Arming customers with information brings a surge in business for Majestic Steel
February 2012 - Manufacturing is a cause-and-effect industry. As economic situations improve or fizzle, businesses are forced to ramp up production or nullify operations. The economy is in a delicate state, and cautious optimism is affecting businesses around the globe. At Cleveland-based Majestic Steel USA Inc., the company keeps its inventory stocked and customers informed, promoting commerce and meeting growing demand head-on.
“Steel is steel,” says Richard Gray Jr., vice president, Gray Metal Products Inc., Avon, N.Y. “How you sell and market it sets you aside.” Gray says Majestic is well-run, informed and shares information with its customers. “Majestic doesn’t wait for customers’ suggestions before making changes; they are proactive and look toward the future,” he adds. “They know what they’re doing now and what to expect in the next four to five years.”
Understanding the economy and the industry marketplace requires keeping up with technology. Majestic launched its Unravel flat-rolled steel calculator mobile app in October 2011 and released version 2.0 in late January. “Unravel allows users to make complex steel calculations (e.g. coil weight, coil yield, sheet bundle count, cost per linear foot, etc.) with an easy-to-use mobile app,” says Tom Innis, director of corporate relations at Majestic. The app is free and available for download on Apple iTunes, which Majestic links to on its website.
Majestic continues to develop its Majestic Steel Research tools, building more effective channels of delivering real-time information to customers, says Innis. The Majestic website intends to evolve “with the objective of being a go-to site to access steel market information,” he says. The Unravel app will be followed by other mobile tools the company plans to release in 2012 and in upcoming years. Innis says social media also will be emphasized, “delivering meaningful content to the marketplace.”
Navigating the industry
“Majestic is uniquely positioned in the steel supply chain at the intersection of supply and demand, thus our visibility of steel market dynamics—from raw-material input costs to end-use market demand—is enhanced,” says Innis. “For years, we leveraged this visibility to our benefit from a purchasing and inventory-management perspective.”
John Griffitt, president of WSM Industries Inc., Wichita, Kan., believes 2012 will be a better year than 2011 and better than 2010. “We depend on Majestic. They were and have become more of a dominant player in our industry because I think some of their competitors have consolidated, reducing inventory,” he says.
WSM Industries purchases material by the truckload, and Majestic is able to ship directly to WSM Industries’ customers or ship sheet coils to WSM Industries’ facilities directly, a crucial component to its business. “We sell to mechanical contractors, heating and AC and mechanical contractors that do schools, churches and hospitals,” says Griffitt. “With uncertainty of the market over the last few years, we can depend on them and keep our own inventory lower. We really depend on them a lot now.
“They treat us like an extension of their company,” Griffitt continues. “If we get an order or our customer needs it shipped today or the next day, Majestic makes it happen.” Griffitt says trucking can be problematic when material is needed in a hurry. “But Majestic works with some of the best truck lines. They get the right material there at the right time. We never have issues,” he says.
Majestic’s inventory offers customers flexibility, allowing them to take on expedited orders they ordinarily might not be capable of producing on time. “A lot of companies have reduced their inventories,” Gray says. Gray Metal Products, which provides prefabricated air ducts and fittings, often has large orders to fulfill. “Majestic is carrying maybe two to three weeks of inventory—they’re not trying to pre-sell and have their inventory all pre-sold, they are reinvesting in their business, and you don’t see that a lot in today’s economy.” Gray adds he is a “truckload buyer,” needing anywhere from 25 truckloads or more with short lead times.
“If I take on a huge account tomorrow and I need extra loads, I can get it from Majestic,” Gray continues. “I use them for regular, huge-tonnage orders, and they are willing to stock and hold materials, shipping to me when I want it.” Gray says the company does future orders as well as just-in-time material. “If my inventory is large on something or the foreign material coming in will be late or a mill is late on giving me my steel and I don’t feel comfortable with my level of inventory and I want 25 loads to make sure I’m covered, I know I can get the order fulfilled by Majestic.
“I can call and ask [Majestic] for five loads and say I need it shipped today and they’ll do their best to get it there tomorrow morning,” Gray adds.
The staff at Majestic studies the market, passing along findings to its customers—whether they use the information to purchase materials from Majestic or not. “Majestic has kept us price competitive,” says Griffitt. “They help us stay closer to the market. The pricing and inventory levels are much easier to keep.”
“Majestic has its finger on the pulse of the business,” Gray says. He stays informed of price increases or decreases by monitoring exchange rates and keeping track of the stock market. If prices change, Majestic ensures “customers know exactly why there is an increase or decrease and what they think the market will do in the future. They put this information in a Core Report and send this every week to customers,” he says.
“You ask them a question and they give you an answer, they don’t give you the run around or call you back later. They answer right away,” Gray says. MM
Investing in manufacturing’s future
For the last five years, Cleveland-based Majestic Steel USA Inc. and the NBA’s Cleveland Cavaliers have awarded scholarships to students currently pursuing or planning to acquire a degree in a manufacturing program. Four students will be awarded individual scholarships for $2,000. “This scholarship program ties very closely with our overall cultural commitment with the community,” says Tom Innis, director of corporate relations at Majestic. “It’s a way for us to do what we can to ensure a strong manufacturing industry in northeast Ohio.”
The Cleveland Cavaliers want to send the message that manufacturing is “yet another viable career option in northeast Ohio,” says Colleen Garrity, vice president, community relations, Cleveland Cavaliers. “We’ve been very lucky. In our five years, we’ve found a broad spectrum of people looking for this, ranging from kids out of high school to adults looking to go back to school, an overall very diverse pool of applicants,” Garrity says.
Even in a relatively short period of time, Majestic has seen great strides in terms of the types of scholarship candidates applying as well as their aptitude. By using connections through local high schools and the Cleveland Cavaliers, Majestic has attempted to tap into a new generation of manufacturing students. “Each year, we’ve been able to develop more momentum,” Innis says, noting the number and quality of applicants has increased “exponentially over the last four years.”
To reach out to students at 400 to 500 high schools throughout the area, the Cleveland Cavaliers bring in high school guidance counselors. “We can’t do this without Majestic—they are sending a strong message,” says Beth Stephano, senior corporate sales executive at the Cleveland Cavaliers. “It’s important we keep these types of partnerships strong with long-term results. We’re excited to work with them in the long term.”
Innis has worked in the manufacturing industry for more than 20 years and in that time, “the whole paradigm of the manufacturing employee has been transformed,” he says. “Workers carry out tasks but also apply their critical thinking skills, planning analysis—it’s a field that has expanded.”