Reibus International's Trading Platform Helps Rebalance The Supply Chain And Pacesetter Is One Of Its First Customers
A universal problem for the manufacturing sector is as follows. “You constantly have too much of what you don’t need and not enough of what you do need. Your sales team provides a forecast and you make purchases accordingly. But then a customer changes his mind, a salesperson was overambitious, there are weather-related delivery problems. Or the opposite happens—a new customer comes in or a regular client wants more material on an existing contract. There is a constant push and pull of having enough inventory but not too much, or not having enough at the right time.
“I have been focused on that for years,” says John Armstrong, a former procurement executive with a $500 million annual spend. “Despite all the work, imbalances still occur.”
Armstrong and David Bain—both of whom previously worked for Omnimax International, a building products manufacturer—co-founded Reibus International Inc. in May 2018. Armstrong is CEO and Bain is CTO. Bain is a supply chain and programming specialist. “He is a full stack developer, building databases, web sites and systems,” Armstrong says.
Members of the team at Reibus International, Peachtree Corners, Georgia, work to help customers locate materials that fit their specifications.
Not unlike the metals e-commerce platforms of 20 years ago, Reibus is an online B2B marketplace for prime, excess prime and obsolete materials used in industrial, transportation and construction markets. Its primary function is to reduce friction in the supply chain by moving inventory efficiently.
Steel and aluminum mills want to produce as much as they can to achieve a maximum capacity utilization rate. “But the roofing panel maker has contractors working on 48-hour lead times with a thousand product choices. So they all hold excessive inventory in the supply chain to try and match the supply constraints with volatile demand.
“We want to help our customers reduce inventory, increase sales, improve margins,” says Armstrong. “How do you do that with really good availability so you can say yes to customers? How do you increase sales with long lead times, and get inventory simultaneously?”
If the sales side of the business succeeds, inventories shrink. “We are trying to bridge the gap, level out the peaks and valleys.”
For a Reibus seller with excess inventory, there’s very likely someone who could use that material to fulfill an immediate order. “Buyers will find your product on our website. This can allow some [companies] to be more brave with their growth strategies. They have a place for their excess material. If you take a position on inventory and made a mistake, it’s not the end of the world.”
Reibus can help improve returns on scrap, too. If a service center bought a product at 50 cents a pound, and because of aging can normally scrap it at only 7 or 8 cents, it can recover a much higher amount with Reibus,
Armstrong claims, “Our platform is very easy to use,” easier than scanning many service centers’ pages-long internal inventory lists. “You can find the product you want in three keystrokes.”
Reibus built a proprietary quick-search tool. “Start typing the word and it finds the item. We list the product with standard nomenclature.” Often there are several descriptions for the same product. Whether 24-gauge, 0.30, 0.276 or equivalent sizes—whatever you type in, it brings up all those options. “Our platform has built-in machine is learning: When a customer types in roughly what they need, it will still bring up results. You don’t have to type it exactly correctly to find what you are looking for.”
Multiple parameters are input for other features, like coating colors. Many customers have their own paint names, but it’s actually the same paint code and the same paint as another supplier. “For example, ‘light stone’ is a popular color and there are many codes and naming options for the same chemical formula. Search for one paint code, it gives you everything that matches,” says Armstrong.
When someone becomes a seller with Reibus, they receive an onboarding kit. They fill out a spreadsheet to describe each product for sale. If the information appears incomplete, the system has prompts to validate the accuracy of the information.
“Say the seller wants only 30 cents on what’s marked prime but no date is given. Meaning it was rolled in 2012. Well, you cannot call that prime,” says Armstrong. “We catch issues before they post to the site. We push sellers to be accurate. We want to provide the correct information. For seconds we ask for the explicit faults, if the coil has a wavy edge, is scratched, pitted or just aged. The seller puts that in the comments.”
Meanwhile, coil numbers, tag numbers, mill certifications are all traced.
“We are very transparent with pricing. We take a margin on each transaction because we arrange the trade, take the credit risk, arrange the freight. We take care of all the paperwork. We make it as easy as possible for the seller and buyer,” Armstrong explains.
In addition to moving excess prime and secondary products, Reibus sells prime material. If a seller wants to grow revenue or find new revenue streams, it will list prime. Then, in case they do sell it themselves or repurpose that material, they can simply delist it.
Pacesetter usually sells prime material and uses Reibus to offload excess prime and secondary.
‘Let’s give it a try’
Patty Goldstein, inventory audit and compliance manager for Pacesetter, Kennesaw, Georgia, says she was looking for outlets for secondary and excess material. “Because we are a prime material house, we were worried about tying up sales time with products outside our expertise. We invited Reibus in to conduct a presentation.”
Initially, she says, “we had some metal building inventory we could move through them. We said, let’s give it a try.” What she found of value is there is “not a lot of work or commitment required. We pay a monthly fee, $199—that is nothing. We populate their spreadsheet, send it up to them and it appears on their website,” Goldstein says, describing this as a clean, streamlined process.
“What we especially like is Reibus is the middleman. It simplifies the process for us. We can send new lists as needed. With their customer base, they market it so you don’t get bombarded with calls or have to make a lot of calls to move the material.”
In addition, “we have never had claims against the material we sold. We describe all the defects in the spreadsheet. If Reibus has a customer that wants more information, we can give them the chemistry and pictures,” she says.
“This is an outlet for slow-moving material, which allows us to improve our inventory turns. We aren’t having sales reach out to 20 potential buyers. We have one contact. And it’s not a big risk. This is a good tool to have in our pocket.”
Of the Pacesetter relationship, Armstrong says, “This has gone better than anticipated. We thought we would ship a few coils here and there for them. We have sold over 1 million pounds in four months, just with Pacesetter. Overall, we are now shipping almost a million pounds per week of steel and aluminum for our customers.”
Armstrong welcomes the comparison to 1999. “Back then, e-commerce technology wasn’t great and the market wasn’t ready. Twenty years ago, Amazon sold a couple books.” Now, everyone shops online and, as metals industry millennials get promoted to supply chain management positions, “they will demand to have an e-commerce platform solution. They don’t want to get a Rolodex and call 50 people if they have a problem; they would rather ‘Reibus it.’ We might be a little early, but as the new generation moves up in the industry, this will be normal.”
Reibus built this tool to scale up. “The platform can handle 5 million coils on the same day.”
Armstrong and Bain say the personal touch remains present. “We pride ourselves on customer service. There are industry people behind the e-commerce. We know it’s a leap of faith for some—they hear ‘solutions platform,’ ‘IT,’ ‘the cloud,’ and fear it’s not for them. They don’t need to have the technology and resources themselves; we’ve taken care of it for them. And what’s the worst thing that happens? We sell your stuff.”
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