Bidding farewell to the middleman

May 1, 2000
One metals distributor subtracts the supplier bidding process from on-line transactions and adds an entirely new level of customer service.

One metals distributor subtracts the supplier bidding process from on-line transactions and adds an entirely new level of customer service.

While an exact price is quoted later in the ordering process, with after-tax and delivery charges calculated, the shopping cart screen acts as the purchasing order for the user, documenting the type, quantity, and estimated price of materials selected.

As the main menu shows, in addition to ordering and tracking orders, e-metals users can purchase previously saved quotes, create their own list of frequently purchased items, or review their purchasing history.

When conducting an item inquiry on the EMJ site, users can specify shape, material type, thickness, and grade, among other characteristics.

Item inquiry results document the availability of a particular item and which of EMJ's 28 regional service centers has it in stock. This page also gives users the option of searching for the same item in a smaller or larger size.

Purchasing metals on-line has become fairly commonplace, but it's still a complex process. Buyers not only have to contend with a vast selection of new materials, but also an abundance of sites selling them. However, a new on-line serice is offering relief, letting users reap the benefits of competitive pricing without having to spend time chasing down supplier bids.

The "e-metals" site, developed by EMJ, a metals distributor based in Brea, Calif., has eliminated the auction-style bidding process that many other sites use, drastically reducing the time it takes to complete on-line transactions. Users simply log onto to inquire about the availability of metal products, stipulate specific characteristics, and place and track orders.

Since its launch last August, the site has registered over 3,800 users. And EMJ's on-line sales, which continue to grow by 35% each month, well surpassed the $1 million mark this March.

Given the surplus of metal supply websites these days, how does the company manage to lure and retain its customers in spite of intense — and growing — competition?

"It all comes down to customer service," says one midwestern purchasing manager. "Some metals websites offer a huge array of products and have a tremendous supplier base, and that's great where buyers like myself are concerned. But there are times when these sites grow too large, too quickly. Under circumstances like these, not only do many systems become mechanically incapable of handling a flood of requests, but the companies have a tendency not to respond to your requests as promptly as all parties involved would like," he remarks. "Ultimately, then, what's advertised as a timesaving service for the customer becomes more of a disservice."

These reasons are exactly why EMJ designed e-metals to operate as a transaction and service-oriented site. As opposed to the traditional auction and reverse auction-style sites that dominate the marketplace (where customers request materials, allow suppliers and/or distributors to enter a bid, and customers select the best bid), EMJ's site lets its customers view over 30,000 products, skip the bid-ding process altogether, and place orders in real time, explains Mark McWhirter, EMJ's vice president and chief information officer.

"The e-metals website lets EMJ work directly with customers and their individual specifications," McWhirter says. "Shops can make selections based on shape, size, and grade of metal, and they can see plant inventories in real-time — "right down to the pound or foot of what's in-stock," he reports.

Alternate metals websites, McWhirter says, function more as intermediaries between customers and suppliers. He adds that several of these sites don't let customers order on the spot, and more often than not, there is a lapse between the time the order is queried to the time suppliers actually bid on the order. And just as in conventional bidding processes, the sites don't always provide crucial inventory which frequently results in a several-day delay in the processing and shipment of orders.

Debbie Kelly, manufacturing planner and scheduler for the Lokring Division of Thermosealed Castings, Burlington, Ont., a manufacturer of specialized pipefittings, says that in addition to being time consuming, her previous methods of ordering metals products left a lot of room for error and put her at the mercy of paperwork and fax machines. They also made it hard to track down materials she needed and change or track down orders once they were placed.

Kelly has been using the e-metals website daily for the past six months. "Previously, I constantly had to follow up with suppliers (including EMJ) to ensure my orders were in stock. Then I had to keep in touch with them to see that the orders arrived on time. Overall, I spent quite a few hours on every order," she says. Kelly adds that it now takes five minutes to go from logging onto the site to actually completing an order.

Customers like Kelly, who regularly purchase the same item, can store data about their frequently requested selections in their 'favorite items' menu. This function lets them reorder these materials without re-conducting a search. Likewise, once customers access part numbers that correlate with EMJ's items, they can easily establish cross-references. This lets them place orders and check inventory availability simply by referencing part numbers.

Getting particular
McWhirter insists ordering is just as easy for new users. Once they log onto the site, shops can use an item search function that queries users on features like type, shape, size, grade, and length. Because there is no standard item classification in the metals industry, EMJ developed an easy-to-use form that helps users narrow down their searches.

"This way, customers can be as specific as they need to be when searching for a product," McWhirter says. "For instance, they can narrow their search from bar to stainless bar. And then they can narrow that search even further by asking for 4-in. stainless bar, and then 4-in. stainless round bar, and so on."

Once an item search is complete, all in-stock EMJ items matching the search criteria are displayed in real-time, including all information on grades and specifications. The site also lists how much of the requested material is available at the EMJ location closest to the user. However, if that location does not have the material or the necessary quantity of material, the system conducts a secondary search of all EMJ's 28 regional service centers. It then lets the user know how much product is available nationwide.

"In other words, if one of our plants does not have the quantity or exact grade or style the customer requests, it is still possible to access the material using an express shuttle system that ships between plants," McWhirter says. The site also documents any incoming inventory from mills and whether remnants are available.

But at what price?
While the service is free for customers, with no hidden costs or transaction fees added to the invoice for using the service, shops have to have an account with EMJ's credit department to place an order and obtain pricing information. If users do not have an existing account, they can open one on-line at the time of purchase. Only then can they select items and proceed to the order specifications menu.

There, customers define the quantity desired and the unit of measure, which can be practically anything from pounds, feet, and inches, to square inches, hundred-weights, kilograms, and so on. They can also enter cut-length specifications as well as shape specifications for plate and sheet. At this point, the site notes any further instructions, thereby ensuring correct order fulfillment.

Like other e-commerce websites, e-metals customers proceed to a shopping cart area, where the bill is computed. If they wish, they can then head to the checkout or conduct another search for additional items.

Checking out
Once all the queries are answered and the ordering is complete, users proceed to the checkout. Here they receive their default ship-to information, which can be changed if necessary. At this time, they can also request test reports for the ordered materials.

These test reports are formatted to consistently present vital information and, when available, an image of the actual mill test report. This means that shops don't have to file and keep track of hard copies — instead, the reports are available on-line 24 hours a day, 7 days a week.

Upon completion of the transaction, the site provides an order summary, which can be reviewed for accuracy and printed for reference.

The site's order status and tracking features let users input criteria such as date ranges, customer part numbers, and customer purchase orders and search for any open or pre-existing orders. Buyers can then follow their orders, in real time, through each stage of the fulfillment process — from the time processing begins and the order is sent to the plant to the time the material is staged at the loading dock and loaded on the truck.

If required, buyers can also access images of the signed proof-of-delivery documents. For accounts-payable purposes, this can eliminate phone calls and faxes to EMJ's credit department.

As an added benefit, users can also document purchasing history and obtain summaries on raw material usage without requesting the assistance of EMJ personnel. Again, this speeds processing and shipping.

"Many customers operate under strict time constraints, and it's not unusual for customers to want delivery the next day," McWhirter says. "If that's the case, they don't have time to wait around for bidders to reply. Purchasing agents need to know immediately if they can get their hands on the material they need, and e-metals gives them that luxury."