Case Study:

TURNING OVERSIZED STOCK INTO RIGHT-SIZED EFFICIENCY

How a Power Distribution OEM Cut Costs, Improved Safety and Streamlined Fastener Supply

Years of unmanaged material flow left a power distribution OEM with disorganized fasteners, crowded floor space and safety risks. With more than a million dollars tied up in on-hand inventory and no clear processes or tracking, the plant needed a better way to keep production moving.

A leaner, standardized inventory model not only provided control – it reduced costs and complexity across multiple stages of the operation.

Partner Overview

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Industry

OEM – Power
Distribution
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Location

United States
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Program

Vendor-Managed
Inventory (VMI)
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Program Fastener Scope

 ~300 C-Class
Fastener SKUs
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From ~$1.1M
in On-Hand Inventory to $180K

Results That Show Up
on the Floor

By partnering with Birmingham Fastener, the OEM implemented a structured VMI program that reduced on-hand inventory, reclaimed floor space and simplified purchasing while improving safety and quality.

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Challenge

Disorganized Material Flow and Safety Concerns

The OEM’s fastener management relied on habits rather than process. Parts arrived in receiving without a clear system for identification, labeling or storage. Fasteners were stacked on shelves, scattered in assembly areas and often ended up on the floor – creating both safety and quality risks.

Solution

Disorganized Material Flow and Safety Concerns

We started with a detailed value stream map of the customer’s material flow – walking every step of the process to understand how fasteners moved through the plant. From there, we created a line-side VMI layout that brought structure to all storage locations. Racking and totes were set up near the point of use, each position was clearly labeled and every container was barcoded.

Instead of digging through racks or picking parts off the floor, assemblers could pull from clean, organized shelves that are replenished on a defined schedule. The system also created a safer, more efficient assembly environment where fasteners maintain their integrity and production teams no longer waste time searching for the right parts.

Challenge

Excess On-Hand Inventory Tying Up Capital and Floor Space

To compensate for lack of inventory control, the OEM continually ordered fasteners in bulk without knowing current stock levels or usage. Across ~300 SKUs, the company carried close to $1.1 million in on-hand fastener inventory. Shelves and pallets covered ~2,500 square feet of manufacturing floor space that couldn’t be used for value-added work.

Solution

Right-Size Inventory and Increase Turns

In a detailed consumption assessment, we provided a breakdown of the fasteners needed for each product, then scaled that data across production volumes. This provided a clear picture of what the plant actually needed to support day-to-day work.

Our team adjusted stock levels to match usage, giving the company a controlled, dependable flow of material without relying on oversized inventory to stay ahead. Right-sized supply and accurate usage data ensured new containers were replaced at the point of use on time, every time – creating a lean, efficient program.

Challenge

High Transactional Burden and Limited Visibility

Managing fasteners required constant administrative effort. The OEM placed weekly purchase orders with multiple suppliers, coordinated freight, handled receiving and inspection, and tried to keep up with products on the shelf. The team had little insight on spend, usage or inventory needs despite spending significant time managing C-class components.

Solution

Consolidate Vendor Supply and Deliver Clear Reporting

We consolidated all fasteners in scope under a single VMI program that renews annually, allowing the OEM to work from one master order while we handle sourcing, logistics, quality control and replenishment. To make the transition seamless, we also absorbed the customer’s existing commitments with another supplier, buying that inventory and managing it separately until it was fully consumed.

The shift removed most of the OEM’s administrative work and offered access to better piece prices through our domestic and import network. Throughout the engagement, detailed reporting tracked monthly spend, line-specific consumption, trends and performance metrics, giving the team a complete view of fastener data.

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The Metrics Behind Inventory
Management Efficiency

With Birmingham Fastener as its VMI partner, this power distribution OEM now runs a cleaner, leaner operation with lower costs and greater visibility.

~$300,000

IN ANNUAL TRANSACTIONAL COST SAVINGS

4x

MORE INVENTORY TURNS

~2,500

SQUARE FEET OF MANUFACTURING SPACE RECLAIMED

~300

SKUS CONSOLIDATED UNDER ONE PROGRAM

~98%

AVERAGE DELIVERY PPM

~100%

AVERAGE QUALITY PPM
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Confident in Your Fastener Supply

Reduce costs, save time and boost efficiency with Birmingham Fastener’s VMI program.

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