bs report

The Steel Efficiency Review:From Product Sell to Service Utility

How Bluescope Steel-Sheet Metal Supplies developed the Steel Efficiency Review to get closer to customers.

Executive Summary In a highly competitive market where imported steel product is

squeezing margin and price buying is the norm, BlueScope Steel–

Sheet Metal Supplies (SMS) revolutionised its sales process by

creating a strategic service utility to make price irrelevant.

The Steel Efficiency Review (SER) was developed based on the

insight that within the Bluescope Steel business were people with

many years of knowledge, experience and an understanding of

manufacturing and processing.

This “knowledge capital” was used as the platform to develop

a strategic model of selling service and experience in a genuine

value-adding dimension instead of product for price.

This knowledge capital, delivered through the SER, provided

best practice recommendations to customers based on 7 key

operational areas – over production; time in waiting; transportation;

processing; inventory; motion and rework.

It also transformed the selling approach to one of customer

closeness and genuine understanding of our customer’s business

challenges, which developed trust and relationships right from the

beginning, shortening the revenue cycle substantially.

The results for our business so far:

• Since launch in August 2010 to February 2011, SMS have

conducted over 800 SER appointments from the 7900 target

businesses (10% lead conversion rate).

• Incremental sales volume has been secured from 206 customers.

• More than 7300 sales tonnes (~$10.2M sales revenue) have been

secured by SMS with 3241 tonnes already invoiced.

• The campaign objective of 6500 sales tonnes (~$9.1M sales

revenue) is on target to be invoiced by 30 June, 2011.

• A further 272 businesses fall into our “Work In Progress” stage;

meaning the SER process has been or is being conducted in

March-April 2011.

> Bluescope Steel–Sheet Metal Supplies Steel Efficiency Overview – Strategic Review and Results to date, April 2011

2

Besides the savings we identified for our prospects and existing

customers, one defining moment with a new customer occurred in

Victoria...

“A B2B business involved in equipment manufacturing was in

desperate need of cutting production costs without comprising

quality to ultimately deliver a more superior product to their

customers. SMS assisted the business via product substitution

and a change in product load volumes; changing the grade and

gauge of steel used in production allowed this business to save in

production runs and produce an even better end product.

More detailed recommendations followed in ‘forecasting’ and ‘just in

time’ approach to delivery for the client to ultimately win 100 per

cent of their business.

A great result for SMS and our new client!”

This strategy in all respects is a unique business model that will

provide our business with 4 business-changing benefits:

1. A real competitive advantage – no other business in our

category is offering this.

2. More opportunity to protect our margin – by not selling on

price we have greater opportunity to be more focused on value

pricing where our SER savings give us leverage for maintaining

margins.

3. Greater opportunity to get the “door-opened” for new business.

4. A new culture of selling has been delivered. We now have a

genuine sales approach that is all about the customer.

By starting with their needs, we are starting at the right place.

It has provided a platform to listen first, identify value and

become a genuine business partner, not just a supplier.

The report that follows provides more detail.


• A further 94 businesses are at “Proposal” stage; meaning an offer

is being made with a view to opening the account in March-April

2011.

• In total, from the 366 businesses - it is estimated a further 45 to

50 will be converted into SMS customers by 30 June, 2011.

The results for our customers’ businesses so far:

Our Steel Efficiency Review has identified major savings for many

steel processing companies across Australia. Here are some of

those results.

Over production: 32% of clients have opportunities to make savings in waste.

Time in waiting: 15% of clients have seen opportunities to improve their workflow, working capital and decrease their exposure to safety issues.

Transportation: 24% of clients have opportunities to improve productivity and reduce freight costs.

Processing: 18% of clients have opportunities to reduce excess waste amounting to greater production runs and savings in material cost.

Inventory: 36% of clients have opportunities to reduce delays and excess stock stored to remove the time wasted managing inventory.

Motion: 22% of clients have opportunities to reduce motion problems and safety risk.

Rework: 28% of clients have opportunities to reduce the number of rework resulting in significant savings in material cost.

3

Major savings identified:

Contents

1. Background – The Issue 5

2. Objectives 6

3. Marketing Strategy 6

4. Uncovering Key Insights and Opportunities 7 - Prospects - Inactive existing clients

5. Sales and Marketing Campaign Strategy 12

6. Results 13

7. Key outcomes that contributed value to the organisation 15

8. Summary 18

Appendices:Appendix One – The Steel Efficiency Review Appendix Two - Dun & Bradstreet Report Appendix Three – SER Success Stories

> Bluescope Steel–Sheet Metal Supplies Steel Efficiency Overview – Strategic Review and Results to Date

4

1. Background - The Issue

BlueScope Steel currently supplies approximately 75 per cent of the

total tonnage of flat steel products sold in the Australia and New

Zealand domestic markets. BlueScope Steel’s flat steel products

include hot rolled coil, cold rolled coil, plate and galvanized steel,

as well as branded value-added products such as pre-painted

COLORBOND® steel and zinc/aluminium alloy-coated ZINCALUME®

steel that have historically attracted premium pricing.

BlueScope Steel - Sheet Metal Supplies (SMS) is a business unit

of BlueScope Steel; operating throughout Australia servicing more

than 1,200 customers.

SMS offers flat steel products and services to customers serving the

Building and Construction, Manufacturing, Transport and Automotive

market segments throughout Australia. These steel products are

processed, packaged and delivered to customer / market expectation.

Recent years have shown increased competition coming from

imported steel players – mainly in the commoditised steel products

category targeting price driven customers. These products are largely

undifferentiated and offer little or no perceived differences between

competitor offerings. They are lowly differentiated steel products

with high levels of substitutability and straightforward price discovery;

comprising hot rolled coil, cold rolled coil, plate and galvanized steel

falling into the general manufacturing, automotive and transport

market segments.

There has also been pressure placed on valued-added branded

products such as ZINCALUME® and COLORBOND® steel –

targeting the residential and commercial building market segments.

This level of competition is diverse acquiring multiple channels to

market (direct to customers, via steel distributors, resellers, and key

processing providers) to win volume and increase market share in the

Australian market place.

The increase in competition in just about every product category

coupled with the ability for most customers to quickly and easily

seek out and compare all competing offerings has put a great deal

of pressure on SMS to strengthen its position and continually seek

ways to deliver greater value to our customers.

Our research showed us that our customers don’t rate “price” as

the most important factor in their purchase decision; customers

expect a competitive price and are prepared to pay a premium as

long as the difference is justified and offset in some form of value.

What became apparent from this research was that our current

approach to sales and marketing must now be reconfigured for

our business. This will put building customer relationships ahead of

pushing specific products or brands.

To this end, our sales and marketing approach will become customer

and market driven; making our products subservient to long term

customer relationships.

An opportunity now exists for SMS to improve returns, protect and

grow our position and create a level of differentiation.

To achieve this we will need to identify and devise ways to create

unique attributes and promises of value offered solely by us to our

customers and the Australian steel key market segments we serve.


5

2. Objectives Our marketing campaign objectives were to:

• Introduce a unique offering to compel our customers and sustain

a competitive advantage.

• Build awareness of the BlueScope Steel re-brand of SMS (July

2010 re-brand).

• Create new business for our sales team, through a full-service

and integrated marketing campaign.

Targets for the marketing campaign were:

• Generate a 10% lead conversion rate.

• Generate up to 6,500 sales tonnes (~$9.1M sales revenue)

incremental to SMS in FY2011 (up to 82 new customers purchasing ~

80T p.a.).

The marketing strategy was simple, yet focused - developed from:

• An underlying need for SMS to get closer to customers to better

understand their business challenges and needs.

• An urgent business need to grow sales volume by acquiring new

customers.

• An organisational requirement to better understand how to

displace imported steel and grow market share in select market

segments in Australia.


6

3. Marketing Strategy

4. Uncovering Key Insights and Opportunities

An External Research Agency Dun and Bradstreet (D&B) were

introduced to help us better understand our current customer base.

D&B discovered a 95% match with our total customer list and their

total database of businesses in Australia (over 460,000).

This meant 95% of our customers were on D&B records – providing us

an external source of customer and market information.

As a result a D&B report was produced outlining some key findings

to empower SMS to:

• understand clients by value, penetration, total spend and key

segmentation variables such as location, industry, size and risk

of financial distress;

• understand if you are negotiating service agreements at the

most strategic level; and

• maximise revenue growth and reduce spend through more

targeted campaigns and strategies.

See Appendix Two for the full D&B report.

Introducing the Steel Efficiency Review (SER)

Our customers already understood the rational benefits of our

products and brands; therefore we had to introduce an offering that

would build and strengthen our relationship with these customers

and prospects alike.

From our research we uncovered our key customers were looking

to their suppliers to become their partners and trusted advisors.

There was a real need to “reduce operational costs” and become

more “efficient” in a highly competitive market place.

Based on the principles of “LEAN” and the best practices of the

“TOYOTA WAY” we developed an offering we called the “Steel

Efficiency Review” or SER process. The SER was very similar to a

“financial health check” in the banking sector - it was created as

a survey by our sales people to better understand our clients’

needs, issues and operations.

This in effect reinvented our sales people as “consultants” to offer

a unique offering based on the discovery and examination of seven

key operational areas:

• Over production

• Time in waiting

• Transportation

• Processing

• Inventory

• Motion

• Rework

The SER would be performed in less than hour with a

report presented back to our clients with key findings and

recommendations for improvement. The link is then made back

to our key products and services – building trust and a stronger

relationship – before any steel is even sold and delivered.

For a more detailed view of the SER process - see Appendix One.


7

Prospects The key opportunities were for SMS to initially target 7448 D&B

listed businesses (likely prospects) who matched our current

customer base filtered by:

• key industry group

• by size (total revenue $M)

• location and overall credit risk rating (see Figure 1.0).

Inactive existing clients In addition to targeting the 7448 D&B listed businesses, it was also

a great opportunity to revisit over 300 customers who had not

purchased steel of SMS in over six months (our inactive clients).

These customers were credit tested to ensure viability. And a

further 75 SMS existing customers were identified to test the

offering and marketing campaign strategy (See Figure 2.0).


Figure 1.0 – # D&B Listed Businesses matching SMS customer base

D&B Key Industry Group # D&B Listed Businesses by Total Revenue $

667 730

Fabricated Metal Products 109 2366 2475

Furniture & Fixtures 18 860 878

Industrial Machinery & Equipment 106 1308 1414

Misc. Manufacturing Industries 27 868 895

Primary Metal Industries 54 508 562

Transportation Equipment 62 432 494

Total # D&B Listed Businesses 439 7009 7448

Electronic & Other Electric Equipment

Figure 2.0 – # SMS Target Customers

SMS Target Customers

250 302

# SMS Existing Customers 25 125 150

Total # SMS Target Customers 77 375 452

52# SMS Inactive Customers

In total there were 7900 businesses made up of 7448 D&B listed

businesses, 302 Inactive SMS customers and 150 existing

SMS customers to be targeted. And in the $5M+ revenue size

category 516 businesses were identified and a further 7384

$1M-$5M businesses were identified.

63

# D&B Listed Businesses by Total Revenue $$5M+ $1-5M TOTAL

$5M+ $1-5M TOTAL

SMS Customer by Total Revenue $

8

Marketing Outputs An integrated, multi-channel Direct Marketing approach was

deemed to be the most effective strategy to reach all 7900

targets. This included:

• Direct mail with phone/fax and website options for prospects to

respond to

• Telemarketing follow up

• Face-to-face visits

Two creative executions were developed for all targets falling into

the two revenue size categories – those in the $5M+ and those in

$1M-$5M.

It was decided the 516 $5M+ revenue businesses needed to be

approached differently to the remaining 7384 $1M-$5M businesses.

Direct mail

$5M+ prospects

Due to their size and scale, these businesses were sent a dimensional

and highly impactful Direct Marketing piece with a gift was developed

labelled the “3D Gift”. These businesses were also pre-approved for

a nominated credit limit to ensure seamless creation of a new SMS

account.


DM pack

9

Looking carefully into your steel processing with Sheet Metal Supplies can be very rewarding.

Steel processing is complex and capital-intensive, so we’d like to help you reduce costs and lift your profits. By looking closely at your production and processing lines, we can identify cost and time savings, remove bottlenecks, and make incremental changes which can translate into exponential profit improvements.

We would like to offer you a comprehensive Steel Efficiency Review: a survey of 7 key pre-production and processing activities that impact directly on your productivity, time in waiting and efficiency.

Here’s what we cover:

Who pRovidES thE StEEl EfficiEncy REviEW?

One of our dedicated Steel Efficiency Review Consultants may take just one hour of your time that’s convenient to you and that allows access to loading, storage and production areas.

What Will you gEt?

After the Review, we will come back to you within one week with a short report, detailing our findings, recommendations and cost-saving solutions.

hoW much doES it coSt?

Nothing. There is no risk to you by undertaking the Review. We will simply offer you recommendations on how to improve your efficiency and productivity.

Why aRE WE offERing it?

Of course we would love you to trial our services, so we’ll demonstrate how we can work together to drive greater efficiency and profitability in your business, but there are no strings attached to taking up a Steel Efficiency Review.

about ShEEt mEtal SuppliES

With innovative approaches and advice on effective and economic use of steel products, Sheet Metal Supplies is the leading Australian sheet and coil processing and distribution business. We are a business unit of BlueScope Steel, fully owned and

supported by the manufacturing and processing arms of BlueScope. With access to over 30 sheet and coil processing machines in Australia, the capability of Sheet Metal Supplies is truly world-class. Sheet Metal Supplies and BlueScope Steel are fully integrated. We serve the following key market segments in Australia:

u Building and Constructionu General Manufacturingu Transport and Automotive

We encourage close alliances with customers so that market trends, major projects, large manufacturing undertakings, programmed maintenance requirements and seasonal fluctuations can all be catered for to the benefit of the partnership.

Sheet Metal Supplies offers a diverse range of steel sheet and coil steel products, comprising:

Note: COLORBOND®, TRUECORE®, ZINCALUME®, GALVABOND®, GALVASPAN® and ZINCANNEAL® are registered trademarks of BlueScope Steel Limited.

We pride ourselves on making our customers successful in your key markets. From the moment you pick up the phone to contact our sales consultants you can be assured they are committed to servicing your needs.

A dedicated team of processing, handling, storage, despatch, safety and technical experts is also looking after your product and service requirements.

ouR SERvicE chaRtER

u Customer Product Schedule - Requirement of Customer Needs

u Stock Management - Customer Stock Re-Order Levels and Co-ordination

u Sales Service Frequency - Sheet Metal Supplies Account Management Requirements based on Customer Needs

u Packaging and Labelling - Packing and Identification Requirements

u Traceability - Customer Individual Part Identification

u Product and Service Quality - Australian Standards certified

gEt timE Rich

Register for your Steel Efficiency Review before 31 October 2010 and you could win the tag heuer aquaracer automatic chronograph below, valued at $3,395.*

To register, simply fax the enclosed Faxback form to 1800 268 647, call 1800 268 056 or register at www.gettimerich.com.au

1. Over production

2. Time in waiting

3. Transportation

4. Processing

5. Inventory

6. Motion

7. Rework

u COLORBOND®

u TRUECORE®

u ZINCALUME®

u GALVABOND®

u GALVASPAN®

u ZINCANNEAL®

u Hot Rolled

u Cold rolled

u Aluminised

u Electrical Steel

u Stainless Steel

*Terms and Conditions:To be eligible to enter, individuals must book a Steel Efficiency Review (SER) and tell the Promoter in 25 words or less what they would like to achieve from the SER. Individuals are to submit entries details by phone, fax or on the competition web page. Details including name, title, business name, address, contact number and email address are required to submit a complete entry. The entry which, in the opinion of the Promoter’s panel of judges, demonstrates the most creative response will win the prize. The prize comprises of one Tag Heuer Aquaracer automatic chronograph watch CAF110 RRP $3395 (as of 16/06/2010). Promotion commences on 21/06/2010. Final entries close 11.59pm AEDST on 31/10/2010. See www.gettimerich.com.au for full terms and conditions.

SAVINGS, STREAMLINING, SOLUTIONS: THE SHEET METAL SUPPLIES STEEL EFFICIENCY REVIEW

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Dear <PrincipleName1Salutation>

Imagine standing back from your business operations to see the overall picture, then looking closely at every step in the production journey to see cost and time savings and overall process improvements.

Now imagine this being absolutely cost-free, yet offering signif icant prof it improvements in both

the long and shor t term.

We don’t just imagine such a process. We’ve per fected it.

We’ll tell you more very soon.

<PRINCIPLENAME1>

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AUSTRALIASHEET METAL SUPPLIES

Let us look into your steel processing requirements to identify savings and boost your profitability with our Sheet Metal Supplies Steel Efficiency Review.


Teaser postcard A3 poster

$1M-5M prospects

The 7384 $1-5M prospective businesses were engaged with a simple

and personalised DM communication pack “See more savings”.

This was implemented in 2-stages:

• A teaser postcard

• A follow up C5 Direct mail pack with:

• Envelope

• Folded A3 Brochure

• Letter/Fax back (seen on next page.)

Both DM communications utilised a special offer (prize) for quick

registration to ensure an early take-up rate.

10

BlueScope Steel produces a wide range of steel sheet & coil products to supply leading Australian manufacturers.

Sheet Metal Supplies and Austral Refrigeration staff work in a close partnership to ensure that material supply schedules are met. We hold adequate customer specific stock available for immediate call up by component manufacturers ensuring quality product whenever it’s required.

Sheet Metal Supplies is proud to be associated with Austral Refrigeration providing quality Australian-made product from BlueScope Steel.

WORKING SUCCESSFULLY WITH AUSTRAL REFRIGERATION

BlueScope Steel - Sheet Metal Supplies is a market leading steel sheet metal business focused on providing quality BlueScope Steel products and solutions. We’re proud to be working with Austral Refrigeration to supply quality steel processing products, optimise stock management and increase productivity.

STRONG pARTNERSHIpS dELIvER SUpERIOR pROdUCTS

OUR STEEL EFFICIENCY REvIEW: 7 pATHS TO SAvINGS

We are a BlueScope Steel business supported by the manufacturing and processing arms of BlueScope Steel.

Our technical and processing expertise enables us to develop differentiated, value-added product and service offers to our customers.

Our Steel Efficiency Review offer looks closely at your business operations, production and processing lines to identify potential cost and time savings, remove bottlenecks and make incremental changes which can translate into profit improvements.

The review aims to help us better improve our product and service offer – customising our business to suit your business. (Read more at www.sheetmetalsupplies.com.au)

Website Development www.sheetmetalsupplies.com.au was developed to fully engage

our target audience. The website allowed all information to be

communicated in a single spot, as well as allowing that information

to be understood and remembered. This was an important channel,

given the decision makers targeted in the campaign and their need

to seek more information on the SER and understand our business.


Advertorials Advertorials online and in industry publications, such as Australia’s

Best Manufacturing created a level of publicity and excitement

for our new service offering. Partnering with key customers such

as Austral Refrigeration and Ai Automotive provided a form of

evidence to the industry and other key stakeholders.

Custom landing page

Full page advertorial

<DATE><PRINCIPLENAME1><PRINCIPLETYPE><NAMEFOUND><STREET1><STREET2><SUBURB> <STATE> <POSTCODE>

SHEET METAL SUPPLIES

PS Don’t forget, your no-obligation Steel Efficiency Review could win you a holiday of your choice valued at $3,500*. Be sure to register before 31.7.2011.

Seven ways our Steel Efficiency Review has identified efficiencies and unlocked savings.

Dear <PrincipleName1Salutation>

Much higher margin and throughput. No waste. Sound interesting?We understand the pressure on your steel processing business, which is why we have developed an industry first comprehensive and confidential Steel Efficiency Review. By simply registering and completing our complimentary review, you’ll enable us to work with you to unlock significant business improvements.

We cover all 7 crucial steel processing areas:

We’ve enclosed a brochure called Seven SER Success Stories. It’s seven testimonials from companies like yours.

Please feel free to have a quick read. We know you’ll be impressed by the savings these companies have enjoyed as a direct result of the Steel Efficiency Review.

Just one hour is all it takes.The Sheet Metal Supplies Steel Efficiency Review can take just one hour, and within a week we’ll report and confirm our findings, recommendations and cost-saving solutions.

How much does it cost?Nothing. We simply provide recommendations on how to improve efficiency and productivity, but it’s your decision on whether to act. There are no strings attached.

You could win a great holiday valued at $3,500.Register for your Steel Efficiency Review before 31.7.2011 and you could WIN a holiday of your choice, valued at $3,500*. To register, simply fax the enclosed Faxback form to 1800 268 647, call 1800 268 056 or register at www.gettimerich.com.au

Yours sincerely

Lige Donald, General Manager – Sheet Metal Supplies

1. Over production

2. Time in waiting

3. Transportation

4. Processing

5. Inventory

6. Motion

7. Rework

FAXBACKREGISTER FOR YOUR STEEL EFFICIENCY REVIEWRegister for your Steel Efficiency Review before 31.7.2011 and you could win a holiday of your choice valued at $3,500.*

To be eligible to win, please tell us in 25 words or less what you would like to achieve from the Steel Efficiency Review:

First and Last Name <PRINCIPLENAME1>

Title <PRINCIPLETYPE>

Business Name <NAMEFOUND>

Street <STREET1>

<STREET2>

Suburb <SUBURB>

State <STATE>

Postcode <POSTCODE>

Phone <PHONESTD><PHONENUMBER>

Fax <FAXAREA <FAXLOCALNUMBER>

Mobile

Email

Please feel free to update your details if anything above is incorrect

Please answer the following 6 questions to help us understand your business. Tick one box per question.

Are you a previous or existing customer of BlueScope Steel? Yes or No

If yes, what is your account number?

Would you like to receive our e-news with product and industry trend information? Yes or No

Please fax this registration form to 1800 268 647, call 1800 268 056 or register at www.gettimerich.com.au*Terms and conditions: To be eligible to enter, individuals must book a Steel Efficiency Review (SER) and tell the Promoter in 25 words or less what they would like to achieve from the SER. Individuals are to submit their entry details by phone, fax or on the competition web page. Details including name, title, business name, address, contact phone number and email address are required to submit a complete entry. The entry which, in the opinion of the Promoter’s panel of judges, demonstrates the most creative response will win the prize. The prize comprises of a domestic or international holiday voucher for $3500 to be redeemed at any Flight Centre in Australia for up to 12 months from the competition announcement date. Promotion commences on 14/02/2011. Final entries close 11.59pm AEDST on 31/07/2011 and announced on the 16/08/2011. See www.gettimerich.com.au for full terms and conditions.

1. What is your total annual steel usage? <100 tonnes r 100-500 tonnes r 500+ tonnes r

2. How many shifts do you run in your business? 1 shift r 2 shifts r 3 shifts r

3. How many days of the week do you operate? 5 days r 6 days r 7 days r

4. How many operators do you have on the floor during your main shift?

<5 operators r 5-20 operators r 20+ operators r

5. How many machines do you have operating during your main shift?

<5 machines r 5-10 machines r 10+ machines r

6. How much processing / manufacturing do you outsource?

All performed in-house r

1-50% r 50%-100% r

SHEET METAL SUPPLIESSteel Efficiency Review

11


5. Sales and Marketing Campaign Strategy

Figure 3.0 – Working Flow of the Sales and Marketing Campaign Strategy

Following the key marketing outputs, an external telemarketing

function was implemented to ensure increased conversion rates of

the targets into qualified leads for the SMS sales force.

The telemarketers played a critical in following up all 7900

businesses and re-selling the SER process to these businesses

over the phone. Telemarketing further qualified these businesses

and registered them into the program. Once registered an “Initial

Meeting” was set with SMS sales people.

This meeting provided SMS an opportunity to meet with multiple

decision makers to explain the SER offering and verify all

information provided in the registration process (telemarketing).

It also allowed our sales people to reinvent themselves as

consultants and ask questions to uncover bottlenecks, issues and

opportunities in the business operations of each prospect.

The next meeting would be the SER - the unique selling

proposition behind our campaign. The SER survey would be

performed in this meeting by two or more SER consultants (SMS

sales people with BlueScope operational staff) with the client;

reporting all findings and recommendations back to the key

decision makers of the client’s business with the aim of crafting a

proposal to secure more sales volume. See Figure 3.0 for an overall

flow of the sales and marketing campaign strategy.

12

The key to a successful result was working closely and smartly

with our external agency partners. Ensuring good communication

and understanding between the agencies and SMS was critical.

The agencies included:Dun & Bradstreet (D&B). Played a pivotal role in sharing key

findings, insights and opportunities with SMS. D&B provided all data

to meet the requirements of all key stakeholders.

Bluefrog Marketing. Project managed the marketing campaign and

executed the telemarketing function. Having worked with Bluefrog

Marketing on many previous projects this made it easy for SMS to

trust their expertise and valuable advice.

Directivity & Green Flare. Provided creative execution for all DM

elements and strategic advice. Their key expertise is in direct

marketing media and was utilised to full extent from SMS.

Even more importantly the SMS management team reconfigured

their businesses to leverage the points of difference the SER

promised. This in turn allowed our sales people to re-invent them

selves into SER consultants – providing an offering unmatched in

the Australian steel industry.

Since launch in August 2010 to February 2011, SMS have conducted

over 800 appointments from the 7900 targets (10% lead conversion

rate).

Sales from 206 customersIncremental sales volume has been secured from 206 customers

made up from 50 new SMS customers (from the 7448 D&B list –

0.7% success rate); 41 inactive SMS customers (re-activated from

302 inactive customer – 13.5% success rate); and a further

115 existing SMS customers have purchased additional volumes

(from the target list 150 – 76.6% success rate).

Sales VolumeMore than 7300 sales tonnes (~$10.2M sales revenue) have been

secured by SMS with 3241 tonnes already invoiced. The campaign

objective of 6500 sales tonnes (~$9.1M sales revenue) is on target

to be invoiced by 30 June, 2011.


Figure 3.0 – Working Flow of the Sales and Marketing Campaign Strategy

13

6. Results

Work in progress It is important to note a further 272 businesses fall into our “Work

In Progress” stage; meaning the SER process has been or is being

conducted in March 2011. A further 94 businesses are at “Proposal”

stage; meaning an offer is being made with a view to opening the

account in March-April 2011.

In total, from the 366 businesses - it is estimated a further 45 to

50 will be converted into SMS customers by 30 June, 2011. See

Figure 4.0 for Campaign Results – represented as a Funnel of Sales

Opportunities.

Figure 4.0 – Funnel of Sales Opportunities


Direct marketing

Telemarketing

Refer to BSD/ACIM

Qualified

Work in Progress

Proposal

Invoiced 3241TWins 7380T

7900

7900

801

125

272

94

206

50 New SMS Customers41 Inactive SMS Customers re-activated115 Target SMS Customers

14

7. Key outcomes that value to the organisation

Our Success Stories

SMS have helped uncover client issues with stock management,

forecasting, product quality, production quality and efficiency and

transport. Our Steel Efficiency Review has identified major savings

for many steel processing companies across Australia.

Some of what we achieved from the SER:

Over production: 32% of clients have opportunities to make savings in

waste.

Time in waiting: 15% of clients have seen opportunities to improve

their workflow, working capital and decrease their exposure to

safety issues.

Transportation: 24% of clients have opportunities to improve

productivity and reduce freight costs.

Processing: 18% of clients have opportunities to reduce excess waste

amounting to greater production runs and savings in material cost.

Inventory: 36% of clients have opportunities to reduce delays

and excess stock stored to remove the time wasted managing

inventory.

Motion: 22% of clients have opportunities to reduce motion

problems and safety risk.

Rework: 28% of clients have opportunities to reduce the number of

rework resulting in significant savings in material cost.


15

A defining moment...Besides the savings we identified for our prospects and clients, one

defining moment with a new client occurred in Victoria.

“The client involved in manufacturing was in desperate need of

cutting production costs without comprising quality to ultimately

deliver a more superior product to their customers. SMS assisted

the client via product substitution and load volumes; changing the

grade and gauge of steel used in production allowed the client to

save in production runs and produce an even better end product.

More detailed recommendations followed in forecasting and a just

in time approach to delivery to ultimately win 100 per cent of this

client’s business. A great result for SMS and our new client!”

See Appendix Three for “SER Seven Success Stories.”

We look forward to giving you an update in 2011-12 as to its

progress.


16

The development of the Steel Efficiency Review and its sales process

has been a turning-point for the business.

Besides the revenue it has generated, it has provided 4 strategic benefits:

1. A real competitive advantage – no other business in our category is

offering this.

2. More opportunity to protect our margin – by not selling on price

we have greater opportunity to be more focused on value pricing

where our SER savings give us leverage for maintaining margins.

3. Greater opportunity to get the “door-opened” for new business.

4. A new culture of selling has been delivered. We now have a

genuine sales approach that is all about the customer. By starting

with their needs, we are starting at the right place. It has provided a

platform to listen first, identify value and become a genuine business

partner, not just a supplier.

Based on the success to date, the SER is into phase 2, with 7500

new prospects identified and a new creative approach to get the

“door opened”.

We look forward to giving you an update in 2011-12 as to its progress.

8. Summary

17

Appendix One – The Steel Efficiency Review

Appendix Two - Dun & Bradstreet Report


18

Appendix Two - Dun & Bradstreet Report

23

Appendix Three - SER Success Stories

41

7WATCH YOUR BUSINESS BENEfIT fROM OUR

SHEET METAL SUPPLIES STEEL EffICIENCY REVIEW

Call 1800 268 056 or visit www.gettimerich.com.au

STEEL EFFICIENCY

REVIEWSUCCESS

STORIES

SHEET METAL SUPPLIES

42

Our Steel Efficiency Review has identified major savings for many steel processing companies across Australia. Here are some of those success stories. Over production: 32% of clients have opportunities to make savings in waste.






Rework: 28% of clients have opportunities to reduce the amount of rework resulting in significant savings in material cost.

1. OVER PRODUCTIONDate: 19 September 2010.

The client: A Manufacturer of Insulated Panels - Brisbane, Queensland.

The problem: The client experienced product quality issues leading to over production and an increase in waste (scrap).

Recommendation from SER: Implementation of a

product quality and scrap recording process.

Result: Significant savings in waste and product quality process put in place. BlueScope Steel Sheet Metal Supplies aims to reduce labour and costs associated with waste management for all our clients.

2. TIME IN WAITING PROBLEMSDate: 22 October 2010.

The client: A Manufacturer of Conveyor Systems - Melbourne, Victoria.

The problem: Limited Warehouse space. The client manually processed product on site and wasted man-hours waiting for end-product to become available. The client was also exposed to safety issues.

Recommendation from SER: BlueScope Steel Sheet Metal Supplies delivered customised product in kit form, simplifying the client’s processes and enabling them to concentrate on their core business – making conveyor systems. We also identified opportunities to improve safety on site.

Result: Improved client workflow, working capital and decreased their exposure to safety issues. BlueScope Steel Sheet Metal Supplies is aiming to create an efficient and safer working environment for our clients.

3. TRANSPORTATION ISSUESDate: 23 September 2010.

The client: A Metal Fabrication Business – Brisbane, Queensland.

The problem: The Client did not have a transport

manifest for all outbound deliveries resulted in inefficiencies in transportation and delays to their customers.

Recommendation from SER: BlueScope Steel Sheet Metal Supplies recommended an audit and review of the load planning process and current transport provider.

Result: A new transportation and manifest system was implemented improving productivity and reduced freight costs for the client. BlueScope Steel Sheet Metal Supplies are aiming to improve the flow of goods and minimize transport issues for all our clients.

4. PROCESSING WASTEDate: 4 October 2010.

The Client: A General Engineering Workshop – Melbourne, Victoria.

The problem: The Client produced excess waste for all sheet steel products.

Recommendation from SER: BlueScope Steel Sheet Metal Supplies worked with the client to reprogram end product specifications into a new steel sheet size.

Result: The new sheet size has solved the client’s problem of excess waste giving greater production runs and material cost savings. BlueScope Steel Sheet Metal Supplies is aiming to reduce excess and the hassle of managing waste for all our clients.

5. INVENTORY ISSUESDate: 28 October 2010.

The client: A Sheet Metal Manufacturing Business – Sydney, NSW.

The problem: Insufficient stock for urgent orders - has two shifts and only purchases as required.

Recommendation from SER: BlueScope Steel Sheet Metal Supplies proposed to supply the client with

an inventory assistance scheme.

Result: BlueScope Steel Sheet Metal Supplies has worked with the client to reduce delays and excess stock stored and remove time wasted managing inventory. BlueScope Steel Sheet Metal Supplies is aiming to create a more productive inventory purchasing system for their clients.

6. MOTION PROBLEMS

Date: 22 August 2010.

The client: A Sheet Metal Work Shop – Brisbane, Queensland.

The problem: Safety risk, no layout and material flow.

Recommendation from SER: BlueScope Steel Sheet Metal Supplies proposed “line marking” to develop a more effective warehouse layout and improved safety conditions (Personal Protective Equipment - PPE).

Result: The findings were implemented reducing the client’s motion problems and safety risk. BlueScope Steel Sheet Metal Supplies are aiming to improve motion for their clients.

7. REWORK COSTING YOU??


The client: A Construction Company – Brisbane, Queensland.

The problem: The Client complained of a slow and costly 3 day response to re-work over a normal lead-time process.

Recommendation from SER: BlueScope Steel Sheet Metal Supplies proposed to a quality system to adjust output and reduce complaints.

Result: The recommendations have been implemented and the client now expects a reduced number of rework resulting in significant savings in material cost and more satisfied customers. BlueScope Steel Sheet Metal Supplies are aiming to reduce the amount of rework for their clients.

“36% of clients have opportunities to reduce delays and excess stock stored to remove the time wasted in managing inventory...”

WHY UNDERTAKE A STEEL EFFICIENCY REVIEW? HERE ARE SEVEN IRON-CLAD REASONS

“32% of clients have opportunities to make savings in waste...”

43

Our Steel Efficiency Review has identified major savings for many steel processing companies across Australia. Here are some of those success stories. Over production: 32% of clients have opportunities to make savings in waste.






Rework: 28% of clients have opportunities to reduce the amount of rework resulting in significant savings in material cost.

1. OVER PRODUCTIONDate: 19 September 2010.

The client: A Manufacturer of Insulated Panels - Brisbane, Queensland.

The problem: The client experienced product quality issues leading to over production and an increase in waste (scrap).

Recommendation from SER: Implementation of a

product quality and scrap recording process.

Result: Significant savings in waste and product quality process put in place. BlueScope Steel Sheet Metal Supplies aims to reduce labour and costs associated with waste management for all our clients.

2. TIME IN WAITING PROBLEMSDate: 22 October 2010.

The client: A Manufacturer of Conveyor Systems - Melbourne, Victoria.

The problem: Limited Warehouse space. The client manually processed product on site and wasted man-hours waiting for end-product to become available. The client was also exposed to safety issues.

Recommendation from SER: BlueScope Steel Sheet Metal Supplies delivered customised product in kit form, simplifying the client’s processes and enabling them to concentrate on their core business – making conveyor systems. We also identified opportunities to improve safety on site.

Result: Improved client workflow, working capital and decreased their exposure to safety issues. BlueScope Steel Sheet Metal Supplies is aiming to create an efficient and safer working environment for our clients.

3. TRANSPORTATION ISSUESDate: 23 September 2010.

The client: A Metal Fabrication Business – Brisbane, Queensland.

The problem: The Client did not have a transport

manifest for all outbound deliveries resulted in inefficiencies in transportation and delays to their customers.

Recommendation from SER: BlueScope Steel Sheet Metal Supplies recommended an audit and review of the load planning process and current transport provider.

Result: A new transportation and manifest system was implemented improving productivity and reduced freight costs for the client. BlueScope Steel Sheet Metal Supplies are aiming to improve the flow of goods and minimize transport issues for all our clients.

4. PROCESSING WASTEDate: 4 October 2010.

The Client: A General Engineering Workshop – Melbourne, Victoria.

The problem: The Client produced excess waste for all sheet steel products.

Recommendation from SER: BlueScope Steel Sheet Metal Supplies worked with the client to reprogram end product specifications into a new steel sheet size.

Result: The new sheet size has solved the client’s problem of excess waste giving greater production runs and material cost savings. BlueScope Steel Sheet Metal Supplies is aiming to reduce excess and the hassle of managing waste for all our clients.

5. INVENTORY ISSUESDate: 28 October 2010.

The client: A Sheet Metal Manufacturing Business – Sydney, NSW.

The problem: Insufficient stock for urgent orders - has two shifts and only purchases as required.

Recommendation from SER: BlueScope Steel Sheet Metal Supplies proposed to supply the client with

an inventory assistance scheme.

Result: BlueScope Steel Sheet Metal Supplies has worked with the client to reduce delays and excess stock stored and remove time wasted managing inventory. BlueScope Steel Sheet Metal Supplies is aiming to create a more productive inventory purchasing system for their clients.

6. MOTION PROBLEMS


The client: A Sheet Metal Work Shop – Brisbane, Queensland.

The problem: Safety risk, no layout and material flow.

Recommendation from SER: BlueScope Steel Sheet Metal Supplies proposed “line marking” to develop a more effective warehouse layout and improved safety conditions (Personal Protective Equipment - PPE).

Result: The findings were implemented reducing the client’s motion problems and safety risk. BlueScope Steel Sheet Metal Supplies are aiming to improve motion for their clients.

7. REWORK COSTING YOU??


The client: A Construction Company – Brisbane, Queensland.

The problem: The Client complained of a slow and costly 3 day response to re-work over a normal lead-time process.

Recommendation from SER: BlueScope Steel Sheet Metal Supplies proposed to a quality system to adjust output and reduce complaints.

Result: The recommendations have been implemented and the client now expects a reduced number of rework resulting in significant savings in material cost and more satisfied customers. BlueScope Steel Sheet Metal Supplies are aiming to reduce the amount of rework for their clients.

“36% of clients have opportunities to reduce delays and excess stock stored to remove the time wasted in managing inventory...”

WHY UNDERTAKE A STEEL EFFICIENCY REVIEW? HERE ARE SEVEN IRON-CLAD REASONS

“32% of clients have opportunities to make savings in waste...”

44

The Steel Efficiency Review:From Product Sell to Service Utility

April 2011

45

bs report

Documents

bluescope steel business

customers business challenges

b2b business

imported steel product

steel efficiency review

unique business model

gauge of steel

sales revenue