Ta Chen International focuses on developing a comfortable working relationship with customers

August 2012 - Having the material customers need when they need it is important to Ta Chen International Inc., Long Beach, Calif. The company prides itself on the close bonds it develops with service centers and supply houses.

“We work closely with our customers,” says Fred Nummela, Midwest regional vice president at Ta Chen. The company is a master distributor of stainless, aluminum and nickel alloy coils, sheet, plate, long products, tubes, and PVFs, but it does not sell directly to OEMs or end users.

“That makes the service centers and the supply houses fairly comfortable to work with us. They share a lot of information,” Nummela says, noting Ta Chen representatives sometimes accompany their clients on calls to end-user customers.

To keep up with its clients’ changing needs and ensure availability of in-demand material, Ta Chen must continually add products and expand its facilities to house more than 20,000 SKUs. The company currently has approximately 185 million pounds of material among its eight facilities in the United States, says Rick Barbitta, branch manager for Ta Chen’s Gurnee, Ill., and Cleveland locations.

Ta Chen entered the U.S. market in 1989 and now has more than 3,000 customers. “Since we have opened up, we have continued to expand,” says Nummela. “It started with the pipe and the fittings, then they expanded into stainless flat roll and brought in stainless long products. As time continues, we add more and more items to round out the whole package.”

Customer feedback has a large influence on which products Ta Chen chooses to add to its inventory. Recently, the company added hollow bars, or seamless instrumentation tubing, as a result of a client’s need.

“We are probably adding a couple of things every year,” says Nummela. “We’re always adding sizes.”

Plans to expand

As Ta Chen grows, the company needs to ensure it can store the material and access it efficiently. Most of the company’s eight locations throughout the United States are undergoing changes to gain space or use existing space more efficiently.

The expansions began in Los Angeles, which will receive a new headquarters facility, says Nummela, and the Cleveland facility is growing from 87,000 square feet to 113,000 square feet. It also is adding new racks to accommodate larger items and coil product.

Instead of adding square footage, other locations are reorganizing material storage. For instance, the Houston location is in the process of re-racking its flat-rolled items.

“Re-racking is a more efficient utilization of the existing square footage by increasing the height of what you store so you can get more material per square foot because you’re expanding up instead of by width and depth,” says Barbitta.

In August, the Atlanta facility is bringing in new racks and side loaders. The racks will be taller and closer together. “They’re using the vertical warehouse space, rather than the wide aisles and dead space,” says Nummela. Revamping a facility in this way provides additional storage capacity at a lower cost than a full expansion, he notes.

The ongoing expansions, which have been taking place throughout the economic downturn, are part of CEO Robert Shieh’s plans. “He’s been more aggressive when the market is struggling,” says Nummela, noting the strategy is to be ready for the next upturn by preparing in the downturn.  

Even though its facilities are undergoing various growth plans, Ta Chen’s customer service has not been interrupted. “For the most part, we are able to [expand] seamlessly,” says Nummela. “The last time we moved [the Chicago facility], we were able to set a record month while we were moving. It is planned out well and there really isn’t a hiccup with it.”

Changing racks, as the Atlanta facility is doing, likely will take three to four weeks of pulling material, putting it into stacks, bringing the new racks in and moving the material back. “When you’re doing that, you’re filling orders. You’re scrambling trying to find where you put new materials,” says Nummela.

Looking forward, additional expansion is not out of the question. “Ta Chen over the last decade has grown tremendously,” says Nummela. “I don’t think any of us envisioned the growth we’ve had.” MM

Logging on

Part of Ta Chen International Inc.’s customer service model involves being available to clients at all hours of the night and day via the Internet. The company does more than 80 percent of its business online, according to Fred Nummela, Midwest regional vice president at Ta Chen.

“The company has grown tremendously since the Internet went in 10 years ago,” he says. “We don’t have to add sales people. We’re running in Chicago with the same number of people we ran with eight years ago and our business has gone up. The Internet is very big.”

Companywide, Ta Chen has less than 50 salespeople. Online ordering enables the company to handle many more customers at a single time than those individuals could on their own. “You can see how many customers are [online] at any given time. We’ve had over 300 customers on at the same time on the system. There’s no way that less than 50 salespeople could handle that many customers,” says Nummela.

Each Ta Chen customer has access to an individual account. Customers can shop at any time. “We’ll come in on the weekends and see people are shopping, and we’ll come in on Monday and there’s a pile of orders to process through,” says Nummela. Customers can see details on the Web including where specific material is located, how much material there is nationwide and sorted by branch. They also can look at test reports for any pound of material available around the country.

One full-line stainless steel distribution company, which has sourced material from Ta Chen for nearly 20 years, uses the distributor’s online ordering system to place approximately 95 percent of its orders. As a long-standing customer, the company cites material availability and streamlined, fast service among the primary reasons it continues to do business with Ta Chen.

“Market fluctuations can make material availability a critical issue for companies like ours,” says the president and CEO for the stainless steel distributor. “Ta Chen is able to maintain a consistent inventory despite market fluctuations.”

The company sources about 90 percent stainless steel and 10 percent aluminum from Ta Chen. “We perform a number of unique value-added processes to much of the material we procure from Ta Chen before we ship it to fabricators,” says the president. “The ability to order materials online is easy and convenient. Ta Chen really started the trend of online ordering for our industry. Other companies are now following their lead. With the online service you don’t have to wait for a phone call or feedback on inventory availability. This has shortened our lead times and allowed us to improve our customer support.”

The distributor buys the bulk of Ta Chen’s product offerings including round flats, pipe, tube, sheet and plate. “They don’t offer any shapes that we don’t buy,” says the president. Ta Chen’s competitive pricing also is attractive to the distributor because “we source material daily—by the truckload,” he says.

Internet ordering is becoming more prevalent in the metals industry, though the steel industry has been slower than others to adopt it, Nummela says.

For Ta Chen’s Chicago location, the Internet orders help the company serve two time zones. “It makes us available 24/7 to the people who would normally have to wait until 9 a.m. their time to speak to somebody,” says Rick Barbitta, branch manager for Ta Chen’s Gurnee, Ill., and Cleveland locations.

Lynn Stanley, senior editor, contributed to this feature.

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