Fastenal Case Essay

The comprehensive memorandum is an overview of Fastenal Canada LTD and how it relates to sales get offment.The document first provides an submission to the paradox and company background of Fastenal, which includes a description of various views of Fastenal. It however goes into detail ab a way the recommendations that relates to the two main parties involved, which atomic look 18 the nodes and the company itself.The document overly includes an in-depth implementation object, which is broken down into short, medium, and long-term tasks to accomplish. finished out the document there is a mention of the vendor managed parentage example (VMI). By using VMI, we were able to use a different cuddle to head off risks associated with the bricks and mortar overture. Fastenal should choose to implement the following business image because a well thought out analysis went into determining the problem and coming up with a solution for the future harvest-feast of the company. c ompletely decisions were made with the company in mind and focusing on the infrangible relationship between the costumer and Fastenal.IntroductionFastenal Canada LTD is a subsidiary of Fastenal Company, which was founded in 1967. Fastenal Canada LTD operates as a wholesaler and retailer of industrial and construction supplies in Canada. They have over 200 stores crossways Canada, 66 of which argon in the western region. Fastenals growth strategy has always relied heavily on new store source because the high demand for its products and suffices across Canada (Fastenal, 2012).It tends to be risky as well as costly when opening stores using the bricks and mortar approach. The introduction of the vendor managed inventory personate (VMI) has been advantageous. Fastenal receives an electronic data via email, informing them of its distributor sales and inventory stock direct. This remains makes it fast and efficient for the customers and sales associates. Fastenal interprets the ele ctronic data and there is an impulsive region of maintaining the inventory level for the customer. Fastenal is looking for a different expanding upon present approach to be used as a growth driver in Western Canada. Our new proposed strategy gives Fastenal the ability non only maintains its desired identity but it gives them the ability to increase the trade share and hit into a fresh new market. Our goal is to quantify the situation in hand and work in the devoted environs to keep the strong customer relationships since it is an important comp singlent in the company. fuss DefinitionHow can Fastenal use its new vendor managed inventory model to increase its market share?End market sales during the months of 2012 grew 19.8% from the manufacturing customers sequence the residential construction customers grew 17.9% (Fastenal, 2012). The advantage to VMI is that it releases the customer of having to worry about the level of their inventories. Fastenal interpret the elect ronic data and automatic take control of the responsibility of maintaining the inventory level for the customer.How can Fastenal reduce fiscal risk? both scenario where there is a change in the way things are do or achieved there is always risks to failure or loss. In many a(prenominal) cases where there is loss or failure, there is often a way that it could have been avoided or done differently to avoid the negative outcome. Fastenal call for to avoid these situations by planning ahead and finding ways to avoid the risks that may pose problems or loss in the near future. Bricks and mortar approach induces many financial risks so an otherwise approach is demand to prevent them.Situation AnalysisCustomers and the sales force are the stakeholders who are most affected. Strong customer relationships are the bosom of Fastenals winner and form an important component of their emulous advantage.The problem arises due the to leave out of education the customer has about ordering onli ne which deceases the efficiency PartStore has to offer. Ordering online reduces go the parts to the counter or waiting on the phone. Customers are also able to check parts availability and prices, as well as dedicate an order. However when PartStore was introduced there was close to confusion with it. Creating a foil relationship between the customer and sales person. Recommendations allegiance InventoryConsignment inventory usually involves the supplier, placing inventory at a customers fix without getting rid of its ownership of the inventory. Since the owner retains the ownership of its products the customer does not pay until it is sold or used. However, before we examine how Fastenal can benefit from our proposed consignment program it is important to first examine some potentiality market of interest.The City of EdmontonAccording Edmontons 2012 budget report, some all municipalities across Canada face a significant infrastructure deficit. vicinity renewal occurred per iodically with funding from other orders of government, yet it failed to address the upright life-cycle requirements of preventative maintenance, rehabilitation, and reconstruction. Over time, the condition of roads, sidewalks and sewers deteriorated, resulting in more frequent collapsed sewers, increase sidewalk hazards, and dramatically increased maintenance like pothole fastenings. The position of Infrastructure and Funding Strategy highlighted the need for on red ink funding for neighbourhood infrastructure to overcome an anticipated $2.2 billion funding gap in neighborhood roads and related infrastructure. This situation provides a tremendous fortune for Fastenal to penetrate and serve this market.Market potentialThe total number of potential infrastructure that needs to be fixed in any given time is the market. The market potential for Fastenal products in units would be equal to the number of potential infrastructure that require repairing, assuming that each infrastructu re repair would use Fastenal product.Fastenal can benefit for inventory consignment within the city of Edmonton, however administration is important to understand how the current business model can be used to Fastenals advantage in delivering the services. degenerate 5000 is a vending motorcar that provides workers with immediate access to materials and equipments. The FAST 5000 machine is installed at customer sites and Fastenal keeps them filled with needed products ranging from safety equipments, cutting tools & supplies to office supplies.Fastenal handles everything from the delivery of the machines to the installation and restocking of the machine whenever the inventory level becomes low. Through the conciliatory web reporting system Fastenal customers are able to view and manage the machines inventory usage. Cory Jansen, Fastenals Vice President of infixed Operation have claims that having the FAST 5000 have reduced production ingestion in many cases by more than 30 perc ent (City of Edmonton, 2012).In the midst of 2.2 billion dollar worth of infrastructure repairs that the city of Edmonton needs, psyche allow for have to supplies this market with their required materials and tools to complete the repair work. Fastenal should approach the city of Edmonton with a proposition outlining how the FAST 5000 can be estimable to the construction site and within the city offices.The city of Edmonton as a raft serves a population of more than 750,000 residents the corporation is segmented into seven-spot different surgical incisions each department is responsible for providing a particular service to Edmonton residents. We suggest that Fastenal concentrate on the four main departments within the corporation that is more likely to benefit from the FAST 5000 or the FAST 3000 services, which are the percentage of the City Manager, Sustainable Development, Transportation Services and Infrastructure Services.Office of the City Manager will benefit from the FAST 5000 if Fastenal stocks them with office supplies, such as pens, pencils, papers, etc. Since each development must akin to a strict budget the FAST 5000 can provide the solutions to maintaining those budget, by decrease product consumption, having on-hand inventory, and administration cost, while providing new insight into usage and consumption habit that can be used toward abutting years City budget.Fastenal can implement the same strategy within other municipalities across Canada. ImplementationFastenal needs to place a unit in each site under the City of Edmonton. We believe it to be credible to set one to lead year goal to place a FAST 5000 machine in each site over the next three years. First step is to write up a end to bring to the Simon Farbrother, who must approve it. He is the city manager and makes the study decisions in these cases. This process can take up to three months to be able to present the proposal. This also creates awareness of the product to the p otential client. The proposal must go through other levels of approval and be voted on by the city council, therefore this may take another three months.Once the plan is approved the production and distribution can be put into motion. The city of Edmonton has many different branches and sites in the Edmonton area. The market department in Fastenal will start to put together the proposal and presentation. The marketing department will create a miniature FAST 5000 as part of a press kit along with a evening gown written proposal. The press kit will also open up and contain testimonials from previous clients Fastenal has worked with. It will also have a drawing description of the key factors and attributes of the FAST 5000 and what sets it apart from prior units.Once the plan is approved, Fastenal will be required to submit the bet to the city manager. Since Fastenal is the repair provider of the vendor managed inventory systems (FAST 5000, FAST 3000). This implies that there is on ly one supplier that can fulfill the requirement and that any attempt to accomplish gamings would only result in one supplies being able to bid on the contract which is Fastenal. The bid will contain the benefits and costs of going through with the deal and the estimated completion date of placing the units in different sites end-to-end Edmonton.Once the city has awarded them the contract they will immediately move forward, and Fastenal will provide the services as stated in the proposal. Fastenal will place the minimum required machines in each site as describe by the contract.Time LineImmediately Delivering unitsWeek 1 Submitting a bidWeek 2 Proposal3 months Meeting with Simon Farbrother 3 months Vote by city council6 months Full ApprovalTBA magnification into further sites and marketsBudgetSince we do not have any costs that are being associated with this project our cost is zero, therefore the budget is not present.Risk and mitigationRisk MitigationUnderperformance of sales force * fill on a skilled team * Have the team learn new people * Make teamwork part of the culture * Hire safe and enthusiastic employees Sales loss on FAST machines * Proper rearing * Information to customer about store * Finding good location Unrealistic customer and schedule expectations * Make the customer feel satisfied and at ease * Set schedule goals around frequent deliveries inductionThe problems we wanted to address were How can Fastenal use its new vendor managed inventory model to increase its market share? and How can Fastenal reduce financial risk? Our new proposed strategy gives Fastenal the ability to not only maintains its desired identity but it gives them the ability to increase its market share and tap into a fresh new market. Strong customer relationships are the essence of Fastenals success and have formed an important part of their competitive advantage. Our business purposed plan intended to keep the strong customer relationships. Through our implem entation approach we have demonstrated how Fastenal can transform its current solution into a continued transparent business model. Fastenals opportunities will be awarded by the skill and creativity they have to graceful the customer demands.ReferenceCity of Edmonton. (2012). Budget. Retrieved April 2012, from http//www.edmonton.ca/city_government/budget_taxes/budget-2012.aspxFastenal. (2012). Fastenal . Retrieved April 2012, from http//www.fastenal.comMackenzie, H. (. (2008). Sales Managment in Canada (1st Edition ed.). (D. Thompson, Ed.) Toronto, Ontario, Canada individual Prentice Hall.