Steel & Mills essays

Steel & Mills essays The market had also seen an increase in steel service centers, which essentially are distribution centers for the mills. What these centers would do is buy large quantities of steel from the mills, cut the large chunks up and distribute them to customers. This added value to the industry because it allowed the end user the ability to buy a quantity of steel that was more efficient for them instead of having to buy from the mills where they were required to buy larger quantities and waste was high. The only concern to end-users was the efficiency of delivery. Since the advent of Just-in-Time inventory systems, which significantly cut inventory costs to companies, the service centers had to slow inventory as well to cut down on their increasing inventory costs. Since the cut to both inventories was relatively high, but the demand for the steel was increasing it sometimes caused bumps in the road as far as efficiency of delivery. This in turn caused the mills to strike back and th ey started creating price structures that were more favorable to the end-user rather than the service centers. Competition is increasing because of the higher demand for the steel service centers. The increase in demand for steel products has also caused competition to rise. SOS has three service centers and is tops in most of there divisions which is about a 200 mile radius around each service center. SOS seems to have such a good reputation because of their friendly service and their price structure. They remain very competitive in relation to other service centers, and they also are very loyal to customers especially long time customers. ...