A source of pride at fastener and MRO supply chain distributor Würth is its ability to be nimble and quick in all areas of company operation. The characteristics have come in handy during COVID-19, as market and operating conditions continue to change. CEO Dan Hill recalls how his father used to remind him that proper preparation prevents poor performance, and that philosophy has also contributed to the company’s ability to remain strong in 2020.
“With the COVID-19 disruption, we became more of a one-stop shop for our customers. We found we went from one of the people that they call to the first person they call,” says Eric Wilk, VP, East Region for Würth in North America.
No. 18 on MDM’s 2020 Market Leaders listing of the top distribution firms in the U.S., Würth spent a large portion of the last two years since Hill joined as CEO focused on business transformation, transitioning from seven different ERPs down to two, investing in 3D printing capabilities, and creating an overall more entrepreneurial, connected system among its 110 locations across the U.S., Canada, Mexico and Brazil.
“We embarked on an aggressive business transformation plan and it resulted in a far flatter organization and more connected organization, which allowed us to be incredibly nimble and entrepreneurial during the pandemic,” Hill says.
The company’s goal has been to double in size by 2025, through organic growth driven by innovation and supply chain solutions with existing customers, and through strategic acquisitions. Right now, business is roughly flat to slightly up from 2019, according to Hill. Planning phases in 2019, such as investing millions of dollars into state-of-the-art distribution facilities in Minneapolis and Indianapolis, have “brought Würth into a great spot for 2020,” he says.
The company has added more than $75 million worth of new signed contracts this year, and Hill anticipates that number will end up around $125-$130 million by the end of this year. “Adjusting to COVID-19, what would have taken us 12 months, we are now able to get done in three months just because of the necessity of the environment,” says Becky McMorrow, who joined Würth just over a year ago as VP of marketing & business transformation. “Looking at a lot of our digitalization efforts, we definitely have moved more quickly just because we need to find new ways to reach our customers. Because we can’t just set up appointments and you know, walk in the door and say hi anymore. We need things planned out. We need video streaming. We need more data. General marketing efforts to expand our brand reach. So there has definitely been a hyper focus and rush to get things done more quickly.”
With aggressive safety and health protocol plans in place, Würth has kept more than 100 locations up and running throughout the pandemic.
Würth has more than 78,000 employees, but is a relatively small name in the U.S. When Hill joined the company in 2018, one of his first priorities was to build the brand and invest heavily in digital marketing, transforming the Würth team into brand champions. In the last 12 months, the company has more than doubled its social media followers, contributing to a high level of team engagement and brand pride, he says. “Any time you can accelerate brand and culture, that leads to the ability to be able to recruit and retain top talent in the organization,” he adds.
Within McMorrow’s first six months, Würth set up a centralized corporate marketing team and supplier marketing team, and invested in brand building and digital marketing efforts. “I’m really happy with the progress we’ve made,” she says.
While many others were conducting layoffs and/or implementing a headcount freeze, Würth has looked at this pandemic time frame as an opportunity acquire new talent. As a manager, McMorrow says she is focused on building young talent within the organization. Although it can be a challenge to hire and onboard remotely, Würth is still finding ways to connect with new employees so that mangers can get some face to face time, be it outside for coffee or lunch at a safe distance. Her young marketing team, together for six months with some right out of college, is all remote in different locations. To stay connected, they have a weekly discussion centered around a common theme to get to know each other better. “We need to continue to invest in new young talent, especially with an older workforce,” says McMorrow.
Supply Chain Innovation
Würth continues to invest in supply chain innovations. “If you’re not trying to look around the corner and see what next big opportunity lies ahead, especially in our in our neck of the woods, you can get lapped quickly,” says Hill.
A high point of 2019 was signing a national distributor agreement with Markforged 3D printing technology — “revolutionizing the supply chain solutions for OEMs,” he adds.
Würth started using 3D printing additive manufacturing about three years ago, says AJ Strandquist, director of 3D product solutions. The process started with basic prototyping for customers and quickly transformed to making custom, value-add tools. On April 1 the partnership with Markforged went public, and Würth launched its 3D printing division. Due to the timing with COVID-19, it’s been a very interesting start, says Strandquist, as engineers hired to do technical work onsite with customers now find themselves grounded and playing more of a sales role, but they are rising to the challenge. “They’ve gotten to the point where they’re really autonomous and able to interact with customers,” he says.
It helps that COVID-19 supply issues have accelerated customer interest. “It has been a crazy year but the trajectory in the market response for us, it’s been really awesome,” says Strandquist. Hill calls the investment in 3D an aggressive play that will allow Würth to add on-demand production tools and parts that ensure its customers never stock out or have a line down. Hill expects it will result in many millions of dollars of incremental growth for Würth in 2020 — and more than $5 million in 2021.
Hill says the biggest lesson he’s learned during the pandemic is that you can’t over communicate enough. Würth sends out weekly customer and supplier partner success stories, and regional leaders also send weekly updates. In order to keep talent engaged, he also regularly solicits employee feedback and shares how he sees the company’s growth playing out over the next several years. It’s also important to keep customer communications at a high point, doing what Würth can to keep customers on course with their business goals.
COVID-19 has brought Würth closer to both its manufacturing partners and customers, says Wilk. Although they always felt they were part of a larger team, now they have an even deeper understanding of production schedules and demand schedules, he says. “Our service becomes even more of an extension of what they do every day,” Wilk adds. “Because we may have to deliver differently; we may have to deliver at different times, we have to limit the number of people going into a customer’s facility.”
When one customer said they were going to have to table a project because it required an onsite visit to establish, Würth was able to create a virtual visit with body cameras that gave the customer an intimate view of their 200,000-plus square foot warehouses.
Würth was also able to hold a virtual supplier day for supplier partners this summer with more than 200 attendees. “We had a choice to either fold up or be aggressive and creative and I think it really paid off for us,” says Hill. “We received a lot of positive feedback on providing an innovative approach to connecting with our supplier partners in these challenging times.”
Looking toward the future, Würth is preparing for the pandemic to be a reality throughout at least 2021. “It’s a two-year challenge,” says Hill. “We have to be patient and be progressive.”