Two templates, two giants and a live testing ground

Oct 01, 2007 | 12:45 PM |

A battle has been building in the service center industry for a few years now. The major protagonists, of course, are Reliance Steel & Aluminum Co. and Ryerson Inc., the two largest players—by some distance—in the sector.

The two Rs have competed on several fronts for business and customers, for bragging rights and to claim the mantle of No. 1. More importantly, Reliance and Ryerson have represented two rival business models—ideologies, even—of ownership and operation in one of the most critical links along the supply chain.

Reliance, which has risen to the top of the pile through an extraordinarily aggressive acquisition campaign, is not really a large service center at all. Rather, it is an umbrella organization that owns a multitude of quasi-independent businesses. As long as these businesses meet certain metrics or performance measures, the service centers in the group are essentially free to do their thing. Reliance carries out certain key functions, most important of which is probably counting the mountains of cash the company has made in the past few years.....