Fastenal Inc., Winona, MN, the publicly held industrial distributor, offered quite a bit of insight into the growth of its industrial vending machine program in its 4Q 2020 financial statement. The company will be ramping up the installation of industrial vending machines loaded with the MRO products it distributes at customers facilities, according to a Jan. 20 press release.
Fastenal said in the release, “We signed 16,417 industrial vending devices during 2020, including 3,456 devices during the fourth quarter of 2020. Our installed device count on Dec. 31, 2020 was 95,733, an increase of +6.4% over Dec. 31, 2019. Daily sales through our vending devices increased at a low-to-mid single-digit pace in the fourth quarter of 2020 over the fourth quarter of 2019. Our higher installed base was partly offset by reduced device throughput owing to the soft economic activity in the period. Device counts do not include slightly more than 15,000 vending devices deployed as part of our lease locker program.”
The company also offered a glimpse of its new FAST Bin technology, which is a family of “smart bins” based on scale, infrared or RFID technologies. “Our industry has long utilized bin clusters, which we call FAST Stock, close to the point of use within a customer location, providing a measure of convenience and efficiency in dispensing fasteners and other products,” the company said in the press release. “However, maintaining these systems requires significant manual effort to ensure sufficient supply and timely replenishment. FAST Bin, in contrast to FAST Stock, is a set of electronic inventory management solutions that automate process controls by providing 24/7 continuous inventory monitoring, real-time inventory visibility, and more efficient replenishment that makes customers, and our own operations, more productive.
“As such, FAST Bin can improve supply chain visibility for a broader range of products, complementing vending. We view industrial vending and FAST Bin, along with FAST Stock, to be part of a suite of tools (called ‘Fastenal Managed Inventory’, or FMI) that together provide Fastenal with the ability to better and more visibly manage our customers’ product consumption and fulfillment.
“We signed 223 new onsite locations (defined as dedicated sales and service provided from within, or in close proximity to, the customer’s facility) during 2020. This included 85 signings in the first quarter of 2020, 40 signings in the second quarter of 2020, 62 signings in the third quarter of 2020, and 36 signings in the fourth quarter of 2020.
“We believe the pandemic adversely affected our ability to generate signings, particularly during the second and fourth quarters of 2020 when COVID-related impacts were greatest, as key decisionmakers at our customers were focused more on short-term crisis management than long-term strategic planning. We had 1,265 active sites on Dec. 31, 2020, which represented an increase of +13.6% from Dec. 31, 2019. Daily sales through our onsite locations, excluding sales transferred from branches to new onsites, increased at a low single-digit rate in the fourth quarter of 2020 over the fourth quarter of 2019. This resumption of growth reflects increasing sales in our relatively new active locations as implementations progress, combined with moderating rates of contraction in our more mature sites. Our goal for onsite signings in 2021 is 375 to 400, though achieving this range will likely require some normalization in the business environment that allows customers to prioritize long-term strategic decision-making over short-term crisis management.”
Daily sales to Fastenal’s national account customers (customer accounts with a multi-site contract) grew +7.8% in the fourth quarter of 2020 over the fourth quarter of 2019. Revenues attributable to national account customers represented +55.9% of Fastenal’s total revenues in the period.