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MCN Profile: Kimco Steel Sales

Flexing ERP Muscle

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MCN Editor Beth Gainer Disappointed with its outdated ERP system, Kimco Steel Sales Limited found a system that was a perfect fit for the service center’s needs.

Family-owned Kimco Steel Sales Limited, Kingston, Ontario, had a problem with its ERP system. Not only was the 20-year-old system outdated, but it was geared toward coil and flat-rolled mills and plants instead of the kind of business Kimco is – a structural steel service center with a scrap metal business.

Despite regular tweaks to this system over the years to meet his company’s needs, Executive Director Cody Rosen – a fifth generation of Rosens to work in the business – decided that Kimco needed an ERP overhaul.

“Our business was changing, and we needed something different. We needed an ERP system to have the flexibility to be used in a multitude of ways,” says Rosen. “It was time to implement something new at Kimco to increase what I call ‘our ceiling’ on what an ERP system can do to help our company succeed – from traceability of our inventory, to purchasing tools, to forecasting, to reports, to shipping, etc. These increased functions can really take our company to the next level.”

“The lifeblood of our business is traceability of our inventory. Tracking it from not only when we initially acquire it, but when it’s here going through the value-added process of our business,” he continues. “As much as we are a warehouse, we also add value to our products. A huge part of our business relies a lot on the system for its ability to not only trace inventory when it comes into our stock, but follow it throughout the entire order process.” He adds that Kimco also relies on a transport plan to help organize the timing of shipping finished steel. Rosen also wanted a more effective system to replace the current tedious keystroke- and data entry-heavy system.

Knowing what Kimco needed, Rosen met with his father and co-worker, Gregg Rosen, about finding a new ERP system that better met the company’s needs. His father told him, “‘OK, I’ll leave it to you; you’re the young buck. Go ahead, and do what you’ve got to do,’” recalls Cody Rosen.

With his dad’s blessing, Rosen and his four-employee task force set out to find a more suitable ERP system.

Enter iMetal.

Developed by Jonas Metals Software, iMetal is an ERP system designed to help companies with a variety of functions – from invoicing to integrating the software into financial packages to tracing inventory. Jonas is headquartered in Wallingford, Oxfordshire, England, with a location in La Palma, Calif.

iMetal is a chameleon of sorts, offering flexibility to various types of customers depending on their needs. “What makes iMetal different from many systems is it supports so many different types of metals [businesses] – from aerospace alloys to scrap dealers,” says Jonas’ CEO and Director of Global Operations Leigh Harrison. “And because of that range, there’s an enormous amount of functionality. The guys who do the implementation will reach into a tool kit and say, ‘Okay, let’s try that then instead and see if that works for you’ without us having to rewrite software.”

iMetal’s flexibility allows clients to use their existing accounting and financial packages, such as QuickBooks and Sage. This can save the costs and training time required for a brand new system. “Quite often when people are looking at an accounting and financial package that has been written by the software company, [the software] is unique,” says Harrison, adding the company then has to spend time training employees on a brand new system. Conversely, iMetal allows clients to keep and maintain their current systems.

With years of experience in the metals industry and in implementing metals systems, Jonas staff tailored the ERP system to Kimco’s many needs, including inventory traceability, improved productivity, speed of process of inquiries and orders, better use of staff, as well as allowing employees of various skill levels and experience to use the same system.

Implementation and Training
The project took approximately two years from installation to completion. The original plan was for iMetal to go live September 2019, but a few delays caused the system to go live February 2020, just one month shy of Canada’s COVID-19-related shutdown. “If we had taken any longer, we would’ve hit the pandemic, and I don’t think we’d be live today,” says Rosen.  

Kimco encountered a major hurdle: two individuals on Rosen’s original task force left the company halfway through the implementation. “Two of my key go-to people, my shoulders to lean on, who were the driving force behind the implementation process, left. They were my project leads,” he says.

Harrison and his team stepped in to help. “Kimco had a gap in their planning and their resources, so we filled that with a resource from inside their business,” says Harrison. “We took over that role ourselves. We wanted the project to be successful.”

Rosen appreciated the help. Even though Jonas was in the UK, company reps came over a couple of times to help with the implementation and share their knowledge. “They knew what they were doing,” says Rosen.” I’m really glad they were there to help us through it.”

Training Kimco staff was organized and methodical. Each of the company’s departments sent one or two employees at a time – Kimco dubbed these individuals as its “champions” – to be trained via Zoom by Jonas staff. The champions then trained the rest of their departments’ staff.

Juggling day-to-day business during implementation and training was also a challenge for the Kimco team, but thanks to their dedication, they were able to conduct business smoothly while implementing iMetal. “When you go live to a new system, you want to make sure your day-to-day operations and your customers don’t suffer because you have a new internal system. They can’t know the difference,” says Rosen. “I’m glad we took the extra time we needed to make sure our business and our bottom line didn’t suffer.”

Harrison says the Kimco team made the installation, implementation and training processes easier. “They were very open-minded, innovative in their ideas, and they worked hard to make sure the processes we proposed would work well for them,” he says, adding the Kimco staff took ownership of the project and were honest about what would and wouldn’t work. “Cody was involved in everything and supported his people throughout. He was very enthusiastic about everything,” he says.

“The relationship with Kimco is built on mutual trust. They trusted us to deliver a good result for them, and we trusted them in terms of them being honest with us about their requirements,” he continues. “Cody had a vision of where he wanted to get his business to, and when somebody’s got that vision, we can enable them to get to that place.”

Look Beyond the Sizzle
Harrison says many people looking for an ERP system get fooled by all the bells and whistles of fancy-looking systems, only to be disappointed and not realize a return on their investment. “They buy the sizzle rather than the actual core product,” he says. “We’re a little bit less sizzle and a bit more sausage. We’re not particularly flashy, but we know what’s important, and we make sure our proposition delivers the return on investment folks are looking for.”

In fact, his advice for those shopping around for ERP systems is to “look beyond the sizzle. It’s the depth of functionality that you need to get into,” he says. “[Some other system] might have a nice reporting module and nice sales front end, but it doesn’t actually track the metals price successfully, or it doesn’t do replacement costing, or it can’t do process scheduling. Look at the details. You’re going to spend a lot of time and money implementing it, so make sure you get that level of detail correct.”

For businesses considering an ERP installation, Rosen recommends that all staff exercise patience and that decision makers should get some key people invested in the installation. Once they are invested in the project, then other staff can get on board to make the implementation a success.

Harrison acknowledges the skilled, experienced Jonas staff is at the heart of the company’s success. He believes potential clients trust the ERP business’ staff. Customers want to know the staff behind the ERP system cares about them and are vested in their success.

“The important thing for us is getting a successful project and a successful partnership because most of our customers have very long tenures with us,” says Harrison, “so for us, getting that first bit right means we lock into a long-term partnership. Our aim is to deliver a product that works for non-IT people. We work hard to get it right.”

And Jonas got it right, according to Rosen and his team at Kimco. “We’re already starting to see the benefits of switching to a new system,” he says. “Jonas has done a great job; they know what they’re doing and will hold your hand throughout the whole process. Their goal is to be able to have you go live without a hitch, and they make sure they get you over that finish line so that when you turn the key day one on the new system, you’re ready to roll and the business can function.”

Rosen knew iMetal had excellent functionality that would stay relevant for many years to come and that Kimco wouldn’t need to do another ERP implementation for a long while. “You only want to go through an implementation like this maybe once or twice in a lifetime,” he says. “You want to make sure [the system] will work for you.”

The Market for ERP is Growing
Larger service centers often invest in ERP systems, but many medium-sized companies haven’t really seen information technology as a way to improve their business, according to Leigh Harrison, CEO and director of global operations at Jonas Metals Software. The company is based in Wallingford, Oxfordshire, England, with a location in La Palma, Calif.

However, Harrison notes a sea change, as more and more medium-sized businesses are “looking to be more efficient in terms of handling data and transactions,” he says. “As they’re growing, instead of employing more people, they’re looking for ways to maximize their productivity and at the same time it’s a requirement that they’ve got to analyze more data to make sure they’re making the right decisions. The world’s changing.”

He attributes this change to several reasons, one of which is that distribution businesses are getting more complicated and sophisticated. “Now they’re more involved in downstream activities,” he says.

Artificial intelligence software is now making its way into the metals sector. “Systems are creating workflows for people, and they’re automatically moving people through the system and doing things that a human being would normally have to do,” he says, adding that medium-sized businesses need as much information as possible in terms of client requirements, stock levels and automatic forecasting.

Harrison believes that ERP systems will continue to grow in metals distribution centers and will permeate down to smaller customers. “I think the smaller customers in some ways are using the system smarter because they react quicker because the owner or manager is looking at the data to make that decision very quickly, and therefore, we start to see them invest in [ERP] systems much more,” he says. “We’ve seen a growth in the small to mid-sector that people are actually increasing their business levels because they are quick and nimble and able to make fast decisions and look at supply, but those customers will continue to develop, and we’ll see more sales from that.”

“Our business was changing, and we needed something different. We needed an ERP system to have the flexibility to be used in a multitude of ways.”  Cody Rosen, Kimco Steel Sales Limited

Caption: A peek inside Kimco Steel Sales’ structural tubing runway.
(Photo Courtesy of Suzy Lamont Photography)

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