For the second year in a row, Kloeckner Metals has won the Supplier of the Year Award and the first year for the Innovation Award from Prime Advantage for the fall of 2016. Prime Advantage is a mid-market manufacturing buying group that was founded in 1997. Kloeckner has been a member of the group since its inception, and this is Kloeckner’s 8th time winning the award. It is voted on by the member companies, most of which are steel buyers. The award comes in response to Kloeckner’s efforts to improve the process of ordering steel online.
“They recognized that it is something unique and different that we are trying to do in the industry,” says Matt Meyer, VP, Digital Innovations.
Kloeckner is engaging in an overhaul of the entire procurement process with the aim of increasing transparency from the production mill down to the customer. Central to this effort is the Part Manager tool. This online tool is geared toward contractual customers, allowing them to get a full image of inventories in real time, and place orders at the touch of a button.
“It provides the window into existing inventory and contract pricing,” Meyer says. “It gives good summaries of order histories and invoicing information. It also gives graphical analysis on forecasting and performance compared to forecasting.”
The forecasting feature is particularly important. This tool gives a window into forecasting models, often for the first time. It gives the customer an opportunity to understand the metrics that Kloeckner uses to run the program.
“In cases where we are coming up with a forecast in conjunction with the customer, it gives them a really quick understanding of our process,” Meyer says.
The forecasting feature also helps the Kloeckner sales force. As the salespeople have more tools at their disposal, they can have better discussions with customers. Now, they can pull up the forecasting tool on a tablet or laptop and have an educated discussion on inventory.
Another important feature of the Part Manager tool is the amount of detail it provides customers. This detail goes all the way down to the tag level.
“Some customers have a need to ensure that the release or the purchase order quantity exactly matches what is shipped. We don’t ship things always in a perfect, pre-packaged bundle. It’s not like buying a box of a hundred light bulbs; our bundles can vary. So it is important for receiving accuracy that they understand exactly what is in inventory. Knowing that allows them to replicate that on the purchase order side or on their receiving log so they have a perfect match.”
Part Manager also allows customers to download the data into Excel spreadsheets. This feature makes it possible for customers to do their own analysis, and ensure the accuracy of pricing. When combined, these features create a detailed picture that makes overall inventory management easier and more efficient.
The Part Manager is just the first of many tools that will be forthcoming. In early 2017, multiple new tools are planned to be rolled out. These will add additional pieces to the puzzle of increasing transparency between the customer and the production mill. The ultimate goal is to increase efficiency.
The impact of the larger digitalization effort is already starting to be seen. As of the third quarter 2016 report, 11% of Kloeckner’s sales were generated via digital channels. Part Manager has seen impressive adoption for a tool specifically targeted at one segment of Kloeckner’s business. As the sales force was able to better understand the potential capabilities of the tool, adoption has accelerated.
“Today our biggest challenge is the continual development of the tool while keeping it simple and easy to use,” Meyer says.