So Much More than Metal
Kloeckner Metals Corporation
While it offers flat rolled, heavy carbon and specialized metal products, Kloeckner Metals Corporation is so much more than steel. It is making great strides in modernizing its operations and transforming the technology and processes to improve the customer interface. The ultimate goal is to overhaul the way the markets function and change the industry as we know it.
Kloeckner Metals Corp. is headquartered in Roswell, Georgia and is part of Klöckner & Co. SE Group, one of the largest producers in North America and Europe. It is also an independent steel and metals distributor and leading service center.
It boasts extensive inventories of steel and non-ferrous metals at its fifty locations throughout North America that serve over eight thousand metalworking businesses in the U.S., Canada, Mexico and Puerto Rico. Kloeckner Metals Corp. provides a wide range of services which include consulting, procurement and the warehousing and distribution of products such as structural tubing, sheets, plates, bars, pipes, grating and flooring.
On a global scale, Klöckner & Co. SE Group assists more than 130,000 customers through its 230 service and distribution centers in more than fifteen countries. In 2012 alone, it turned over more than seven million tons of product.
While the focus of Kloeckner Metals Corp. is on the timely delivery of quality products and service, it continues to find new ways to bring greater value to its customers. This value is becoming even more possible as a direct result of its recent push to transform digitally. The transformation, according to both Matt Meyer, vice president of digital innovations, and Jonathan Toler, product and digital innovations, is being undertaken to position Kloeckner Metals Corp. as, ‘a technology company that also sells steel.’
“If there is any way in an ultra-competitive metals marketplace, where we reside, to differentiate yourself for the short term and then really prepare for future disruption in the long term, the organization has to change dramatically,” Meyer stated. “There’s a big push for Industry 4.0 in Europe, particularly in Germany. They kind of coined the term, which is basically the next stage of automation: an industrial internet of things,” he said.
“I think the Germans are at the forefront of the concept in the B2B [business to business] manufacturing world, really taking the business into the future. Our CEO laid out what they called Kloeckner 2020 strategy. One of the cornerstones of that strategy is a digital transformation of the company.” He cites the examples of Amazon, eBay and Alibaba, which have disrupted the marketplace.
Inspired by the success of these companies, Kloeckner Metals Corp. is doing all that it can to get ahead of the inevitable evolution to e-commerce platforms that have already taken the B2B world by storm. “There is a need to not only prepare for potential platform disruptions but to actually be part of it and create that platform,” said Meyer.
There are many changes taking place at Kloeckner Metals Corp., including the establishment of a new division, Klöckner & Co. Innovation (KCI) in Berlin, which is dedicated to developing digital tools and building a suite of products to be used both within the company and externally.
By creating a new contract management platform and an improved e-commerce website, the company hopes to streamline the procurement process for customers.
“Customers really want things delivered to them in a more convenient fashion. They don’t like to have to have conversations daily, hourly, with their suppliers, which has been the case in the past. I think the customer experience is quickly moving online because people have daily interaction with web services so much in their daily lives,” said Meyer.
“Things are moving in that direction, so to some degree, customer interaction will be more what information you can put in front of them on a screen as opposed to what can you communicate face to face. That’s just a natural shift that is taking place throughout society, and we’re trying to take a leadership position in our space,” Meyer explained.
Kloeckner Metals Corp. has worked closely with its customers to discover new digital ways to strengthen the customer relationship. It has also worked hard to communicate the benefits of this digital transformation and the implications it can have on productivity, bottom line and peace of mind.
“You’re providing the customer not only a reduction in administrative time, which they always appreciate, you address process flow problems within their own organization,” Meyer added. “We’ve really forced customers to rethink the way their process flow works, and not every case, but in many cases, there has been a dramatic improvement.”
“We want to make it easy for them to order,” explained Toler. “We actually tried to preload shopping carts. We do a lot of work for them, so the customer only has to do one or two clicks to get their order to them,” he said.
“As we get more integrated, we have customers sharing with their inventory levels, production schedules, they are giving us access to their factory data or their job data,” he added. With this data, the company can create delivery programs, “so that the customer never has to raise their hand to say, ‘I want metal.’”
While change is often accompanied by skepticism or fear, Kloeckner Metals Corp. is proving that with the efficiencies gained from these advancements – the improved output, workflow and time management – employees can be freed up for more important, value-creating tasks. Digital tools such as metrics, order history and forecasting in a dashboard-type setting, streamline the process for the customer and simplifies the ordering process for them.
“We want to move our people away from administrative tasks to become more inventory managers – to really have the time and the tools to understand what is going on in the supply chain to better manage it,” explained Meyer. “These tools are freeing up the time, without adding resources, to spend more time creating value with the customer by better managing their supply chain.”
A culture shift must accompany this digital transformation as the company introduces these new tools and lays the foundation for an improved platform. This includes taking a new perspective on hiring talent.
“It’s not just retraining and continuing to train for our existing organization, but we’re really looking for different types of employees. Traditionally, maybe we hired more senior people that really know the industry, really know the products that we offer,” Meyer said.
“We want to hire people that are comfortable with the technology and can talk about it and sell the tech side of the business. We figure we can teach the industry-specific knowledge. We can teach metal, but you need to find somebody who has a high comfort level in selling a digital solution, and that’s a totally different baseline of knowledge for a sales rep for example.”
For Meyer, Toler exemplifies those qualities that are needed in Kloeckner Metals Corp.’s future. Toler has an e-commerce and technology background, and he witnessed the passion for change which is what attracted him to the business.
“It was something they lived each and every day. That was really exciting. The company is stable, but they want to have a startup culture and that same zeal for growth that a start-up typically has,” Toler said. “There’s lots of opportunity for someone like myself to make an impact.”
Kloeckner Metals Corp. reacts quickly to develop new products and digital tools. “What we do with agile is, instead of taking this big huge requirement, this kind of monolithic document that can’t be changed, agile says, every week or every two weeks, we break this big amount of work into small pieces of work, and if something changes in the business, then we can actually change the software that we are building without being too disruptive,” Toler explained of the process.
By building smaller, more cost-effective prototypes, the company can examine the potential as the project progresses. This strikes a balance between speed and quality to ensure Kloeckner Metals Corp. is not left behind as the industry changes, toward the B2B world that has taken the market by storm.
“Kloeckner is going to be ready, so as our customers and manufacturers demand digitization and demand the same thing that people want on the consume side of the world, I think we are going to be prepared,” explained Toler.
“This side of the digitalization strategy is all about efficiency,” said Meyer. “It’s about improving the customer experience when dealing with us, better understanding how we manage their program, to be more efficient on our side, so we can do a better job for them.”
Kloeckner Metals Corp. continues to identify new ways to become efficient within its own operations and for the industry, making significant investments of time and resources to ensure that it becomes the leading technology company – that also happens to sell steel.