Success with
 

KGS Steel Inc. Means Service

Founded almost 20 years ago, KGS Steel, in suburban Birmingham, Alabama, has grown many times its original size. The key to this growth has been service; as founder Gaston Stein likes to say, “KGS Steel serves to serve again.”

When it all started, KGS was housed in a single location of about 15,000 square feet, located in Birmingham, Alabama. Gaston Stein and his sons Kerry and Scott started it. They are all three actively involved today. In 1994, they moved into a new, state-of-the-art facility in Bessemer, with over 70,000 square feet of much needed space. In 1996, KGS opened a second location in Nashville, Tennessee, about 120 miles away.

KGS currently stocks a full line of carbon structural and plate steel including angles, channels, flat bars, rounds, expanded metal and bar grating. Based on the booming housing market in the southeast, they have recently added a new and very successful line of iron accessories and steel forgings for residential and commercial applications.

KGS also provides custom services, such as precision saw cutting, pattern burning and straight line shearing. They offer will-call service 5 days per week, and next day delivery from their own transportation fleet. Their customer base extends over five states and is constantly growing.

Simultaneous with the expansion in 1996, KGS decided to expand and upgrade their computer system. After completing their review process, they purchased and began implementing MCMS. KGS has found it to be the perfect complement to their philosophy of world-class customer service. Controller Al Boohaker especially appreciates the tools MCMS provides to control inventory and track orders - both key elements of good customer service.

Flexibility is another key to good customer service and KGS has found MCMS to be both flexible and innovative. As their business has changed, MCMS has easily accommodated the changes. KGS started using MCMS to help manage their inventory in Bessemer. Since then, they have seen its uses increase and expand into almost every phase of their operation in Alabama as well as in Tennessee. Currently, they are looking into the advantages of MC Fax and MC Net/E-mail to speed communication with their customers. Al expects that he will soon be able to respond to customer requests faster than ever with less effort and almost no paper. In addition, Al is looking forward to the innovation of the new graphical look and feel coming to MCMS, as discussed elsewhere in this newsletter.

KGS currently runs MCMS on a Unix server because it has proven itself to be an extremely reliable platform with outstanding performance. Last year, they upgraded their server and installed SCO Unix Enterprise. This provided them with a simple integration path to their Windows 2000 network. The combination of the two - Unix and Windows 2000 - has given them the convenience of Microsoft products and the reliability of Unix. Al couldn’t be happier with the result. It has also provided faster workflow between headquarters and the branch in Nashville.

When he arrived two years ago, Al knew he had a lot to learn about KGS and about MCMS. However, he dug in and soon understood what was being done and what he wanted to improve. In learning MCMS, Al was introduced to Dave Meggelin, the Compusource Support Specialist assigned to KGS. They established a close working relationship, and Dave has proven himself to be as much a consultant as an expert in MCMS. He and Al have discussed processes, procedures, and operational steps. This has lead to a much more streamlined operation and efficient office. Al says he hopes to pick up many more ideas from his conversations with Dave.

There is a strong commitment at KGS to continue to leverage MCMS by better utilizing the existing applications, and also taking advantage of new applications as they are introduced. This commitment, along with additional innovations in the warehouse and operations, leads to an understandable air of optimism about the future. Currently, they are planning another expansion at the Nashville location. They are also looking at other product lines to add. This optimism is always governed and fueled by their watchword – Service. Focus, dedication to details and the use of tools like MCMS allow KGS to set the standard for service throughout the southeast. Perhaps Scott Stein said it best, “Our customers look to us for a higher level of service and they know we can deliver.”

Compusource would like to take this opportunity to congratulate KGS on their historical growth and success, and wish them more of the same in the years to come.

SOFTWARE TO THE RESCUE Software Automating a Steel Service Center

By TERRY GABET
Industrial Tube & Steel

Company Background

When Edmund (E.G.) Siess, Jr. founded ITS in 1956 it was a one truck operation with a limited inventory. Today ITS has grown to a multi-faceted facility complete with modern sawing capabilities, a fleet of tractor trailers, and a branch office in Cincinnati.

Our success over the years can be attributed to inventory availability. Richard Siess, who was promoted to President in 1985, has carefully planned the diversification of their product line, gradually adding new items to their inventory. "We look for products to complement those purchased by our existing customer base," says Siess. We added bronze, TGP, angles, flats and channels to the product line because we noticed that a lot of people who buy tubing also purchase these products. By consolidating purchase orders they reduce their customers supply chain costs, adding to their value.

Providing this kind of service to our customers is important, we have built a reputation in the industry for doing whatever it takes to get the job done. " Service is what we are selling" states Siess. With almost 100,000 square feet divided between three warehouses ITS stocks a wide array of steel tubing, cast iron, TGP bar, and bronze. Many times customers can place an order and pick up their material the same day. We have also increased our focus on value-added services to meet the changing demands of the metal working industry, which has proven to be a wise move as fiscal 1998 was a record breaking year for ITS.

The Search for Software Begins

While ITS’s focus on value-added services has helped us achieve record sales, we still felt it was imperative to find a way to cut costs and streamline operations. We needed the tools to provide management information, which was timely and relevant. Relevant information in today’s steel service center environment is a competitive advantage. We felt an integrated software management system could assist in accomplishing these goals and so the decision to automate was made.

The first step was to see what software was available. We began the search by reviewing periodicals specific to the Steel Service Center industry and contacting Service Center Trade organizations. In addition, we contacted our accounting firm, which sold state of the art generic distribution software. Our options included purchasing industry specific or generic warehouse distribution software. Both had many good and bad points. We chose to narrow our focus to industry specific software. We felt the generic warehouse packages would require significant and costly modifications in order to provide the "look and feel" or lingo of the steel service center industry. The implementation of a completely automated system is difficult in itself. Changing what amounts to the language our employees use to conduct business would be an additional burden.

Richard Siess and myself had several criteria for their new system. The system had to be designed specifically for Steel Service Centers, be fully integrated, and handle our inventory, accounting and distribution needs. The most important area the system had to excel in was an order entry system. We wanted to ensure our inside sales staff had the necessary tools to close all possible sales. The system had to be capable of expansion to accommodate future growth. After many hours of defining our needs, viewing demonstrations and on sight reference checks we narrowed our list to two candidates. We turned our attention to the software providers themselves. Who had more staying power, which had more products in the field and for what length of time? Who had the financial ability to continue to upgrade their software in terms of features and new programming languages and techniques? Who had the depth in staff to provide a high level of support? With all of these questions in mind we chose the Metal Center Management System (MCMS).

MCMS is fully integrated and has assisted us in running the many different aspects of our day to day operations more efficiently. I am impressed with the Sales Order and Inventory modules. But, the key selling point remains Compusource’s technical support, flexibility and timely response to our changing software needs.

"The MCMS system has helped us become more cost effective by simplifying the tracking of drops and keeping a better balance of inventory" says Siess. "We have moved from merely controlling our inventory to truly managing it. We are now able to better forecast our purchases and move closer to a just-in-time system." ITS’s fill rates have improved over the past year while inventory turns have increased from 4.5 times per year to over 7.0. We have also been able to better value-added costs, a growing part of our operations. This was accomplished using the Inventory and Purchasing modules.

The Sales Order Entry module streamlined the entire order entry process from generating an order, shipping the material, to adjusting inventory and then billing the customer. The MTR’s (Mill Test Reports) are flagged and printed automatically with the MC File imaging module making the personnel intensive task of handling MTR’s much faster and easier. Once flagged, the MC Fax module allows you to fax them directly from your PC.

Implementing a New System

Implementing a new system is never easy and this was no exception. However, careful planning and training can minimize the learning curve. A technical representative from Compusource came on-site for the installation and initial training. The install went on without a problem. The first two months using the system were rocky, according to Terry; "things were a little difficult at first but, with the help of "Hotline" technicians we were able to get through the learning curve without too much mental anguish. The two major mistakes we made in implementing a new system were: 1) not realizing the individual impact change would have on our employees and 2) not fully anticipating the impact the new system would have on individual workflow and paperwork processing. The first problem could only be resolved through training and day to day support. The second was resolved after establishing new policies and procedures. We reached a comfortable proficiency level by our sixth month and after a year we could not believe we did it any other way.

Implementing a new system does not ensure future success, but it does provide the tools for evaluating alternative paths to improving operations.