Digital Platforms Are Evolving In The Metals Industry
As the metals industry digitalizes, it is becoming more and more important for metals distributors to develop quality digital platforms. E-commerce businesses like Amazon have the potential to enter the industry, especially catering to smaller suppliers. This makes now the ideal time to develop industry platforms before this disruption occurs. Large industry players like Kloeckner Metals are uniquely situated to create quality digital platforms that will fill the needs of their customers and the industry at large.
The business-to-business world is different from the direct to consumer world in a few important ways. Companies In the consumer world, such as Amazon or eBay, are primarily driven by product pricing. Sometimes delivery time can be a factor, especially around the holiday season, but most consumers are primarily focused on price. There are a lot more considerations to take into account when you are choosing which metals supplier to buy from.
“Figuring out certain logistics pieces of it would come first instead of just what’s the price,” says Jonathan Toler, sr. manager of products and innovation at Kloeckner Metals. “There are a lot of things that go into the consideration of who you are going to buy from.”
These considerations include things like what inventory looks like, whether the order can be shipped on the same truck as another order, how fast the order can be delivered, and what value-added services are available. Sometimes there is an analog component to the transaction, as well as the digital aspect.
“The preparation work or the value added services work, those are things that Amazon, if they were to come into the marketplace, would have to figure out,” Jonathan says. “If you go order something on Amazon you can just put your credit card in and just go. Here in this world, it is a little tough to put $70,000 worth of material on a credit card.”
Kloeckner Metals has drawn heavily from experience in the industry to create Kloeckner Connect. One tool that is a part of the Connect family is a Parts Manager which allows customers to get a full inventory picture, make forecasts, and order material at the click of a button. Inventory management is made easier by utilizing inventory analysis tools. Additionally, big data can be used to help make more accurate forecasts. This can pick up on trends that the customer may not be aware of, and then Kloeckner can offer special promotions based on this information. All of this can be accessed anywhere at the click of a button.
“We’ve got a lot of positive feedback that we have really simplified the process,” Jonathan says.
Removing unnecessary paperwork not only helps streamline the customer’s business, it frees up sales staff to perform better customer service. Kloeckner does not outsource its tech support or customer service. Knowledgeable staff are always available to assist and answer questions.
“We have real people who are sitting behind the platform,” Jonathan says “While we are becoming more digital, our sales team and our customer support team are all integrated into the process.”
Flexibility has been a major consideration when building all of Kloeckner’s digital products. The demands of a small customer are very different from those of a large customer. Larger customers usually have a set process and may have quality assurance. Sometimes they have IT resources that can help with data transfer and integration, and you can have more options when implementing. The implementation process can take more time, however, because there are also usually toll gates and protocols that need to be followed. With a small customer, on the other hand, speed to market is usually faster. You can get a small customer on-boarded and launched within a day.
“A smaller customer may not need as much customization and may not be as complex an implementation, but they may have a specific way of working,” Jonathan says. “We’ve built our platform to be flexible enough so that the smaller customer can get what they need to do done.”
Kloeckner beta tests digital products with existing customers, in order to test the actual functionality of them. Products are always developed with major input from the customers who will use them. This has been a crucial element to the success of Kloeckner’s digital platforms.
“The metals industry is a no-nonsense type of industry,” Jonathan says. “As our customers evolve and we evolve, we’re going to make really big and impactful investments on the technologies that actually make sense for our industry and not waste time with solutions that may be high on style points but low on real effectiveness.”
Moving forward, Kloeckner intends to build on the early success of its digital products. Building a real, top-tier technology staff has laid the foundation for the future. This allows Kloeckner to build its own software products as new needs arise and scale up quickly. It also holds the potential to leverage the software horizontally, and expand beyond metals into other similar industries as a software provider. The key will be to maintain a balance between supporting existing products and building new ones.
“Building software the right way is expensive,” Jonathan says. “You have to be very intelligent in what you are going to invest money in. For us, it is going to be important to stay focused not just on the 2017 and 2018 goals, but also make sure that we continue down our long term objective, which is to be the industry leading software platform for the metals and materials industry.”
Steven Nghe is currently the Head of Marketing & Communications at Kloeckner Metals. Nghe is a marketing professional with more than 14 years of experience in various environments and industries. His goal is to tell you about the sexy side of steel. Nghe holds a bachelor’s degree in Business Management with a concentration in Marketing from North Carolina State University. Prior to Kloeckner, Nghe worked for Delta Dental, Wells Real Estate Funds, Georgia Institute of Technology and Doosan.