Fastener Industry
U.S. OEMs use more than $6.3 billion of industrial fasteners annually. The primary users are the automotive, aerospace/defense, electronics, and commercial industries. The state of the fastener industry closely follows the U.S. economy in general, and the respective niches specifically. The trend in the industry is expected to be strong - growing about 3.7% annually - reaching over $9.1 billion in 2007.
Fastener Sources
Domestic manufacturers supply 66% of the fasteners used in the U.S. Taiwan is the dominant overseas source, supplying more than half of the imported fasteners. Canada, Japan, China, and Korea are other major sources.
Fastener Classifications
Industrial fasteners are generally classified as standards, specials, or proprietary designs. Standard fasteners are typically cold-headed threaded parts like nuts, bolts, and screws, as well as stamped washers, rivets, machined pins, spacers, and standoffs. Most of the standard specifications are pulled together in the commercial fastener "bible", the IFI, published in two volumes by the Industrial Fastener Institute. Although domestic manufacturers are tooled to produce these parts, most standard fasteners used in the U.S. are manufactured in high volumes overseas because of lower costs.
Special fasteners are often based on standard designs, but may incorporate non-standard tolerances, pitch and diameter combinations, drives, lengths, etc. They may be formed from unusual alloys or require separate secondary operations such as drilling or punching.
Specials are supplied by both domestic and overseas manufacturers.
Proprietary designs include nuts, bolts, screws, and other standard-type fasteners that incorporate patented designs for threads, drive types, head types, locking devices, points, etc. Metal and plastic clips, inserts, caps, clamps, plugs, are also considered proprietary. Some of these designs are licensed to several manufacturers, both here and overseas. However, most are closely held by the originating manufacturer until the patent expires.
Certain markets have developed their own specific standards as well. For example, the Defense Department utilizes MS (Military Standard), and AN (Air Force - Navy Aeronautical Standard) specifications, administered by the U.S. Government. The commercial aerospace industry uses the industry-controlled NAS (National Aeronautical Standard).
Fastener Supply Channels
The basic flow of parts is:
While some manufacturers supply parts directly to the customer, particularly on high volume specials or proprietary parts, most fasteners are supplied through distributors. No single manufacturer can produce every type of fastener required by the typical OEM for the assembly and service of its products. Hence, fastener distributors have emerged over the last fifty years to consolidate the technical expertise and streamline the procurement process for customers while leveraging sales and marketing efforts for the manufacturers.
More than 4,000 distributors supply fasteners to OEMs nationwide. About 800 of these deal in fasteners exclusively. Virtually all of these distributors are local or regional suppliers offering access to a "full line" of fastener products to OEMs. The typical distributor volume is $3 to 6 million. Some distributors cater to a specific industry, like aerospace, while others concentrate on certain proprietary product lines. MRO distributors focus on the facility maintenance market.
Marketplace Requirements
Because the unit cost of fasteners is very low relative to the administrative and overhead costs to manage the supply of fasteners to the assembly line, OEMs have sought to reduce their total cost of purchasing and handling fasteners by shifting inventory, inspection, and engineering burdens to their distributors. As a result, distributors need to develop world-class capabilities to take over these functions efficiently. In many cases, the entire scheduling and inventory control process becomes vendor-managed.
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