BDS-Stahlhandelstag 2017 Digitalisierung: Die Zukunft des Stahlhandels? Kloeckner & Co SE Gisbert Rühl (CEO) 28.09.2017
Current linear steel supply chain is highly inefficient and intransparent No effective information and data exchange on available inventory, lead times etc. SUPPLIERS STOCKHOLDING CUSTOMERS Long delivery times, incorrect deliveries and high inventory levels 2
We had from the beginning the vision of an open industry platform SUPPLIERS Proprietary online portals and internal digitalization Onlineshop Contract Portal Part Manager EDI (ERP-2-ERP) CUSTOMERS O P E N I N D U S T R Y P L AT F O R M Commodity and specialized HVA services 3RD PARTIES OTHER DISTRIBUTORS/ SSC 3
but we started small with focus on the build-measure-learn cycle 2014 Started with 2 employees in Betahaus in Berlin First Onlineshop MVP launched Founding of kloeckner.i (KCI) First office rented for KCI 2015-2016 2017 Launch of Onlineshop in EU Launch of Contract Portal/ Part Manager in EU and US Launch of Service Portal Kloeckner Connect Launch of additional customer-centric tools like the Order Transparency tool Expansion of KCI to more than 60 people of different functions and move into bigger office Launch of Klöckner Direct in the US Increase of revenues generated through online channels up to 17% of the total sales in August 2017 Launch Klöckner Marketplace for complementary products as MVP Launch XOM as MVP 4
Proprietary company specific vertical platforms Industry specific vertical platforms 01 The future landscape of internet platforms in B2B Horizontal cross industry platforms XOM Industry Platform Standard products Standard formats Standard formats Steel specific services, e.g. Laser cutting Profiling Surface treatment Customer service Steel specific services, e.g. Laser cutting Profiling Surface treatment Customer service The more vertical the more specific The more horizontal the more general KCO specific HVA services, e.g. 3D lasers PVD 3D printing Proprietary online portals and internal digitalization Onlineshop Part Manager Contract Portal EDI (ERP-2- ERP) Overlap 5
Horizontal and vertical platforms fulfill different customers needs Access to the full range of steel and metal products and more general steel specific services Full transparency and price comparison => Preferably for price sensitive buyers Access only to KCO-specific assortments and services => Preferably for customers where KCO fulfills most of the product and service requirements Access only to standard steel and metal products without additional services => Preferably for less frequent and low volume buyers (long tail) 6
XOM Industry Platform will be a multi-sided platform which facilitates transactions between all market participants Business model expansion timeline Supply side Customer and distribution side Mills Distributors Customers Steel Specialty metals Steel Specialty metals Addtl. industries Purchasing Fulfillment Software integrations Ads Cust. support Finance Software integrations 7
and thereby creates value through significantly improved supply and demand matching Customers Efficiency gains in purchasing to reduce costs and NWC Broad offering and easier price comparison No dependency on business hours Distributors Lower warehousing and logistics costs Lower NWC and enhanced cash flow No development costs for proprietary online shops required Increasing access to potential customers Suppliers / Producers Lower stockholding Higher direct sales opportunities Improved capacity utilization and process efficiencies 8
Summary and conclusion The steel and metals market is becoming more and more digital and will be dominantly facilitated through online platforms, which create value for customers, suppliers and distributors Three type of online platforms exist: Proprietary company specific verticals Vertical industry specific (will gain largest share) Horizontal general platforms Each type fulfils different customer requirements and needs a different sales strategy Digitalization requires a cultural change and mindset shift towards build-measure-learn Distributors that start their digital journey early can make important learnings on competition in an online world and thereby gain an important head start XOM will be positioned as open industry platform for the steel and metals market and will be fully independent from Klöckner 9