In a tighter economy, a manufacturer fastens down its logistics

They nailed it: Servalite president Tom Rowe hangs his company’s reputation on fast, reliable delivery by UPS.

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You may never have heard of Servalite, but chances are you have one of its more than 40,000 products in your home. The East Moline, Ill., company manufactures a comprehensive line of fasteners, including nuts, washers, carriage bolts, lag bolts and picture hangers.

In 1979, Tom and Mary Jennifer Rowe began selling miniature light bulbs, such as those used in flashlights. Nine years later, the Rowes bought a fastener company. Gradually, they drove the 250-employee company to the No. 2 position in the repair and replacement industry.

"You can ramble into any hardware store and find something from us," says Tom Rowe, president of Servalite. “Sooner or later, everybody uses our products, whether it's hanging a picture on the wall or putting in a screw to tighten a loose board on a deck.”
 
Servalite's products and displays can be found in thousands of mom-and-pop hardware stores and larger home improvement stores.

UPS has become a key partner in Servalite's growth. "Servalite's image among our customers is that we're the best in the industry," says Rowe. "We provide them with the best service and best products. UPS is an extension of that."

Faster and cheaper
UPS has done more than deliver the goods. It has helped Servalite dramatically change its logistics.

Rowe's goal is to get packages to retailers within two days. For customers on the East Coast, Servalite had accomplished this from its a Pennsylvania warehouse. UPS, however, showed Rowe how he could provide the same service from the Illinois location and eliminate the expense and hassle of operating the Pennsylvania warehouse.

Servalite's freight was originally sorted in East Moline at night and then distributed through the UPS network. Rowe said UPS cut a day out of service by hauling the freight to Chicago in the evening and sorting it there before shipping. The new logistics plan enabled Servalite to guarantee two-day delivery east of the Mississippi.

Exclusive deal
In the first quarter of 2007, UPS became Servalite's exclusive shipper of small packages containing fasteners.

Joe Mitchell, UPS senior account manager, said that after UPS had proved its capabilities to Servalite, it took a look at the company's freight business. "Using a month's worth of data, we were able to propose ways that improve time in transit and reduce costs using the small-package and freight networks," Mitchell says.

According to Mitchell, UPS regularly helps customers utilize its network efficiently: "It is becoming common practice given the economic times we're in."

In addition to cutting a day off shipping and reducing freight costs, Rowe said the UPS plan enabled him to reduce his inventory. UPS has become an integral part of the operation, shipping 800 to 1,100 packages a day, according to Rowe. But he's most impressed by the hands-on involvement of UPS's drivers.

"Everybody is personable and caring," says Rowe. "They do a great job."

This story was originally published under the headline "Locking up savings" in the winter 2009 print edition of Compass.