At the SMU Steel Summit on August 26, 2024, in Atlanta, Georgia, a dynamic discussion unfolded around fostering innovation within the metals industry. Wes Spencer, Vice President of Product at Stella Source, moderated a conversation with Stephen Armstrong and Edwin Stanley, who shared valuable insights into their approaches to instilling a culture of innovation in their organizations.

Instilling Innovation at O’Neal Industries

Stephen Armstrong, Executive Vice President of O’Neal Industries, detailed how his team at O’Neal Steel embraced innovation. The development of Pronto, O’Neal’s e-commerce platform, was a pivotal initiative. Introduced around 2012, Pronto significantly improved customer interactions by streamlining the ordering process and enhancing service efficiency.

Armstrong emphasized that innovation at O’Neal started with incremental steps. Initially, the focus was on implementing new tools and technologies to make employees’ jobs easier. However, Armstrong noted that the real challenge was evolving the organizational culture to support these changes. This involved:

• Cultural Shift: Moving beyond viewing technology as a mere project to fostering a culture that embraced continuous improvement.
• Employee Engagement: Addressing fears that technology would replace jobs and instead positioning it as a tool to support and enhance employees’ roles.
• Integration: Aligning technological advancements with business needs, such as investing in both e-commerce platforms and warehouse technology to ensure cohesive progress.

Fostering Innovation at Laser Needs

Edwin Stanley, CEO of Laser Needs, shared his experiences with innovation during his tenure at GH Metal Solutions and Laser Needs. Stanley highlighted several key practices that helped embed a culture of innovation:

• Customer-Driven Innovation: The adoption of laser cutting and CNC press brakes was driven by customer demands for precision and efficiency. Stanley’s approach was to listen to customers and continuously adapt technology to meet their evolving needs.
• Incremental Improvement: Rather than setting grandiose goals, Stanley focused on gradual improvements. The introduction of ERP systems and advanced machinery were seen as steps toward better service and increased capability.
• Overcoming Resistance: Stanley discussed the challenge of managing cultural resistance to change, particularly in dealing with fears that new technologies would replace jobs. He acknowledged that overcoming this resistance required persistent efforts from leadership to foster a culture of continuous improvement.

Shared Insights and Challenges

Both Armstrong and Stanley highlighted that driving innovation involves more than just implementing new technologies. It requires a concerted effort to build a supportive culture that values ongoing improvement and addresses employee concerns. Key takeaways from their experiences include:

• Cultural Adaptation: Innovations must be accompanied by a cultural shift within the organization. This involves educating and engaging employees to view technology as a means to enhance their roles, not replace them.
• Continuous Improvement: Innovation is an ongoing process that involves incremental changes and adjustments based on feedback and evolving needs.
• Integration of Technology: Successful innovation requires aligning technological advancements with business operations and customer needs, ensuring that all aspects of the organization move forward cohesively.

The insights shared at the SMU Steel Summit underscore that fostering a culture of innovation in the metals industry involves both strategic technology investments and a supportive cultural framework. By addressing these elements, companies can navigate the complexities of modern industry and drive sustainable progress.

Transcript

Below you’ll find a lightly edited transcript of the panel discussion. 

[Wes Spencer] Good morning. Thank you, Lindsay, and thank you guys for being here. We are really excited to have this conversation. And as we were preparing for it, Stephen, I know it really energized you and I on a couple of preparatory conversations. Edwin, you and I, the same. So excited to have a chance to tell you guys about maybe some unique backgrounds and innovating in the metals industry, what that really looks like from a historical standpoint and what innovation probably means today. And really kind of talk about that story in a very conversational way. So as Lindsay said, please throw your hand up. We’ll get a microphone to you, text your question in. But hopefully the conversation moves pretty quickly, but also in a way that really just brings us to a spot where we have time at the end to ask some questions, but let’s not wait until the end if you’ve got something you want to ask about.

Again, my name is Wes, the Vice President of Product at Stella Source, and really what that means is how do we solve problems for people in the metals industry who are looking to take friction out of buying and selling metal? That’s what we’re trying to do here. And partnerships is also part of my responsibility, so partnering with our users, our customers, and those that they want to interact with and improve their relationships with. That’s really near and dear to me. That’s what I wake up every day thinking about. But I’m really excited to have Stephen Armstrong and Edwin Stanley here to join us and talk about their experience and how we’re all working together to hone in on some opportunities.

So with that be said, Stephen, Edwin, I’d like you guys to take a minute and maybe give us a bit of background on what your career looks like. What do you do now? What does a day in the life in your respective lives look like before we dive straight into it. So Stephen, to you.

[Stephen Armstrong] Yeah, thank you, Wes. I’m Stephen Armstrong. I’m the executive vice president of O’Neal Industries with responsibility for our industrial metals group of companies, which is O’Neal Steel, O’Neal Manufacturing, and a company called Leeco Steel. I began my career in the steel industry in 2006. I came from telecommunications and decided it was time to make a change and moved into the steel industry and honestly I can say I’ve never looked back I love what we do and I love this industry and the people in it I really came when I started my job was how do we use data and information how do we make better decisions based on data and information and ultimately through that career it led to I became our CFO ultimately the president of O’Neal steel and in 2000 in the middle of COVID moved to O’Neal Industries in this new role. And really, a day in the life, every day looks different, but it’s spending a lot of time thinking about innovation. How do we do things differently? How do we address the challenges of today’s market and industry and go from there? And how can we do that for each of our companies in each a different, unique way?

[Wes] Great. Edwin, How about you?

[Edwin Stanely] My name is Edwin Stanley. I’m currently with a company called Laser Needs, which I’ll say more about that in a moment, but started my metal fabrication career in 1999 with a company called The Gas House, which is now GH Metal Solutions, and we were very fortunate. We grew while I was there from probably 70 employees to over 400, laser cutting, bending, welding, and paint. I retired from there four years ago and then got a little bored and got back in the industry a couple years ago. So that’s where I am now. CEO of Laser Needs and we have, we’re just a laser cutting company, six lasers and now feel like I’m starting the journey almost all over again.

[Wes] Got it. Very good. So Stephen, you kind of touched on it already, but in previous conversations we talked about your early role at O’Neal Steel, getting started, democratizing data, and how that was a kind of innocuous way to get really moving in a broader initiative of innovation. What did that look like? So if you could rewind back 10- or 15-years kind of into that role, what was driving your interest in innovating through technology, what was behind it, what was the buzz at that time, and what did it look like just to put one in front of the next and get going.

[Stephen] Sure, and I like that you still say it’s 10 years ago, but it’s getting closer to 20 years ago now that I started. But really, at that time, a lot of companies were on the ERP journey. So we had just gone through this, what, six, seven -year journey of implementing an ERP system, and we had all this new information, and we didn’t have any idea what to do with it. Our salespeople our ops people were still asking questions of how do I make a better decision and so it was really taking that data everything that we started collecting in the ERP system and serving that up to our own employees in a way that they could they could consume it and make their lives easier and that really you know we talked about it that was at that point what we were doing is just providing a way for people to do their job easier they really weren’t having to change how they did their job they were just being able to answer questions really quickly and so the appetite for that information was just huge and so it started this journey of god give me more give me more give me more which ultimately led to a lot of the things we’ll talk about in the future but but it started with just facilitating facilitating people giving them the ability to do their job easier every day.

[Wes] Edwin what about you you touched on an earlier but when you went to a company in 1999 you said 70 employees and when you were retiring over 400 you’ve kind of told us and I know you will hear in a little bit about just the the investment in the journey that y ‘all went through from a technology standpoint with equipment ended up with 30 -some -eye lasers, 20 -something press breaks, but getting started, did y ‘all get started with the vision of that many, or what drove you guys to just get the ball in motion?

[Edwin] Well, definitely we did not have a vision to land where we did, and of course the company is still there and still very successful. I think they’re even more successful than now they got rid of me, But no, it’s just one block at a time. And our customers wanted laser cutting, and they wanted more precision parts, which led to CNC press breaks, and we just continued to add. And it was servicing our customers more than anything else, listening to them. And also, as we added technology and ERP was part of that, too. Some of my partners really weren’t a fan of adding that. But we did it and we, you know, a few years in, then we realized we couldn’t have, we couldn’t have grown to where we were without that. And all those things, you know, looking back, seemed somewhat easy, but they really, they really weren’t. But they weren’t, you know, visionary either. I think it was just, you know, continuing to improve, continuous improvement. We talked about that earlier, eating breakfast here. So just a little bit of time. Keep innovating, keep servicing your customers, listening to what they need, and try to add that as you can.

[Wes] So just the general motion of enabling employees to do their jobs more effectively. That’s going to naturally help you take care of your customers in a better way. But when you guys kind of set out on that journey, I think what we’ve all kind of heard, at least at this point, I know that we’ve had in sidebar conversations is it was not this huge quest and huge journey to undertake. It was just kind of put one foot in front of the next and get moving. But from the perspective of the organizations that you were leading and the people at the time, do you sense that they looked at technology as a project, as in we’re going to do a particular event? We’re going to implement this software, we’re going to bring in this machine, and then we’ll kind of settle back into the world that we like and what we know. Or did you see teams embrace an overall cultural change and cultural mind shift into innovation no matter how it plays out whether it’s technology and software at the warehouse or just process change management did you see those cultures evolve in a way that essentially established fertile ground for innovation become part of y ‘all’s DNA so steven sure um you know for us west It started as a project.

[Stephen] You know, it started as just getting started. Let’s do this data project. Let’s give our salespeople new tools. And so we built this, you know, as we were going and we started getting momentum, we realized we had to do the cultural part. We had to do that shift and get, go beyond just, yeah, if this can make my life easier, I’ll consume this information. And to get to where we are today, it took a tremendous amount of focus on culture. We had to teach people that, you know, technology wasn’t there to replace them. It was there to make their lives easier. It was how do we use technology to, you know, change how we do things. And we spent just hours and days and just talking to people about what we were trying to achieve with technology and challenge those people to how do you you know is there technology that can make your life easier what do we need to think about what do we need to be doing so while it started as a project and I think Edwin we talked about this a lot it’s just getting started taking that next step and then you can look up and go wow we’ve done a whole lot of things but you have to spend the time on the cultural side to you to really unlock what you want to do so it’s this combination of getting started in project, but you have to bring the culture alongside of it as well.

[Wes] Edwin?

[Edwin] Yeah, I agree 100%, but the cultural change for my career, that was the most difficult thing by far. I think in general, most of the team wanted to see it more as a project, okay, we get this done, managements happy. We get this done, then We can stop changing because constant change is most people don’t like that and be included But it’s so it’s really hard to develop the culture of continuous improvement, We did okay at it. I wouldn’t give ourselves a great grade for that. But we continue we just had to continue to push it and it had to come from the top from top management you know almost almost every day to continue to to do those things that we need to do to keep going back to service our customers and stay ahead of the competition.
Gotcha.

[Wes] Well, let’s take a little bit deeper dive. We’ve kind of set the stage for getting change management, you know, ready to go, technology to come in. But if you would, take a look back at your, you know, careers, Stephen at O ‘Neill Steel, probably, Edwin, you at G .H. What are some of the hallmark stones, product launches, strategic initiatives that you guys look back on and say, wow, that was really the result of getting started, but really put a mark on how innovative your respective companies and teams were and what you’re able to accomplish. What really stands out to you guys?

[Stephen] So, I’m sorry. For me, you know, the hallmark or the one thing that jumps out when we start talking about innovation at O ‘Neal Steel at least is the development of Pronto, which is our e-commerce platform. At the time we did it back in the 2012, I think we started that journey of developing it. There really wasn’t anything out there in our marketplace, but we had this belief that we had to find a way to service our customers better, faster. They needed the answers faster than our salespeople could bring it back. And to get there and to get the company to buy into that, to me, is the start of all our journey. You know, there, it’s what unlocks us going forward of how do we service those things. To get to Pronto, which is our e -commerce, it really started with, we took a look at our IT group, and we spent a lot of time with the business saying, what do we need to spend IT dollars on? And it was the business that said three things. One, information to our sales, you know, providing our employees the data and information when they need it. It was keeping the lights on. Somebody’s got to keep the lights on, keep the systems running, etc. And the last one was customer experience. We needed to spend our dollars on making it easier for our customers to do business. So that was the pinnacle for me and it unlocks the future not to ramble but we we started that at the same time we started investing in new equipment new technology in the warehouse and so these two things were parallel paths of adoption and innovation in what we were doing.

[Wes] Yeah, I was really fortunate to be a part of the O’Neal steel team that was there pushing that effort and one of the things I’m gonna pull out of this conversation is further down the road is how there’s really a big oversight to invest in one side of the business meaning warehouse technology without sufficiently looking at what are the commercial pieces to really support the customer experience and how taken out of balance it can really cause great stress in the organization we’re going to get to that in a little bit but Edwin what about you from a from a milestone standpoint what really stands out in terms of the the big punctuation marks on y ‘all’s journey?

[Edwin] Well certainly as mentioned earlier the the first real ERP system that we implemented and that took a long time I mean it really and we continued to improve that to match our needs every day and the next big thing was our first laser I mean that really changed the game for us I guess to some extent we became quite good at it And the laser immediately led to the first CNC press break. And again, that was another game changer for us. Just the additional precision of the parts that our customers were starting to require. The laser cut quality versus plasma. There’s nothing wrong with plasma. It has its place too. But in the lighter gauge, the lasers really changed the game for metal fabrication. And CNC press breaks also. So that was three big milestones that I remember.

[Wes] Gotcha. Steven, to come back to something that you just touched on, you mentioned really Pronto, the strategic investment and equipment, and then I think also just to bring out for some additional context as we move forward, the decision to invest in the sector of fab, a quoting and estimating platform for the team bringing technology to support the jobs that those teams did and ultimately serve customers. So maybe a bit about that?

[Stephen] Sure. We couldn’t do what we do without that tool now. But at the time, we didn’t really know what we were looking forward. So as Wes pointed out, we had this journey. We were freeing up our salespeople to be salespeople. That was part of the message with Pronto. We’re not trying to get rid of any salespeople. We just want you to be able to sell instead of just entering orders. And then we built this equipment. And so our whole focus during that time was responsiveness to customers. And we invested in all this equipment. And we looked up one day and we’re like, we can’t quote anything. Like it takes weeks to get a quote back to customers. And we’re, you know, we’re still winning some, but we’re not winning what we could. And we’re not responsive to our customers. But that journey of technology allowed our people, the freedom to go, there’s a better way to do this. And they felt free to go look for a tool. And they found SecturaFAB. And I’ll never forget sitting in the first time we had a boardroom and I got to see the tool saying, why are we still talking about it? Like, go, do this. I mean, thinking about some of the stats, we’ve doubled our processing capability because of that speed we’ve you know quadrupled the speed at which we return quotes and it’s just to your point earlier about you have to have all these things have to work together you can’t invest in one and then have roadblocks in the other side you have to do it so the the journey to get there was all this investment we created a culture of technology but it was our people’s freedom to say I need something different to do my job. And that was when we found SecturaFAB.

[Wes] Yeah, that’s perfect. It kind of sets up too for that was a natural obstacle. Like as we were part of that growth, and as you told the story, it wasn’t all just falling perfectly into place. There were new challenges that got surfaced and they had to be tackled. So you called out one already. And before I jumped to Edwin, not specific to SecturaFAB, but Pronto, or just the evolution of the company in general through the lens of technology what were some of the challenges and headwinds that came up from a theme standpoint that you guys had to work through and lead through.

[Stephen] Well first and foremost and Edwin you said that I mean people are scared of change and so we had to spend a lot of time talking about change I remember we actually went back through the history where our business is a hundred years old plus now and we went through the entire history of the company and went through every kind of significant change that the company had made to show our people that changes it’s something new that all of a sudden we’re gonna change because of technology. No, we have changed throughout that hundred years. We were a structural fabricator, we were a distributor, we added processing, we grew, we did all these things along the way. So getting the company up to speed, the people part to me was the biggest challenge in doing that and convincing everybody that we weren’t you know if you’re a salesperson we have an e -commerce tool their immediate reaction was you’re just trying to get rid of me well no we’re not getting rid of any salespeople to do that so it was really the people’s side that was the biggest challenge.

[Wes] Gotcha I want to come back to that in a second but edwin if you would headwinds obstacles straight up failures and what stands out you know, from a punctuated standpoint or even themes that are really kind of shaping the way you approach what you’re about to do next with your business.

[Edwin] Yeah, well, I’ll have to agree with Stephen that the people are often, that’s the most difficult challenge because you need them. We all say it, you know, they’re our greatest resource and they really are, but they’re probably also the most challenging resources to be able to develop. And, you know, some of the we had we certainly didn’t have all successes there were lots of failures along the way the the ERP system what was a battle from day one at the time we had three senior partners or owners in the business and one of them felt like we didn’t need an ERP period and and one of them wasn’t an IT kind of wired guy so he pushed for it and the other kind of stood in the middle and watched, so you know we we got it done John got it done but it was it was not difficult more recently and that this is not recent either because Steven said time gets away when you you’re my age it really flies but we we had a robotic press break and the first thing the guy said every one of them in the press you’re just trying to get rid of me no we’re not you know and unfortunately that that was a failed project and we didn’t we didn’t handle it right maybe Maybe we didn’t tee it up right and as soon as we put it in place, it was an uphill battle. So again, back to the people and the culture and those things, you’ve got to set it up right. And I hadn’t heard that story. I love the story of going back and showing them, you know, we’re 100 years old. And gosh, if we were still like we were then, where would we be? So that’s good. We didn’t do it that well.

[Stephen] Just real quick, because your answer made me think of one thing when you talk about failures one of the first projects I worked on was we implemented a kind of an automated pricing optimization software it was very expensive we put it in and it failed miserably and we pulled it back out and we listened to the business and one of the pieces that that showed me it showed the entire company was you can try things and if you fail, it’s okay. We’re gonna try something different. But that was a big failure at the time. I was really nervous when we went down that path. But it did show that you have to be willing to try things and be willing to fail and then move forward and learn from it. And that was just, Edwin’s response made me think of that time.

[Wes] Well, it makes me think the story you told me a couple of weeks ago about that instance when you came to the realization that, hey, this is not going to work out. And you were a little bit nervous about going to the CEO at the time. But, you know, it was not you who gave the, okay, what are you going to do about it? It was someone else who’s like, all right, Stephen, what are you going to do? And what was that like? What tone were you met with?

[Stephen] Well, I was met with a positive tone. It was just, okay, if you don’t think it’s going to work, pull it out. What are we going to do next? And interestingly, though, the credibility that that by listening to the business, listening to the operator, listening to that and say, okay, that didn’t work, let’s take it out, let’s talk about how we still need better pricing methods. So how do we do that differently? And so really it was an opportunity too where they, you know, the business was like, wait, everybody’s willing to listen to me. And so we were able to build a platform from which we ultimately built an e-commerce channel. So we couldn’t have got there without these stepping stones, but it was by pulling it back out and listening to the business, listening to people say, this is why I don’t think it’ll work, we actually gained a tremendous amount of credibility through that process.

[Wes] Yeah, that sounds like it. And the piece that I wanted to come back to with respect to people, there’s really kind of two common themes, you know, being in the software industry, supporting the steel industry, there’s two themes we run into the most one just a resistance to change in general and number two is the fear that technology is here to replace my job so between those two any particular insights in terms of kind of leading through that process which did you find more often which did you find more challenging to work through just kind of open it up for that because that’s a we hear it all the time

[Edwin] Well, certainly we heard, as I mentioned, you know, it’s here to replace my job. What was the first? What was he? Just software changing what people do day to day, just the overall change management. Right. Yeah, change management is very difficult, as we already said. But most people are resistance to change, and, you know, there’s been many, many books written on that subject. But we saw both. Both i don’t know anyone any of those any of that more than the other but um certainly for the average shop guy they they seems like always the fear that they’re going to replace me they’re trying to replace me and and we never did that i mean their role might change a little bit but then again that goes back to the change subject if they’re going to change my job maybe i still have a job but i but I like my current role. I don’t want the new one. I’m not sure I’m answering the question. I’m not sure how you navigate that any better than just continue to push, and that’s part of doing business. We’ve got to change, or otherwise we’re probably falling behind.

[Wes]Yeah, I mean, I think that’s the way you answered the question is kind of the challenge at hand, which is there’s no silver bullet, right? There’s a lot of small lead bullets, and you just keep firing and you just keep pushing. But Stephen, you kind of opened up with it early. When you introduced Pronto, you said you had a pretty significant change management, you know, task at hand internally at O’Neal Steel to help people understand that what you’re trying to enable them to do is do their job better. And their job is not just keying in orders and data entry. There’s actually value in the sales process, and you are trying to free them up for that. Anything really stand out looking back at that at that that you don’t want to share with the group?

[Stephen] Well you know that’s a it’s a long hard process one thing that comes into mind though is you have to communicate you have to talk you also have to look at incentives and and think about how you’re driving people and if you know one of the pieces we missed early was we’re like wait a minute okay if a customer orders through pronto we have to make sure that our sales people get the the corresponding credit for that. Otherwise, they’re not going to push people. So you have to look at the entire package of communication and incentives and structure and the whole piece for it to work. The other leg, I hope I’m not going off topic, but the other leg of the stool when you talk about technology in our industry is I think there is a huge fear that we’re trying to use technology to replace one-on-one relationships. I mean, I still think this is an industry, and I believe it to my core, that people buy from people. You know, they want to know who’s on the other side of this transaction. They want to know that if something goes wrong, O ‘Neal Steel or Leeco or O’Neal Manufacturing will stand behind what they do. They want to know that laser needs is there if there’s a problem. But at the same time, people want it faster. They want it quicker. I mean, last week, my wife ordered a pillow at 10 a.m., and that night it just showed up. I was like, oh, my gosh, it’s already here. But people will experience that in their personal lives, and they’re starting to want that in business. And, you know, we have to think about technology as a way to enhance those relationships, not replace them. And so, you know, you talk about how it’s going to change your job, but it’s also we’re not trying to change we want you to have the relationship with person X we want you to know that person we want you to be there for him so that’s I think that fear in our industry is out there as well.

[Wes] Absolutely absolutely well kind of two two interesting parallels that you guys are both kind of helping us drive towards or and we’ve already touched on it but let’s just call it a disproportionate investment in warehouse technology equipment in commercial processes, right? We’ve had conversation about the impact that they had on each of your organization. So as you guys kind of surface and come back to it, Stephen, a tremendous amount of investment. And unfortunately, salespeople were right at O’Neal Steel. If we buy the equipment, the demand will come. And, you know, hate to validate a salesperson, but they did. It came. And Edwin, you all put a ton of processes in place in the warehouse that drove a lot of business as well, but each of you have shared kind of what impact that had, Stephen, you’ve already touched on the processing team and the use of SecturaFAB, but if you could kind of come back to the pain that we were really feeling there, and then Edwin, some of the processes that you guys had to put in place from a manual standpoint to just coordinate that effort, and then really what it ultimately ended up for you in your business with a customer profile mix, that was, you know, one that you said may have been benefited by reshaping a little bit. So Stephen, back to it, disproportionate investment in warehouse technology and commercial technology. What was the pain from that? What did you guys feel?

[Stephen] Well, we felt a lot of unhappy customers, ultimately. We did put in a tremendous amount of equipment. We went through this journey of we had a five -year equipment plan that was not only upgrading what we exist already had but it was investing in new technology and equipment and you’re right we looked up and we’re like we’re not good at responsiveness to those customers we can’t get these quotes back and we have to find a way to do it better and that led to you know SecturaFAB and the ability to be responsive to those things ultimately led to us making an investment in SecturaFAB and saying this is an opportunity or this tool can help us, but it can also help us as an industry. Because we send orders to people that we need, and we didn’t want to wait two weeks for a responsive, because then ultimately it affects our customer on the other side. And so, to me, it comes back to that speed and efficiency at what we’re doing, and you can have the best lasers in the world, but if you can’t get a quote back to somebody and you can’t be responsive. We’re, you know, we’re kidding ourselves if we think that’s going to be long-term successful.

[Wes] Yeah, absolutely. So, Edwin, I mean, that’s a perfect transition. You guys had the business come in, but in order to manage the inbound RFQs and the coordination of some of the more complex stuff that, you know, you guys did, talk a little bit about what that actually look like from an administrative standpoint and kind of the tax and drag that perhaps put on the organization.

[Edwin] Yeah, we weren’t really necessarily quick at quoting either, and we struggle with that, and to some extent, we just threw people at it, and that was, you know, looking back, that was probably wrong. We should have looked more, should have been more innovative and looked at software. We had, again, back to people don’t want to change. We had guys that were used to using a basic spreadsheet for quoting, which works okay, but not necessarily the most expedient way to do that. So when I left GH, we really hadn’t solved that completely. I think they’ve made some changes since then and invested in some software that helps them there. But I want to go back to something for a minute in the change, but now, you know, We put bonus programs in, too, and they work to some extent, but you have to continually adjust those for the business conditions and to get people motivated for that, and that’s difficult, too. But anyway, I just want to touch on that a second.

[Wes] Yeah, absolutely. Edwin, one of the things that we were discussing last night and had a previous conversation about was, you know, the processes that y ‘all did put in place really enabled a structure in a customer profile mix that was highly contractual and highly planned demand driven. And you said, you know, it might have benefited our business had we been a little bit more balanced. If you could kind of talk about why that was actually the case and what prevented you guys, commercially speaking, from perhaps having a more even distribution of, call it, transactional business versus plan demand to kind of level out what you guys were faced with.

[Edwin] we tried really hard to handle both of those markets with the contractual customers that would plan ahead and then the transactionals that maybe that usually needed stuff quicker and we really found it very difficult to do both well to begin with we weren’t fast at quoting we were we were typically we typically from those contract customers got several weeks to get a quote back and the transactional folks folks needed it much sooner than that. So we failed there. And then when it hit the shop floor, again, the transactional customer typically had to turn it pretty quickly. They didn’t give us a lot of lead time, and we couldn’t do that well either. We tried multiple times. We tried setting up a little mini shop within the plant to just handle those transactional accounts, that didn’t work either. You’ve got different quality standards that those different markets require and that was just so we sort of gave up to some extent in handling the transactional accounts and just evolved into mainly an OEM contract business.

[Wes] well Edwin you’ve touched on it and Steven you said it a couple times speed right there’s an expectation of speed and historically speaking I mean I remember the days of leading sales and estimating team where you would get a big package in of planned demand and you felt like you had time right and it gave you some breathing room but what we saw at the time what we’re hearing from customers is even planned demand business has a greater emphasis on response time than it used to so the transactional guys yeah if you’re not quoting in you know 30 minutes or an hour your phone’s ringing why don’t I have this quote it’s just a laser cut part but now plan demand is really seemingly increasing in its expectations. Have you guys felt that yet? I mean, is that starting to show up in your worlds?

[Stephen] 100%. You know, we have some of the reasons that you just outlined. We’ve got a manufacturing, O’Neal Manufacturing Services. There are 100% contractual planned demand. O ‘Neal Steel is more of the mix of and but the expectations of those OEMs are I want the I want to quote back today I don’t care what you know we’re looking at a part change I need the information back quickly and we have seen an evolution at OMS that speed is just as critical to that customer base as it is in the transactional world and so we’ve had this sandbox where we get to play in both areas. But the same factor of speed, it’s across the board.

[Wes] Edwin, did you start to see that change and expectation pick up, or have you seen it? Yeah, it goes back to the Amazon world that we’re in, the instant information being available instantly on our smartphones. That’s changing the expectation level for everybody. I think this next generation of workers, certainly my children who are in their 20s and 30s now, expect things to have much more quickly than I did. And I’m not sure how to answer all those in the manufacturing world, because that’s a real challenge. I mean, we could get you a quote pretty quick, but it’s probably not a very accurate quote yet. But if that’s what you want, we can get it.

[Wes] Good, Fast, and cheap, pick two?

[Edwin] Fast, cheap. Wanted to more, you know, yeah. That’s right. Easy. Well, this conversation has been really good.

[Wes] We have a couple minutes left. And we really want to drive this home here because as much as we’ve spent time talking about what you’ve done in the past with innovation, and I think we could go on for hours, Stephen, we’ve had this conversation. We could go on for hours about what the innovation really looked like, the stories behind it. But all that has really kind of driven you to say, I’m not done innovating. Our organizations are not done innovating. You’re taking all that learning and you’re doing something with it today. Tell me about that. Tell me what’s top of mind for O’Neal Industries in your role today with technology and innovation. Edwin for Laser Needs. What is technology and innovating with it have you guys thinking about for the next three, five years for your businesses and the teams that run it and those customers?

[Stephen] It’s a big question. I mean, I think there’s lots of areas that we continue to look. It’s technology that enhances relationships, no matter what industry we’re in, we’ve got a huge aerospace division, and how are we responsive to those customers and their needs? And so it’s using technology to continue to do those. I mean, if you’re talking about what the buzzwords of today are certainly AI. Everybody’s heard about AI. I mean, and the way we’re approaching AI is the same way we started back then. You start with small projects of how do you make your people’s lives easier. So we put all our policies into AI. And so they can just ask a question and get the information back. And ultimately, I think that will allow us to take the next step of how do we use the new technologies to make our lives easier. You know, I’ve always said the cool thing about our industry is we don’t have to invent anything. We just have to figure out how to apply that technology within our business.

[Wes] That’s good. Yeah. Edwin, how about you?

[Edwin] Yeah, I would echo all those thoughts. And I mean, I don’t know where AI is taking us, but I do know that over the years, as we got bigger, the algorithms, if you will, became too big for one person to process in their head. You know, what was the most effective schedule for today? And you can do that pretty well if you just have a small shop, you know, maybe a laser or two, a press breaker, to a welding station or two. But then as you get much bigger than that, it’s really difficult to do that. So I think there’s huge opportunities there. I don’t know that software is there yet, but I’m sure people are working uh because there’s just it’s very complex algorithm lots of things to look at what’s my staff staffing level today what equipment is I’ve got a machine down today so then I got to rethink what’s the most productive schedule i got these customers screaming for parts and these might could wait a day but uh you know i need to contact a salesperson to see if he can call that customer and say hey can you give me another day here yeah and those kind of things For large shops, I think, would absolutely be huge if that kind of software technology was out there.

[Wes] Well, we’re really flattered to be able to support both O ‘Neal Industries and Laser Needs. And as we’ve gotten to know your guys’ needs, we’ve helped enable some of the technological relationship enhancement between the two companies. So, Stephen, maybe if you could talk about the opportunity that Stella presents for Edwin, to work with you guys in a capital-light synthetic expansion way, if you will. And Edwin, what that means for you and your business with working with O’Neal Industries through the RFQ process, et cetera.

[Stephen] Sure. When we think about how we utilize our partners and equipment, because sometimes our equipment’s full, sometimes we don’t have the right equipment, that process is very cumbersome and has made us not want to do it. When y’all were able to develop, you know, just take the RFQ process and streamline how we’re able to communicate with Edwin and his team and share that information back and forth in a way that we can track it, we can look back. I mean, I think we’re always driven by what happened the last experience and so you get confused, but if you have the ability to see what we’ve done in the past and what we won and what we didn’t, I think you make better decisions. And so it’s been able to help speed. The real -time pricing component of, in the past, I would have to go to my spreadsheet and then go call somebody. Call George Kame, as we talked about, and say, hey, give me a price for this steal. And that just adds complexity and steps and time to the process. And so all these features that Stella has been able to do, we are using and they are making us better every day. We’re able to do things faster and more efficiently than we ever have.

[Wes] Yeah. Edwin? Sorry. I lost you. So we’re just talking about how technology, we’ve spent a lot of time earlier talking about technology enabling relationships. And O’Neal Industries and Laser Needs right now are piloting some really cool things to strengthen that relationship that has mutually beneficial aspects to it. From your perspective, what are you seeing from technology kind of pushing that forward?

[Edwin] Yeah, and Stephen touched on that. Certainly, a quicker response when we need steel quotes would be nice, instantaneous, and then communicating with our customers too. That’s two things that would be very beneficial for us if we continue to improve those and then you know just more real -time feedback I guess from shop floor conditions which I know that’s pretty complex thing okay do you know what is the actual what capacity we have open right now because part of that is okay if a customer is needing something quickly can can we fit that in or you got to hang up the phone and go find the production supervisor and I talk to them okay then his first question is well how many hours we’re talking about Well, yeah, I don’t have that. So, you know, all those kind of things, the more data that’s available quickly to make those decisions, I think that’s huge.

[Wes] Good deal. Keeping eye on the time here, we have a couple minutes left, and I want to make sure we get to some questions because I think James said we have at least one or two coming in. As we wrap, though, for the group, what advice would you give to anyone who’s really kind of staring down the barrel of innovating with technology like hard question but you’re here because you’ve done it so what would you give.

[Stephen] Well we’ve talked about it the entire time I think the technology is just the tip of the iceberg that’s you know that’s just the this what you see above the surface it’s it’s looking at your business talking to your people building that trust with your teams if we’re not trying to replace you this is going to help us get better but it’s spending You know, I always say it’s spending 10 times as much time on the people as it is on the actual technology component.

[Edwin] And the dollars there, I don’t know how many of the audience are small business privately owned, but that’s a big risk. And I think, you know, if you’re talking about spending a lot of money on buying another piece of equipment or even, you know, software can be pretty expensive too, right? That’s a big investment. And I think a lot of times those investments happen in the small companies more than do the larger because the the owner makes that commitment then he spent that much he’s going to make it happen he’s going to do whatever it takes to make that successful and if he doesn’t it you know it really hurts and in larger companies that willingness to take that risk and put your you know I made the decision about that piece of equipment then you know that may hurt your career opportunities of that company down the road if it’s not successful. And there’s only so much you can do when you’re one person in a large organization. So I think you see a lot of the innovation, and I think everybody knows that, and innovation is a wrong word, but willingness to take those risks and spend that money in the smaller organizations much more than the large ones. But, I mean, there’s exceptions to that.

[Wes] Yeah, Fantastic. James, if you want to, guys, the floor is open. So if you have a question, raise your hand, we’ll pass you a microphone. Or if you have already texted your questions in,
I’m going to read those off. If we run out of time, we’d love to find a minute to connect afterward and go further. Let’s see here. I’m a PC guy, not a Mac guy um let’s see we’ve already talked about this here Stephen are you you touched on it earlier are you willing to share or able to share any data points around what these sales technologies have generated for the teams at O’Neal Steel.

[Stephen] So I think I did touch on it from a speed standpoint. I mean, we’ve been able to double our processing growth. I will tell you that we have added, we’ll call it 60 % volume and distribution without adding additional salespeople. Through the use of Pronto and our customer-facing technologies, it’s not just order entry. It’s talking to our salespeople about what are the things you get calls for. What are the things you get emails about and finding ways to automate those things to continually free them up to service their customers. So, I mean, it’s significant growth with very little additional resources ultimately.

[Wes] Okay. Edwin, this is more directed to you, but you mentioned earlier that the customer in order mix could have benefited from perhaps more balance. So two questions.
One, any idea what the ideal mix would look like? And number two, what would it have taken, we kind of answered this already, but what would it have taken to facilitate getting to that mix?

[Edwin] Yeah, those are good questions. I think the ideal mix in my mind would be 70, 30 maybe, so 30 % transactional because your contract customers do go up and down. There are cycles there, even seasonality within the year. And then we found ourselves during those soft times looking for something to do. Then we poked the salespeople, go out there and find some more customers, and they would find them, and then we wouldn’t do a good job servicing them, so they wouldn’t come back. And then when we got busy again, we’d almost kick those customers to the curb, the transaction one, saying, well, we don’t have time for you now. So 70, 30, how would you do that? Wow, you know, I think you almost need two separate organizations to some extent. And I think some companies have done that. I think O’Neal did that. We didn’t solve that riddle, obviously, but we kept trying to do it internally with maybe a small shop in the shop and it just didn’t work well. I mean, again, it’s different, it’s different speed. It’s different quality expectations. And to teach a guy, okay, it’s this quality expectation for this set of customers, but this quality expectation for this other set, you just, you just confused the heck out of that for them. So I think it’s two separate organizations.

[Wes] Okay. And we’ll call this our last question because we’re right at time here but I think it applies to both and again includes answers that have already been given kind of partially but as each of you grew it sounds like you grew a lot how did you manage the RFQ process specific question with people with process with technology with a mix but essentially how did the RFQ process have to manage all that growth.

[Edwin] Well we threw, as I said earlier, we threw people at it to begin with, which is not necessarily the right approach looking back. And we, then we slowly added technology to do that, but probably not at a fast enough pace. We just continue to add more people. You know, I like to, and I’ll be quick with this, I consider quoting as two things, And they are quite different. There’s the science of quoting and the art of quoting. And the science is understanding what your cost are. And you can get pretty good at that. If you spend enough time to evaluate the parts, especially if it’s well and a semi complex. But the art of quoting is, you know, what’s the market, what’s the customer willing to pay for that part? And that’s almost more important than the science to some extent. And I don’t know how you automate that that’s that good salesman right right.

[Stephen] I mean just for us it was the same thing we threw people at it we threw people at it too we couldn’t throw people at it anymore and it just it wasn’t getting better and then that was when we we finally opened our eyes to technology and frankly shifted some of the the bottlenecks to other areas and You start, you throw a few bodies at it, and then you’re like, well, wait, we can’t just do this, so how do we get better? But for us, you know, you look back and you’re like, yeah, we started with bodies. I think everybody does. But we didn’t really unlock the potential until we threw technology at it.

[Wes] Yeah, I mean, nothing happens for a business until something is sold, right? And so finding a way to make that easier, more accurate, and be a better overall experience for the customer. I feel like that’s the piece of change that’s accelerating at the fastest rate for the industry. It’s going to be really incredible to see what happens over the next three or four years. I certainly appreciate the insight that you too have brought and look forward to watching what you guys do with all this technology and knowledge of how to go deploy it. So thank you for your time.