Kloeckner Metals to Aggressively Pursue Digital Strategy

By Phil Bolton, Dec. 7, 2017

Kloeckner & Co., the global German steel service company with annual revenues of more than $8 billion, is on a roll. Its “Kloeckner & Co. 2022” strategy is aimed at disrupting its industry through an aggressive, innovative digitalization initiative constantly upgraded by a team of 60 software engineers based in Berlin.

That disruption is to create opportunities to attract a wide range of employees ranging from workers acquainted with the processes of sophisticated equipment on the shop floor to a wide range of commercial professionals including those in sales, purchasing and finance.

John Ganem, who is to head starting Jan. 1 Kloeckner Metal Corp., the company’s U.S. affiliate based in Roswell, told Global Atlanta in a telephone interview, “One of my biggest initiatives going forward is to build the Kloeckner management team of the future.”

“The industry as a whole has had a hard time attracting young people who have been looking to enter tech, pharma, or financial companies,” he said. “We are beginning to see a lot of generation turnover and we don’t have a very deep bench.

“We are asking ourselves how to attract young people into the industry, how do we train them, how do we keep them motivated, especially since we see our business as very different 10 years from now. The move to digital is part of the answer.”

An internal analysis by the global company several years ago concluded that today’s steel industry’s supply and value chain remains highly inefficient with transactions straight-jacketed by communication technologies limited to telephones, faxes and emails.

“Kloeckner & Co. is a pioneer of change,” reads its promotional material. “That’s why we have extended our strategy to be even more digital, efficient and profitable. The main pillars of our strategy are in place. They are supported by a transformation toward a more open, customer-oriented, flexible and digital corporate culture.”

The strategy already has been implemented in Europe through its “One Europe” program with synergies for its services being provided to customers in Belgium, Germany, France, the United Kingdom, the Netherlands and Austria. A focus on digitalizing purchasing and logistics practices netted more than $9.4 million in the first nine months of this year, according to the company’s website.

Now it’s the turn for the US program that is to be led by Mr. Ganem, who asserted that the company will benefit from lower costs and greater efficiency, and that its customers “will benefit from an enhanced buying experience as we improve the ways in which we interact with them.”

More specifically, he said that Kloeckner’s customers will be able to purchase its products digitally, which will streamline the traditional sales channel and eliminate many antiquated processes.

He added that the corporation is expected to have 60 percent of its sales completed through digital channels by 2022 under a plan launched several years ago by Gisbert Ruhl, the company’s CEO.

“There aren’t many sentences that we put together that don’t include ‘digital’.” he said.

Kloeckner.i, the Berlin lab, is tasked with the rapid development of digital tools and portals to leverage the company’s relationships with customers and suppliers. It also is to continually improve solutions for its online order processing system. So far, so good with customers already using digital contract portals, online shops and order overviews.

Mr. Ganem indicated his confidence in the process, saying that “We will create a third way of doing business, be a leader in this kind of transformation and stay ahead of our competition. We also will be able to expand our business either by growing organically or by acquisition.”

Already the corporation services more than 8,000 metalworking businesses throughout the U.S., Puerto Rico and Mexico.

Mr. Ganem went to work in 1991 for a Cleveland, Ohio-based steel company immediately upon his graduation from college and moves into the CEO spot from the position of executive vice president, corporate purchasing. Previously he held a similar executive v.p. position with Macstell Service Centers USA prior to Kloeckner’s acquisition of the company in 2011.

In addition to championing the digitalization movement, he also plans to make better use of the data that digitalization provides. This initiative has led to the company’s partnering with leading companies in the field of artificial intelligence enabling it to predict more accurately steel demand and price trends along with more in-depth analysis of customer behavior.

While pushing the envelope on the production side, Kloeckner Metal Corp. also is expanding its investment in the Southeast with the $11 million expansion of its plant in Greenville, S.C., to provide a new line of high strength steel for the automotive industry which wants to manufacture lighter, more fuel efficient cars.

It also is willing to partner with other companies to develop new products and partnered with a Chinese company, Double Stone Steel Ltd., to produce and market physical vapor deposition (PVD) processing equipment to meet the demand for more color options in surface-treated stainless steel.

And Mr. Ganem said that he plans to continue the corporation’s policy of becoming actively involved in supporting the communities where it is involved both domestically and abroad.

Domestically the corporation sponsored a food drive on behalf of an Indianapolis, Ind., food bank, and helped a fund raiser in Santa Fe Springs, Calif., which collected $20,000 to help cure cystic fibrosis.

Internationally, in response to the devastation of Hurricane Matthew last year, Kloeckner donated two wide painted metal coils to rebuild buildings in Haiti. The coils had been run through the roll former at Tulsa, Okla.-based Metal Panels Inc., a partner in the initiative, turning the metal coils into roofing panels.

Cross Catholic International, the Washington-based non-profit of the Catholic Chuch, in turn distributed the materials in Haiti for the rebuild or repair of 260 homes and 20 religious buildings and orphanages.

Kloeckner, Metal Partners and Cross Catholic also have partnered in El Salvador where they have helped expand the facilities of schools, churches and hospitals.

Despite the corporation’s positive prospects, Mr. Ganem knows that he will need new employees and is planning to develop summer internships for students and conduct not only more active recruiting but formal management training as well.

“We will want our employees to learn the business from top to bottom and from bottom to top,” he said. In keeping with this initiative, Kloeckner has developed an Emerging Leaders Program that brings employees from North America and Europe to Berlin so that they can learn together more about the gain company and gain leadership experience.

Kloeckner Metals Corp. has more than 50 locations around the US, with more than 2,400 employees. It is a member company of Kloeckner & Co., a distribution and service network of 190 locations in 13 countries, servicing over 130,000 customers.

For more information about Kloeckner, go to www.kloecknermetals.com

Article may be found: http://www.globalatlanta.com/kloeckner-metal-corps-new-ceo-aggressively-pursue-digital-strategy/