What Does A Steel Service Center Do

Service

The basic functions of a metal service center involve stocking programs, Kanban programs, and inventory direction. Manufacturers need a reliable availability of metal which they can take delivered ideally next day. This allows the manufacturers to decrease the inventory they demand to house and, in doing so, increase their cash flow. Information technology is important to understand the needs of your customer, and be able to predict what those needs will be in the futurity.

"The showtime word y'all take highlight in the proper name 'service center' is 'service,'" says Joey Johnson, VP & Regional Sales Director at Kloeckner Metals Corporation. "Our customers are coming to united states because they need the actual raw textile, only they besides need a service. They need commitment services. They need processing services. They demand credit services. All of those things are why service centers are really in business in the beginning identify."

Inventory direction is ane of the almost important roles of a service centre. It is crucial to keep enough stock to encompass customers through dips and spikes. At the aforementioned fourth dimension, you cannot hold so much that crumbling or obsolescence occurs. You are paying interest with no return. Y'all also run the risk of reduced profit or loss due to potential negative fluctuations in the steel commodity pricing.

"It'due south a balancing human activity," Johnson says. "You lot have to exist very nimble with your inventory."

The price of steel, mill pb times, customer demand, and customer forecasts all decide what this balance needs to look like. While steel service centers often have contracts with their manufacturers, they are ordinarily indexed. Any way y'all cut it, steel is a commodity, so the price is going to fluctuate with the marketplace. Forecasting the price of steel is important, equally is the ability to find and adapt to changes in trends.

"The timing is critical in our inventory management," Johnson says.

Value

In addition to these basic functions, metallic service centers need to effigy out how they can offering other services that add together more value for their customers.

"Nosotros know that nosotros can't just do the standard ABCs of our business and be viable long term," Johnson says. "And so nosotros have to continually challenge ourselves with, 'How exercise we create more than value?' A service centre needs to create and capture value."

One way to create value is past providing fabrication services. In cases where the manufacturer is fabricating the parts in-house, this allows them reduce or eliminate some non-cadre processes. This, in turn, allows them to do higher value-added work in their facilities.

If the manufacturer is getting their fabrication services done through a third party, this creates logistical complexities betwixt the service center, fabrication service, and manufacturer. Dealing with multiple entities can create cash flow bug, every bit well equally liability issues. If there is damage to the product, you have to decide whether information technology was damaged past the service heart, the fabricator, or during transit between the two. By getting the fabrication washed at the service center, you lot eliminate these problems.

"It's kind of a one-finish-shop, if you will," Johnson says.

Digitalization

Another mode Kloeckner has created value is through their digitalization strategy. Kloeckner has introduced a tool called "Office Manager." This allows customers to view their inventories in real fourth dimension, 24/7. They tin place orders at any time, through the application. It is web based, so information technology can exist accessed anywhere by a computer, tablet, or phone.

"In the beginning we all scratched our heads and wondered how much value would exist perceived, because it really is a perception of value by the client in this case," Johnson says. "As we started to roll the concept out to a few key customers, the reaction we got was overwhelmingly positive."

This tool cuts out a lot of fourth dimension and effort on both ends. Earlier customers would take to ship an email order or asking for inventory and wait for a response. Employees at the service centre would then have that email and manually enter and guild into the organisation, or create an Excel spreadsheet to input inventory details. That procedure was inefficient.

With a tablet, a customer tin now actually go out onto the floor and order your inventory while he is looking at what he need. He tin can view his parts history, measure previous forecasts against reality, and meet how much is prepare, all in real time.

"He can walk through the aisles and look at, 'okay here's what I need.' He can order information technology on the spot," Johnson says.

Diversification

Another primal to a successful metallic service center is to exist diversified. By offer a variety of services and products a service center can provide more solutions, create more value, and improve weather commodity fluctuations in the market. Having a broad offering helps a service center use its full strength to a broader market, too every bit with a customer that has a broad range of needs in products and services.

"Nosotros proceed to strive to diversify our offering to our customers, and so we aren't tied to just one matter," Johnson says. "We're in a very competitive landscape. With the business concern nosotros have, companies are looking for solutions-based partners. You have to find ways to create that value proposition for your customers to remain viable, as well as producing a return that warrants the investment by our visitor in people, equipment, and inventory."

Learn More

If you like what you lot are reading, feel free to check out our previous blog posts on topics such as prepainted steel, galvalume metal roofing, enameling steel, pvd and aluminum.