Fully Threaded Radio With Marc Strandquist
Eric: It’s Fully Threaded Radio. Hi, everyone. Eric Dudas is here with a special report episode of the podcast. During Episode 157 of Fully Threaded Radio, we discussed the Industrial Distribution Big 50 List, as many of you heard. And, near the top of that venerable list of industry giants is Optimas Solutions. The Chicago based heavyweight known for helping manufacturers to elevate output and reduce costs with their tech driven approach to supplying fasteners and related solutions. There have been two major headlines in recent weeks from Optimas.
And, since they’re such a big fish in the pond we’re all swimming in, I jumped at the chance to speak with the newly appointed CEO over there. That’s Marc Strandquist, who many of you know from his many contributions to Fully Threaded Radio over the years. Now, this isn’t a lengthy conversation, but it will give you a deeper understanding about the new strategic direction Optimas has set out. And Marc also had a chance to comment on his management style, and the sometimes confusing past of the company.
He winds up with an update on the personal setback he experienced a few years back. We discussed that; you might remember at the time on the podcast.
There’s a lot here and I know many of you in the audience will get a lot out of it. So with that, here’s the conversation with the remarkable Marc Strandquist. Optimas Solutions is a global manufacturer and distributor of industrial fasteners, as well as a wide range of supply chain solutions. The company recently announced a bold strategic plan to help their many customers and suppliers who are rethinking how they do business. It was also announced that Marc Strandquist has been selected to guide Optimas along the path of its new direction.
Marc was promoted to the position of CEO of Optimas after serving in his previous role as President of the Americas. He’s no stranger to Fully Threaded Radio, and it’s good to see a longtime friend do well. Marc Strandquist joins us now to discuss these developments. Marc, thanks for being here.
Marc: Hi, Eric.
Eric: Good afternoon. Yeah, I’m very pleased to be able to chat with you.
What can I say? But first, congratulations on your new role. That’s a lot of news you have to share. So please dive right in. What are the high level details of your new blueprint for Optimas?
Marc: Well, thank you, Eric.
Yeah, obviously all of us have been dealing with the tumult of the virus and what it’s done to the economy. And, we all look at ways of reinventing ourselves. And so we’ve really spent this year focused really on innovation, technology, improving what we have to offer customers of our current products and services. But we’ve also been looking at adding products and services to our portfolio so that we can become even more valuable to our customers. Specifically, examples to that in terms of technology and innovation.
We have a manufacturing plant in Chicago in Wooddale that we’re very proud of. It’s full of a lot of new equipment that would make very complicated automotive style parts and we have the ability to take on quite a bit of business there. And one of the things we did this year to improve their technology was to take them forward 20 years and install a new ERP system that’s specific to manufacturing through Epicor and, you know, enable us to really improve our efficiencies and productivity and capacity that’s done now.
And so that isn’t just a dream of what I’d like to do for the future that’s been complete. Our team there was just so dedicated and focused. Now we have the ability where we have, you know, like large TV screens up in the manufacturing shop floor that you can walk by and see that each machine is labeled and by color code, you know, if it’s running, if it’s not running, what the issue might be. So, you know, our ability to collect data and improve how we do things is pretty remarkable.
And we supply complicated parts to a lot of different people. It could be engine parts, they could be truck assembly parts. We make product for all sorts of different types of industries and we’re looking to grow with that and add to our capability and capacity. And right now, one of the things that we’ve done when I started, we didn’t have a sales force for the Wood Dale facility. And now we do. We spend a lot of time going out there and looking for those customers that are looking for the kind of added value that we can provide.
And it’s also a nice addition to our tool kit as we talk to customers about distribution programs. Another component to the innovation is installing and implementing a system for demand planning. That’s called Tools Group, which is definitely out there in terms of futuristic looking compared to what was being done before. We’re very pleased to get that done and implemented. It’s not, again, something that is just a bunch of sales gas of what we want to do for the future.
We’ve done it and we’re doing it, and it’s already effective for us. We’re seeing inventory levels go down and having the right kind of inventory and stock, having the right kind of inventory in each of our distribution warehouses and not having a lot of excess and obsolete. And so we’re really starting to see some nice inroads with that. And over time, as we burn off those CWD, any type of products that are in our inventory that we have too much of, and that helps fund us as we want to add inventory for new business.
Kind of the third component for innovation is that we’re just starting and getting going, is the implementation of a cloud based ERP system for the distribution operations. Again, where we have been running on a mainframe from the nineteen nineties type of thing and I’m really proud of our group is attacking. All the employees are aware of this and they understand the importance of jumping forward in time with this kind of technology and what the additional benefits that it’s going to bring to us.
So in terms of the innovation and technology side, that it adds to what we had already, which is we already do RFID for our customers, we’re capable of doing that. The scale bin systems, all that type of stuff was already in place. Now we just have better tools in terms of the total components in terms of, as I said, and in terms of technology and innovation, in terms of products, you know. Almost everybody else, that’s always the classic adding product assortment that you can provide a customer.
And so, you know, as we looked at the planning for that, looking at safety items and PPE and certainly products that would support what is required with the COVID virus and some of the protection people are looking for that maybe weren’t there last year and these kind of volumes. So developing that. And so that caused us we’re pretty much done with that program in terms of what I call phase one. One element of that is in the environment that Optimas was in over the last five years, we seem to do was shut branches down and retrench.
And now we’re actually opened up a new one for once where we’re going the other way. Now we’re we’re back to expansion. We’re back to growth. And we have a highly motivated group that’s jumped all over that. Actually, the grand opening was yesterday.
Eric: I saw that on LinkedIn. Yeah.
Marc: And we actually had the governor of Missouri there, which was was a pleasant surprise for us and a lot of a lot of great free press in order for us to start up and certainly in that St. Louis, Missouri community in terms of being able to provide all sorts of customers, these types of things. And so that’s launched and going. So it’s just those kind of a variety of things that I think really have helped us and helped us as a company get back kind of our mojo.
You know, in terms of the last five years for Optimas, I think to a lot of the industry was a was a mystery. We were great farmers. You know, most of the relationships we have with customers are almost 10 years or more. But we really weren’t out there in terms of new business. We were not at risk or a threat to people in terms of what we offered. But I think this year has been spent putting all that together.
What’s our value add that we can provide a customer? How exactly can we save them a lot of money? And then so we’re doing that. And I think that comes twenty, twenty one. We are going to be a competitor to be reckoned with and and be able to compete with many of the people that are out there today. You know, we have wonderful competition. I have no problem saying that, you know, and they’re all great companies with a lot of unique capabilities.
But I think the one thing that separates Optimas is the collection of those things. There is very few people that are global because when we say global, we just don’t have a warehouse in Europe and we consider ourselves global. Right? We’re talking about hundreds of millions of dollars in sales on an international basis. So, you know, when you look at global, when you look at being able to provide quality programs and RFID and scales, when you couple that with the engineering that we can provide, you couple that with domestic manufacturing mail threaded fasteners, and then you couple that with the PPE and safety.
When you look at those combinations of things, there’s fewer than five people out there that have that total package. There’s excellent companies that we compete with that do the PPE and safety, there’s no question. But they don’t offer domestic cold farming manufacturing like we do. You know, there’s domestic calls for manufacturing companies out there that are all excellent and very good at what they do, but they don’t offer distribution services. So and then when you look at a customer that may have a location in Mexico, in the US and Bulgaria—
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