Many customers have already signed first-quarter supply contracts while some are taking a wait-and-see approach despite the current pressures on the supply chain.
Traffic control
Downtime allows leaders the space for strategic thinking and planning about how best to respond to a paradigm shift
By Corinna Petry

n the website, people replied to an invitation to fill in the blank, “When life gives you lemons, ___________.” One enthusiastic young guy from India responded, “Ask for more. Become a lemon trader. Sell lemons at a price lower than the prevailing market price. Build a company which sells lemons. Become an international lemon selling brand. Have profits in billions. Keep asking for more lemons.”

That, of course, is a winning attitude. Jeff Haas, president of Cleveland Metal Exchange, and Hugh McNenly, president of CME’s Aluminum Division, are two leaders of a team that went through some dark days before they could figure out what to do with the “lemons” given to everyone by the coronavirus outbreak.

In the beginning of lockdowns, during early spring, barely controlled chaos ruled the day. “We worked from home almost three months. I would get a call from one sales rep, then another, then I would call the first one back, then the other. I was spinning in circles, and my head would pop off at the end of the day,” Haas recalls. After being pushed out of his home office into the basement by his young son, “I turned into Jack Nicholson from ‘The Shining,’” he jokes. “But what came with that was creativity.”

CEO Randy Horvat and President Jeff Haas have had the chance to study the business in depth and create new ways to communicate with CME’s customers.
Ninety-nine percent of CME’s business is conducted over the phone, “so we may never have met many of our customers before we make the first sale. Despite the fact that CME doesn’t have a brick-and-mortar presence, we engage in business all over the country,” says Haas. My partner and I [CEO Randy Horvat] typically have so much air traffic every single minute of the day—a hundred emails an hour, dozens of calls a day, quick meetings.”

Due to the slowdown in activity as a result of the pandemic, “We were able to look at the business up at the 30,000-foot level and spend time thinking more strategically—and differently—on how to arrange the puzzle and how to best buy and sell and interact with customers.

“We had never looked at videoconferencing or other similar platforms before this. So we started using them to ‘visit’ customers,” he says. “We are now creating a studio in our conference room with multiple cameras, microphones and speakers to be able to conduct better touch points. We will use the space to conduct webinars.”

This is a way for customers to see CME’s people, says Haas. Sales reps can go through the marketing material and answer questions live. “We aren’t just a telemarketing voice on the phone. This is something we should have done before.”

What also leapt out of the creative process is a virtual showroom. “We sell metals to people who make things. We are gathering products that our customers make. I have a mobile camera in the virtual showroom. So after a meeting ends, we can take the mobile camera and show viewers the products made by our customers and the industries we serve.”

Creating content
CME is aware that not having salespeople on the road can be problematic, but other service center chains have invested large dollars in communications technology. In the sales department, “expense accounts, big salaries, commissions and cars will go by the wayside,” Haas predicts.
The company is planning a series of webinars to reach customers—aluminum market updates, stainless market updates, “and we will feature experts,” he explains. “In January, we will have the CEO of a large investment bank give his outlook. We are just trying to layer up more touch points.”
This virus has chosen winners and losers. It’s simple but profound.
Jeff Haas, cleveland metal exchange
According to McNenly, “One of our touch points is trade shows. It is hard to say how and when they will go forward. Often, the only real customer contact we had took place at those shows.” On the other hand, there is a cost savings to not attending trade shows, and he is interested in how that industry will evolve.

Meanwhile, says Haas, “We are trying to give customers a miniature trade show, show them what we are. This is better than a voice over the phone.”

Americans, says Haas, have short memories. “When the virus is in the rearview mirror,” only then will people realize the full impacts of the global crisis. “There was a TSA effect after 9/11,” he says, referring to the heavy security protocols for air travel. “So what do we pursue in 2021? What are the ‘TSA effects’ from the virus? There will be several, we think, like continuing to use space dividers and plastic shields.
“This virus has chosen winners and losers. It’s simple but profound,” Haas says. “Let me give real examples. We have two accounts, both large OEMs. At the peak of this, one manufacturer was down 60 to 70 percent. Why? Social distancing on the assembly lines. The company that was producing 70 trucks per shift went down to 25 trucks.
Aluminum strip-in coils stacked
“We have another account that makes a luxury product for pickup truck beds. Starting in summer, they were up 60 to 70 percent, working seven days a week. People are not dining out or vacationing but are buying trucks and boats and RVs. We had a boat trailer manufacturer that enjoyed one of its biggest quarters ever,” says Haas.
Demand outlook
The new year is not likely to start out strong, no matter how much companies are champing at the bit.

“As long as there are good therapeutics or a good vaccine rolling out, the second half of 2021 will go through the roof,” Haas predicts. CME already saw two of its best months in September and October, as measured by order entry rates. “Everyone knows where they are, so things have stabilized for the moment.” Many customers have already signed first-quarter supply contracts while some are taking a wait-and-see approach despite the current pressures on the supply chain.

Until then, “we will sit, wait and watch. As we get to end of Q1, we will see the setup for second quarter. Now that the election is over, the economy is poised for a rebound.”

Haas believes there is pent-up demand for everything. “Think about hotels that sat empty and repairs that have to be made. Restaurant equipment and food service-related industries are still in the midst of a slowdown. But at some point next year, there will be a massive explosion in demand.” Perhaps restaurants will be smaller, and they’ll do more carryout business, but even that scenario requires new equipment, he says.

CME’s leaders are bullish. “We have seen hints among our customers. We are here to support them.” The company provided extended terms, held inventory longer and accommodated smaller shipments to help customers weather the dry spell.

CME leaders discovered ingenuity inside the company, and deployed a strategy toward a rebalancing, Haas says. “All scales need to be calibrated multiple times, and we keep learning from our experiences.”

Cleveland Metal Exchange, Twinsburg, Ohio, 800/337-5512,