How a Strategic Partnership Can Help You Streamline Your Operation

How a Strategic Partnership Can Help You Streamline Your Operation

By Doug Mensendiek | Fastenal

If you aren’t focused on the total cost of ownership (TCO), you can bet your competitors are.

Indirect costs make up much more of the full price of common items than you might think. That’s why it’s important to think about how TCO is bigger than just piece price. Consider everything from freight to disposal, and you start to see the full picture of just how much something is eating into your budget.

So, how can you minimize these costs? Look for a strategic partner who can help you find cost-saving opportunities.

1 - We can work together to create competitive advantages for you.

You’re currently producing 100 units a day. How would you like to bump that up to 110 just by adjusting your cutting tools? Our metalworking team can offer those types of productivity boosts.

2 - Let’s develop a common understanding of TCO.

You’ve read the term TCO four times now, but unless you’ve thought about it for years, maybe focus on just this thought. TCO includes anything that affects the price you pay.

Direct Costs

Each of these offers ways to save money.

• Reduce your on-hand inventory

• Cut back on product consumption

• Boost productivity by freeing up employees

• Product substitutions for equal quality at a lower cost

• Standardize the products that are used (reduce the number of SKUs)

• Rely on Fastenal’s logistics

• Piece price reduction based off the last price paid

Indirect Costs

These are areas where you could take back time.

• Reduce the number of POs you send

• Access to free training seminars

• Reduce the number of vendors you work with

• Use value-added services like engineering and metalworking experts

• Shift inventory management to Fastenal and save time

• Invest in items that won’t become dead inventory

3 - Now, identify where to reduce TCO.

As the saying goes, knowing is only half the battle. Once you recognize what to target, let’s say decreasing expenses, then we can act on it together by attacking your freight, product consumption, and inventory management.

For a partner to truly be strategic, they need to make you more profitable and productive. This is the kind of partnership that you can build and push in the direction that needs the most attention in your organization.

And as a supply chain partner, Fastenal is right there with you, every step of the way. In short, if you want to increase revenue and decrease inventory, reach out to us and we can get started.