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has 4 core pillars, which you all are likely
familiar with.
1.
Process Efficiencies and Productivity. It
should be no surprise to anyone that
efficiency is one of our key pillars. You
have undoubtedly been affected by our
efforts here. Perhaps your branch has
experienced a lean event with our oper-
ational excellence team. Maybe you’ve
witnessed jobs evolve, or even certain
tasks be automated. You’ve definitely
seen our drive for digitalization, both in
the sales process, but also in our back
office and administrative work. While
we understand that efficiencies can
mean change, and that change can be
uncomfortable, becoming more efficient
is essential to our sustainability as an
organization. We must leave no stone
unturned as we continuously search
for ways to improve processes, create
efficiencies, and increase productivity
across the company. underused machine taking up a bay, or
a talented employee with nothing to
2. do? The answer is simple: very little! We
Product Mix. Our profits are directly must ensure that we are using all of our
impacted by the margins of the various capacity – equipment and people – to
products we sell. This is what I refer its absolute fullest. By implementing a You may be
to as the “Mix Effect.” Every Kloeckner tactical commercial strategy that focuses
branch needs to capitalize on their specifically on filling unused capacity, wondering,
strengths, while also leveraging higher we will generate accretive volume and why start a
value added products and services. As gross margin dollars that will flow direct-
an organization, we’re striving to hit ly to the bottom line. Additionally, as we newsletter?”
upward of 40% of our gross profit to be create more efficient processes, we will
driven by higher value-added business create even more capacity, which in turn
(HVAB). By focusing on HVAB, we will can drive even greater financial gains.
not only increase our average margins,
but we can also reduce exposure to the 4.
market price volatility that continues to Inventory Velocity. Traditionally, service
run rampant in our business. If you’re centers have held ample, if not exces-
unfamiliar with some of the products sive, inventory on hand. It may feel
and services offered by different branch- safe to have a lot of material “just in
es, I encourage you to reach out to TEAM case we need it.” And Kloeckner has
members in those locations or to one of formerly held that same belief. But,
our many product experts around the that is an unnecessarily expensive way
company. to do business and is an extremely
risky proposition when operating in
3. a volatile price environment. The fact
Capacity Utilization. What’s more costly is, we have already made incredible
than an unused truck on the lot, an progress in managing our inventories

KMC NEWSLETTER 5