(playing "Gangnam Style")
- Hello, I'm Matt Meyer and
I'm here with John Ganem,
CEO of Kloeckner Metals. Welcome John.
- Yeah. The band's back together, Matt.
- The band's back together.
Now it's been a while since
we've done a video together
and it seemed like a good opportunity
to catch up given the
circumstances in 2020,
not the year that we,
any of us anticipated,
but it was a good opportunity
to kind of catch up with you
and really understand how's
this impacting Kloeckner.
Specifically, how has it
impacted the Kloeckner strategy
that you've put in place?
- Yeah, you know, I would say,
I don't think it's really
changed the strategy.
You know, Matt, I think really
what the crisis has done
is forced us to accelerate
this whole concept of
digital transformation.
You know, we were on this path,
but I think COVID-19 has
really kind of brought
to the forefront, the need
to transform our business,
not just on our customer
facing tools, right.
We spend a lot of initial
energy in this whole strategy,
developing these tools that you know,
that our customers use, that
our customers would value.
I think now, in addition
to that, of course,
that's obviously gonna
remain a primary focus.
We really have to look at our operational,
procurement, administrative activities
and we have to bring the same type of
digital transformation,
automation, standardization,
whatever catchphrase
you wanna use to bear,
to really drive efficiencies
and productivity, you know,
front to back throughout
the entire organization.
And I think COVID has really
accelerated that whole process.
- Right, really looking
at a whole different slice
of the business.
- It's an all encompassing
strategy now, right.
That transformation is really
focused on the entire organization.
- So, how let's say this,
how has COVID changed the business already
and how do you see it
changing the business?
- Well, clearly it's changed
it pretty significantly
in the short term as we and our customers
and, you know, everybody in the economy
is dealing with, you know,
a lot of uncertainty,
a crisis that there really
wasn't a playbook for.
But I think, there's no question
there's going to be a lasting impact,
but it's really difficult
to know what that is.
You know, what is the, and I
hate, everybody hates the term,
the new normal, but ultimately
at the end of the day,
COVID is gonna change
the way that we manage
and we run our business day to day
and I'm certain it's gonna
change the way our customers,
you know, run and manage their business.
You know, I think everybody certainly,
just thinking about, you know,
the steel industry and
the metal supply chain,
I think everybody is
going to be laser focused
on driving cost out of their business,
on becoming more efficient. And I think,
from our viewpoint, Kloeckner's viewpoint,
we wanna be at the forefront
of that paradigm shift.
We wanna be in a position where, you know,
the supply chain, the
value in the supply chain,
isn't just about the price of steel,
delivery reliability or quality,
but it's also about, how easy
or how efficient it is to
do business with Kloeckner.
Right, and I think that's really our drive
and I think that's the value proposition
that we're trying to create.
- Really focus on those
activities that bring value,
eliminate those activities
that don't bring value.
- Absolutely.
- So speaking of that, how are
we supporting our customers,
you know, during this whole period?
- Well, you know, obviously,
our first priority
when this whole crisis hit
was to react as, you know,
as quickly and aggressively as we could,
by you know, implementing protocols
that, you know, kept our employees safe.
That was our first objective, obviously.
And then of course, to keep
our facilities operational
because we can't support our customers
if we're not operating
and we're not shipping
trucks every day. So
that was our first goal,
I would say, I couldn't be
more proud of the organization
and how they responded.
Our employees showed such
incredible dedication
and perseverance through
such a difficult time,
you know, united and I really,
I think reflects extremely well
on the type of organization
and the type of culture
that we've tried to create
here at Kloeckner. So, you know,
when you sit back and you think about,
everything that's gone on
in the last few months,
you know, yeah. It's a difficult time,
but it's also really great to see,
how an organization can respond
and how employees step up
and rally together and support each other.
So I think from that
standpoint, it's been great.
You know, I think the,
the other thing, Matt,
just going back to our
previous conversation,
this whole emphasis on
digital transformation,
I think this whole crisis
is going to make us
a much better company
by really accelerating,
this strategy that we had,
this vision that we had.
I really think that we're
going to emerge from this
with a value proposition that is, you know
that our customers are
really gonna embrace, right.
I just think we're gonna
be a better company,
with better tools and
easier to do business with
and I think ultimately that's the way
we're gonna support our customers.
- So John would, can you expand
on some of the things that
we're working on now to drive this vision?
- Yeah, like, you know,
like I've said, you know,
this is a pretty all
encompassing type of strategy.
We have a lot of initiatives,
a lot of major projects
underway, you know, obviously,
we've been working for
a long time to develop,
these customer facing tools, Part Manager,
we have a new web shop rolling out,
which we're all pretty excited about.
You know, again, it goes to this whole
change related to COVID, you know,
it's clearly throughout the economy,
moving people into more of an online
type of sales or purchasing mentality
and we wanna be prepared for that
and provide that option to our customers.
Especially if they're working
from home and, you know,
it's a lot of changes
coming way down the future.
And I know we have a lot of, you know,
new tools that we're working
on enhancing the current tools.
So a lot of exciting stuff there.
We have a new CRM initiative, you know,
new software we're bringing in
to support our commercial team,
to make them more effective.
We have new logistical
software that we're,
we're bringing on stream
here in the next six months.
I think that's gonna make
us much more cost effective,
on how we manage, our outbound
and inbound logistics.
You know, I think in
addition to a lot of that,
we're focused on understanding
our processes internally.
Right, really identifying those processes
that are manual, that
are not providing value
in any way, you know,
clerical, if you will,
or administrative in nature
and developing digital
solutions, ERP enhancements,
where we can automate those processes.
We just find a better way
to manage that activity,
just to take our sales
organization, you know,
we know that our salespeople,
our commercial team
is spending a lot of time
on non-value activities.
Whether it's just, you know, order entry
or expediting an order, et cetera.
There are better more
efficient ways to do that.
You know, we want to free
up our commercial team
to be focused on providing
value to our customers,
not on this internal-administrative
type of work.
So those are the types of things
we really wanna hone in on.
And I, frankly, you know,
I think through this process, we've found
more inefficiencies than
we really thought we had.
So I think there's a lot
of great opportunities.
We're also gonna look really
hard at our footprint.
We're going to be
optimizing that footprint.
We're going to be probably reallocating
some of our our resources,
some of our equipments,
some of our assets, again,
focused on providing
more value for our customers.
If there's more value in
moving a piece of equipment to,
from one branch or one
geography to another,
that's what we're going to do.
And then I think the other thing Matt,
I wanna touch on is talent management.
You know, I think as an industry,
it's probably not something
we've been great at,
but I'm telling you, we're gonna make it
a key strategic initiative
to bring new talent
into this organization, to take
the talent we currently have
and give them the training
and the development
that they need to succeed.
Because at the end of the day,
this is all about positioning
this company for the future.
And if we don't have a
focus on talent management,
we won't be successful. So
that's a key initiative for us.
- Absolutely. So, so given
that, given the investment
and really changing the company,
modernizing and automating,
what does the future look like, John?
And I know nobody knows what
the future really looks like
in terms of the market and so forth,
but for Kloeckner in general,
what does the future look like?
- Well, you know, I
certainly think that the,
the crazy thing about this crisis was the,
I'm not gonna say unprecedented
because I've said it too many times.
It's just the incredible
amount of uncertainty
and unpredictability, right.
To be honest man, like you just said,
we really don't know what
the future looks like, right?
This is, there's no roadmap here, right.
I think the one thing we know for sure
is that the future is going to
look different than the past.
And I think that's why
everything that we've talked about here
is so important because if we
can create a company, right.
That is so efficient,
is so cost-effective,
managed on a foundation of agility right.
Of embracing change, if you will.
I think we're gonna emerge from this.
Like you said earlier, just
much a much better company,
but a company that's positioned
to adapt and to overcome any challenge
that the future may throw at us.
And there's no question,
there's going to be challenges.
This road to recovery,
as much as we want it to be over tomorrow.
Unfortunately I think
it's going to be long.
It's going to be bumpy and it's gonna be,
full of twists and turns.
And I think as a company,
you have to be ready to adapt to that
into be able to, you know, succeed
despite all of these challenges.
And I think that's exactly
where we're headed.
And I think that's really what makes,
gonna make Kloeckner
not only a good company,
but a great company and
that's ultimately the goal.
- So, John, thank you.
Appreciate your time
and for joining us today
and thanks to all of you for joining us,
I hope you enjoyed this
update on Kloeckner.
- And really, to all of our customers,
thank you for your business.
It means more now than it ever has
and we're here and we're going to be
a truly valuable supplier to you.
Not only now, but well into the future.
(bright music)
