Customer Case Study – McNeilus Steel

By Bob Raida on

There is likely no better way to understand the benefits of e-business than learning about how other companies improve efficiency through the use of technology.  McNeilus Steel is one of Foundational’s longest tenured customers, and is a great example of the potential for improvement through EDI and e-business.

McNeilus Steel is a family-owned full line steel distributor and processor dedicated to providing the best in material quality, responsive customer service, and on-time delivery. Serving the upper Midwest region since 1948, McNeilus Steel is comprised of over 450 employees and three warehouses located in Dodge Center, Minnesota, Fargo, North Dakota, and Fond du Lac, Wisconsin. Each location sells and delivers hot roll and cold finish bar, tube, pipe, sheet, plate, flooring, grating, stainless, aluminum, rebar, and other miscellaneous ferrous and nonferrous metal products. McNeilus Steel also offers metal fabrication services, includ­ing shot blasting, laser and plasma cutting, bending, rolling, machining, rebar fabrication, sawing, and robotic beveling.

McNeilus had been a long time satisfied user of Paragon’s Metalware ERP system. Metalware was designed to addresses the needs and challenges that are unique to steel processing, so it is a great fit for McNeilus.  One of these challenges is EDI.  Initially, McNeilus chose to use an in-house EDI software solution that integrated with Metalware.  While this solution was effective, the cost of maintenance and manpower to manage the EDI system was significant. EDI was limited to only the highest volume trading partners because it was difficult to cost justify expansion of the EDI implementation.

In time, Paragon introduced McNeilus to their Managed EDI service – now a separate division of Paragon, called Foundational e-Business.  Foundational offers an outsourced EDI service that integrates seamlessly with most ERP systems, includ­ing Metalware. This service was a good fit for McNeilus, given its tight integration with the ERP system, ease of management, and the fact that Foundational’s team not only possessed deep EDI expertise, but they understood EDI for the steel processing industry.

As a result of switching to the Managed EDI service, McNeilus found it cost effective to expand the scope of their EDI implementation by 500% and enjoy more widespread benefits.

McNeilus now uses EDI in a number of different parts of the business, specifically:

Material purchasing

Prior to working with Foundational, McNeilus staff had to physically count and track down inventory in the warehouses, then create a “buy report” that showed what materials needed to be reordered, and orders were manually placed with the mills. Since integrating Metalware with Foundational e-Business, McNeilus has been able to use vendor managed inventory to dramatically streamline the ordering process. Metalware’s inventory system tracks inventory levels and keeps suppliers informed via EDI. Suppliers monitor this information and create fulfillment orders based on pre-determined inventory levels. McNeilus is able to keep inventory levels low and know that they’ll have the materials they need when they are needed. Inventory now turns very quickly and smoothly.

Material Receiving

A majority of all inventory receipts are now processed with EDI; and EDI receipt processing is simple.  The mill sends a ship notice transaction with details about the material being received, so the ERP system knows what’s coming as soon as the mill ships it.  When the material is received to the warehouse, the user simply scans a bar code label on the items and the ERP system is alerted that the material has been received to the warehouse. Both manual entry and human error are virtually eliminated.

Sales Order Processing

Some customers send orders via EDI, resulting in significant time savings. The sales reps simply need to look over and accept the orders.  The sales rep can take the time that was once spent manu­ally processing orders and spend that time generating new business and servicing existing customers.

 

A capable ERP system such as Metalware, when combined with an effective and efficient e-business platform, such as Foundational, creates a powerful synergy. Dramatic business process improvements are the result when ERP can communicate seamlessly with customers and suppliers. McNeilus does not need to keep EDI experts on staff – Foundational acts as their EDI department. All EDI inquiries and modifications are addressed by the staff of experts at Foundational, so McNeilus knows their system will run smoothly without fail, enabling them to focus on providing excellent products for their customers!

To download the complete McNeilus Steel case study in printable format, click here.