Order Up
OEMs and Fabricators gain competitive advantage with automated online quotes

By Dylan Altieri

CLIFTON, N.J. – August, 2007 – Remember the good old days of metal ordering and fulfillment? There was a telephone, a fax machine, perhaps a couple of employees on each end. Of course, response times were measured at a minimum in hours, days, maybe weeks, leaving the OEM/fabricator waiting for valuable information before starting a project. Ahh, the good old days! Today the industry is evolving, moving into online ordering, creating a more efficient process, one that enables OEMs, fabricators, and service centers to stay competitive while working together. 

The metal service-center industry has utilized online buying technology for a number of years now. A simple Internet search will show multiple companies claiming online-ordering capabilities. Of course, geography limits how many of those systems are actually used. After all, it’s unlikely anyone will order steel plate from a metal service center five states away and pay the extra shipping costs.

And there are other issues. Many existing online sellers are not as high-tech as they appear. They may simply sell excess material, or scrap. Or the “online” ordering system may consist of an inside sales representative with an email account who crunches the numbers by hand and emails them back when they find the time. The benefit to the user is limited in either case. Still, even this “pseudo-online” approach is an improvement over old technology.

While some service centers still cling to the old technology, others are slowly wading into the waters of online ordering. An even smaller percentage is taking the technology a step further and using a fully integrated system, one that connects the customer with current inventory, returns accurate quotes, and even offers online purchase orders.

Two companies in the northeast are already ahead of their peers.

Salamon Manufacturing, New Britain, Conn., is a high-tech OEM manufacturer of high-precision machines and parts working with companies aligned with the aerospace industry, the federal government, and others.

Salamon produces parts that are milled, turned, ground or CNC-machined (computer numeric controlled). The company also manufactures its own ERCO brand hydroformers, punch riveters, and tapping machines.

In late 2006, Salamon’s founder and president, Andrew Salamon, was looking for a competitive edge to build his business, when Denman & Davis, a metal service center in Clifton, N.J., introduced him to its completely new online ordering system. “Everything is price sensitive and we have to work hard at keeping our costs down,” Salamon said. “They came down, demonstrated the system to us. We recognized right away that it had value.”

Denman & Davis demonstrated new software developed by Tools4Mfg.com and its parent company, Expedicom. The software ties together the online ordering system with Denman & Davis’ current inventory. The software generates customer specific price quotes in seconds. It also processes online purchase orders based on those price quotes, tying them electronically to the Denman & Davis sales department, further speeding the processing.

“The system provides customers with buying information, material availability, price, for even complex processed material,” said Randy Haas, president of Tools4Mfg.com. “This system basically acts as an administrative assistant for both the buyer and the seller but works 24 hours a day, seven days a week, and does not take coffee breaks, lunch, or ask for a raise.”

For OEMs like Salamon, that is the advantage.

“It’s a little early to measure efficiencies in terms of dollars, but we are seeing advantages to using the system,” Salamon said. “It is giving us a competitive edge. Since the turn around time is so quick, our sales people can quote a project quickly and accurately. We don’t typically lose customers over slow response times but we do lose projects. Time is money. If I can get pricing in a few key strokes, we’re able to stay competitive.”

Haas said that buyers typically look for a number of items for different jobs and projects at the same time. “They may have 35 items,” he said. "The sooner they have the information – what materials are available, the cost, expected delivery dates – and get back to their own customers, the better. Everything today is on a just-in time basis. Having accurate information and having access 24/7 does not always mean I get the order but my customers know I can get back to them and I get on their quote list.”

The second company benefiting from the online system is Eastern Steel, a general line warehouse specializing in structural metals based in Brooklyn, N.Y. “The immediate advantage is being able to get quotes after hours, when things have  calmed down and it’s quiet,” said David Laurentz, president. “Even if some details need to be tweaked, it can be done the following morning but it gives the customer an idea of what the materials will cost and allow them to start their planning process early.”

Another advantage, Laurentz noted, is the ability to request and receive quotes while visiting with customers. “I can be sitting in a customer’s office, log in to the site and get a quote and give the spot pricing to the customer,” he said. “So the system can be used to build stronger relationships.” He also said the ability to incorporate special handling instructions also adds value to the system. For example, when placing an order he can specify delivery location and how it will be unloaded from the truck – fork lift, drop load, etc. Such details enable the receiving site to be ready when the delivery arrives.

An additional benefit involves the system’s built-in purchase order capabilities, which Salamon and Eastern Steel are only beginning to explore. “We’d like to use that feature, where we place the order and the material arrives five days later, or whenever we schedule it,” Salamon said. “It’s like mail order. Log on, put your order in a shopping cart and stuff shows up a week later.”

The latest advantage works in favor of the OEM/fabricator as well as the service center. “Denman & Davis fully integrated the purchase order capabilities to their back office,” said Haas. “No one at D&D has to do any data entry. All that is required is diligent follow up.”

Of course, with all things new, there were hurdles when implementing the new system.

“We have to overcome resistance from those who are not computer literate,” said Laurentz. “We have a couple of employees who know enough to get around our system but aren’t very computer savvy. As time goes on, we can change that through additional usage and better education.”

Haas agrees. “The number one weakness is human resistance to change,” he said. “Buyers and sellers are used to doing things the way they always have. The biggest hurdle is to get someone to try it. Once they do, the barriers come down.”

Haas added that early feedback from the Denman & Davis sales team helped. “They asked what happens when the material requested is not available. We’ve set the software to respond automatically via email saying the requested material is not available but a sales person will be in contact. We were able to close that hole.”

“When there were questions in the previous process we called the sales staff,” Laurentz said. “Now, as we familiarize ourselves with the new program, we’re hoping to work those answers directly into the system as well. We’re learning as we go, troubleshooting and seeing how the system can be improved. No system is free of flaws, but as it develops we can eliminate the negatives and deal with the positives – the speed of quotation turnarounds, order entry being just a click away.”

In the end, the sale remains centered on the relationship between the buyer and seller and the system takes that into account by offering real-time monitoring of the users activities, including inquiries and orders. “Users can request to be contacted by their sales rep, and can add comments to items for additional sales information,” Haas said. “Sales, in turn, can respond at anytime with an email direct to the user or a follow up phone call. It adds the human touch to the entire process and promotes the continuation of the buyer/seller relationship.”

Maybe those good old days are still on the horizon. Or, maybe the good old days are just beginning.

About the author: Dylan Altieri is marketing manager for Denman & Davis, one of the northeast’s largest metal service centers. You can contact him at 800-947-8335 or via email at daltieri@ddsteel.com

About Denman & Davis

Since 1888, Denman & Davis has served the OEM, Machine Shop, MRO, and Construction industries, along with a variety of other markets. Today – with locations in New Jersey, New York, Rhode Island, and Pennsylvania – Denman & Davis is the Northeast’s largest general-line independent Steel Service Center.