After 30 years in business, Atlantic Fasteners has plenty to celebrate. Reflecting on the company’s 30-year transformation from a business on the brink to distinguished national supplier could be reason enough. However, the company will mark the anniversary by looking forward rather than back to recognize other important milestones that convey Atlantic’s promising future and lasting worth.
Strategy for Success
In 1981, Pat O’Toole was an executive intent on using his Harvard MBA and big-company strategies to breathe new life into small, entrepreneurial ventures. He bought Atlantic Fasteners, then a small industrial supply company with a horrible reputation, disgruntled customers, inferior products and its second bankruptcy close at hand. Today this “small venture” commands $13 million in yearly sales and has an aerospace division that has been growing, despite recession, at an annual compounded rate of 27%.
President Tony Peterson attributes much of the company’s current strength and future potential to O’Toole’s consistent adherence to sound strategies. O’Toole’s early commitment to differentiation and specialization sparked the creation of systems that still drive the company’s growth. Atlantic’s 30th anniversary coincides with three key milestones instrumental to the company’s success:
- 25th anniversary of service guarantees
- 7th anniversary of Atlantic Fasteners’ Aerospace
- 5-year anniversary of 100% employee ownership
If it’s Important, Guarantee it
Atlantic Fasteners’ early service guarantees have truly distinguished the company in a segment where few such assurances exist, even today. While guarantees are ubiquitous in the consumer market, few industrial companies have the confidence to use them boldly and without conditional fine print, if at all.
In 1986, Atlantic’s first guarantee of next-day delivery, backed by the promise of a $50 credit, demonstrated the company’s expertise in inventory management and efficient same-day order processing. Atlantic now offers six guarantees and promises $100 credits.
It’s proven to be an effective – and inexpensive – differentiator. Last year, only 19 orders out of 45,919 failed to meet the company’s highest standards exactly as promised. Those 19 customers received credits without ever asking.
When Quality Takes Flight
Atlantic Fasteners’ competence in documenting every aspect of its service was instrumental in the creation of its aerospace division, which moved to new quarters in West Springfield in 2010 and also maintains sales offices in Maine and Missouri.
Like the company overall, the division is distinguished by higher-than-average performance, which is tracked within the industry as Defense Logistics Agency (DLA) scores. Atlantic Fasteners Aerospace also has received service awards from defense industry and aerospace customers, including a prestigious Lockheed Martin STAR Supplier Award.
A recent new contract with a Chicago-based aerospace supplier also expanded the division’s offerings by bringing Atlantic’s trademark barcode-based vendor inventory management (VMI) program to the aerospace industry. This first contract gives Atlantic Fasteners Aerospace the responsibility for managing more than 680 aircraft parts.
In response to the division’s growing demand and visibility, Atlantic recently launched AFaero.com to further support their aviation and aerospace customers.
Employees Make Excellent Owners
As majority owner, O’Toole had the foresight to help Peterson convert the company to employee ownership well in advance of his retirement. This was accomplished in late 2005 through an Employee Stock Ownership Plan (ESOP), an ownership structure with a good track record for increasing staff productivity and company stability.
“I watched a lot of my friends sell out to these ‘rollups’ and conglomerates,” O’Toole says today. “In every case, it decimated the business.” He chose instead to preserve independent, local ownership.
“Employees make good owners,” he said. “This has added to the stability and competitiveness of our company. I think many company owners feel this is something they can’t afford. But we were pleasantly surprised at how smoothly we could accomplish it to everyone’s benefit.”
The ESOP structure has been good not only for business, but for employees. Some have built up substantial ownership value, giving employees the same bright future prospects that Peterson sees on the horizon for Atlantic Fasteners. Sales for the anniversary year are already ahead of last year.