In this article you will discover the reasons why several steel stakeholders have turned into metal service centers and you can explore the strategies they have adopted to make this change.
In addition, you will be able to watch an excerpt from the seminar, "Laser Cutting in Structural Solutions", sponsored by BLM GROUP and the Steel Promotion Foundation, showcasing the success of carrying out this path by SICAM S.p.A., using Lasertube technology.
What pushes many steel stakeholders to become metal service centers?
Over the past few years, the steel industry has faced significant demand fluctuations while maintaining consistent production levels. This situation has prompted producers to leverage their bargaining power to gain greater control over the distribution network.
Distributors, especially those of intermediate size, thus found themselves squeezed between large groups that include steel production within them and small groups that manage to be competitive by working locally and operating in limited market niches.
To preserve their independence from manufacturing, distributors have begun to focus on adding value to their products, offering a wide range of services from design assistance to adding machining to provide the end customer with finished, ready-to-use products.
Many distribution groups for tube, sheet metal, and other steel products have thus chosen to expand their fleet of machinesto increase margins on product sold and secure future opportunities.
How to achieve this transformation
Distribution companies have two main strategic options:
- specialize in depth on specific market segments;
- broaden the range of services while maintaining the broadest scope of action so that they can then focus on the desired segment once they have retained customers.
One way to approach this first strategic choice is to divide one's customer database into segments and carefully analyze order history.
Based on this information, it then becomes possible to initiate a dialogue with your customers to understand their needs: is there additional processing they wish to perform on the purchased material? Are they able to handle them by themselves or are they dependent on external suppliers? Do they need consulting in design or production?
Having traced a complete overview of the downstream supply chain, it is then possible to define the best strategy for focusing future investments.
Optimizing spending capacity is essential, to avoid wasting resources and to ensure effective coverage of the entire desired scope of action by purchasing the necessary machinery, hiring new resources or expanding the services offered.
Among the various solutions for the processing of tubular products such as tubes, beams, plates, angles and profiles of the most diverse sections, modern Lasertube systems stand out for their versatility, high degree of automation and production efficiency. Features that make them one of the most advantageous choices for turning your distribution company into a service center.
SICAM S.p.A. case history
In the video below, you can watch an excerpt of the speech by Massimo Fasolo, Technical Department Manager of SICAM S.p.A.'s Laser Department, and Luca Prasso, Area Director at SICAM S.p.A., during the seminar organized by BLM GROUP and Fondazione Promozione Acciaio entitled "Laser Cutting in Structural Solutions."
During this presentation, you will discover how SICAM S.p.A. has successfully expanded its business from a "pure" distribution company to a service center, thanks to the versatility and efficiency of BLM GROUP's Lasertube systems.