visits, when the customer comes to one of our shops, when they call us or we call them, when they choose to go online, when they are supported by our KeepStock programme. We are committed to delivering unique value to different customers – because we never forget that they have a choice.”

“Looking forward, I will be really proud when our customers recognise Fabory as the number one, one stop shop for fasteners, fastener related products and solutions. Achieving that is about doing the things we do today, doing them extremely well and striving to add more value to our customers every day.”

“It may not sound very heroic but doing the simple things really, really well and making sure that every decision you make has the customers’ interests at its centre, that is really not so easy. We are working very hard at it: Never before have I been in a company populated with so many hard working and loyal people.”

“Change has always been here, and always will be. The important thing is to stay really close to your customer, listen to them, understand where they are going and what they require from you. Some of our customers are very clear about where they are going, some are less certain, but by having these conversations we get a better view.”

“It’s about looking from the outside in – seeing what the customer sees but also being alert to what the rest of the industry is seeing, what other industries are doing, and how that will influence our industry and business.”