Service Centers
Wednesday | 18 February, 2009 | 5:43 am

Service in no time flat

By Lauren Duensing

February 2009 - Good, better, best. First, second, third. In business or in life, the line separating the good from the best and third place from first can be as small as mere tenths of a second. There’s nothing inherently wrong with taking third place, but in today’s market, security comes from striving to be the best.

In our August 2002 issue, Modern Metals featured several innovative companies, including Cleveland Metal Exchange, Cleveland, a distributor of stainless and aluminum flat-rolled products. Since that time, the company has grown into a regional-based service center that conducts business throughout North America. It emphasizes growth in tons rather than sales dollars, which helps it maintain stability in an unstable market.

"Our flat management structure allows us to stay flexible and conduct business on a national scale while maintaining our entrepreneurial spirit, which has been the key component to the success we have enjoyed," says Randy Horvat, founder and owner of CME.

Jeff Haas, vice president, says many current and potential customers ask how the company can promise to accomplish the same things that are often reserved for much larger companies. "The opportunities for the smaller guys come from reacting quickly in a fast-paced, changing market," he says.

"We have tremendous relationships with our suppliers, and we all have face time with our customers," Haas continues. "This is one of the ways we’re able to go out and compete. We’re small, we’re nimble and we’re able to react quickly to market changes. We want customers to feel they’re getting the best service and the most reliable information."

As the company has grown, giving customers the best service has led to the addition of in-house processing. In its 120,000-square-foot warehouse are four slitters, two cut-to-length lines and eight shears. In addition, all equipment is compatible with the company’s expansion into stainless steel flat bar and aluminum flat-rolled products. This allows CME to offer a one-stop shop for customers and continue to keep costs low.

"The fact that we process more than 90 percent of [our] material in-house gives us the ability to ensure timely shipments and quality products at a competitive price," says Horvat. "If need be, I can shut down my whole warehouse for a customer. We can control the material coming in, and we’re able to have our people’s eyes on the metal when there’s an issue."

Building a future
Prior to June 2008, the company was run primarily by Horvat with assistance from Haas. To further the company’s growth ambitions, in May 2008, Horvat and Haas connected with industry veteran Jim Stephens, who was vice president of stainless steel for Ken-Mac Metals, Cleveland, one of North America’s largest flat-rolled distributors. In his 26-year career there, Stephens oversaw the development of stainless steel from a minor product to one that represented a major portion of the company’s total sales. Stephens, however, still prefers a small, entrepreneurial atmosphere and, as a result, he fit right in with the team at CME.

"One of the greatest advantages within our organization is that we don’t have so many layers of management," says Horvat. "We’ve created scenarios where we’ve entrusted our people with the ability to make quick decisions."

"With the diversity of the market and the speed of the market, we need to move quickly," Stephens says. "Because of my years of experience, I know what the customers are looking for. They want to deal with someone that can give them the answers, someone who’s flexible and someone that can work with them."

"It’s leadership, it’s proven ability and it’s credibility," says Horvat. "It’s understanding how to grow a company. We want our customers to know that we intend to bring the best possible people in the industry to help them succeed."

A passion for people
A company’s employees are its backbone in a service industry. Cleveland Metal Exchange has built its growth on an aggressive approach, and in that time, every employee has worked tirelessly to foster relationships with customers and suppliers.

In just a few years, stainless steel distributors have been required to be nimbler in the marketplace. They not only must have experience with the 300 and 400 series stainless but also need to stay in touch with the many new grades offered globally. The team at CME says these alternative grades help its customers stay competitive in a changing global market.

To achieve success in these types of products, as well as aluminum flat-rolled products, Horvat and Stephens knew they would need some outside support, which came from Drew Zamiska, who has worked with Stephens for many years.

"With the energy and enthusiasm of this management team, selling has become fun again," Zamiska, a sales representative for CME, notes. "My longtime customers are impressed with our aggressive approach."

"Most of my sales staff have been with me from the beginning and are just as passionate about this business as I am," Horvat says. "We’ve tried to create an atmosphere that fosters a family environment. We realize that all of our employees have families, and at the end of the day, that’s what’s really important in life. While our goal is to build our business and to do so profitably, our first obligation is to our families, both at home and here in the office."

Rick Matousek, a salesman at CME, agrees. "CME is more than an enjoyable place to work," he says. "My co-workers and customers are my friends, and we’re all working together to achieve the same goals."

The family focus helps keep employees grounded, but it also allows CME to maintain a rapport with its customers.

"Our family-first approach translates well to customers," says Haas. "We feel passionate about our customers and want them to succeed. We were kids when we started. Over the years, we’ve acquired a certain level of calmness. It’s come by virtue of being in business all of these years. We’ve seen the trials, the challenges and the problems. They say the past creates the future. We now know how to go out and deal with it."

And with more customers requiring their suppliers to think outside of the box, Haas has developed a strategy he calls "application selling." He says it focuses on building bridges with customers and trying to give them the product at the lowest cost with the highest quality that meets their needs.

"It’s not just about selling that coil of steel, it’s about establishing that relationship, that bridge, by speaking to that person and finding out exactly what they’re making."

Concentrating on application selling has allowed CME to adjust to a changing market. "In the past, customers have been willing to make commitments for six months, a year or even longer," Haas notes. "However, in today’s volatile market, customers are willing to place three-month blankets instead of traditional one-year contracts."

This shift has led to more contractional-type business for CME. The company’s roots are based in transactional business, and as a result, Haas says the company’s diverse network of suppliers and customers gives it the opportunity to receive a wide variety of products. Currently, the company has about 60 percent transactional business and 40 percent contractional, and it plans to expand that further with the addition of Stephens.

Dotting the Is and crossing the Ts
CME’s still young. The company will be celebrating its 15th anniversary this year and sticking to its guns when it comes to its business philosophy. "We know that we’re the low-cost supplier for slitting and cut-to-length," Stephens says. "Everything’s gone global. What a customer wants today could literally change tomorrow. We’ve started to add up our years of experience, and we have within the industry more than 200 years of experience and still have the same young-gun mentality. We have the rare hands-on approach that allows us to react fast and move faster than some of our larger competitors."

"We don’t sit back on our heels, and we’re not comfortable with status quo," Horvat says. "We make quick decisions, and we’re always willing to adapt to change." MM

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