When it comes to being recognized for overall excellence among service centers, it may be that bigger is better.
For the past four years, AMM has honored metal distributors with an award for being the best in the business, and three of those winnersOlympic Steel Inc., ONeal Steel Inc. and Reliance Steel & Aluminum Co.consistently rank in the upper echelons of service centers by revenue in AMMs annual rankings of top North American distributors.
This year, that trend is certain to continue but also to change, because AMM has divided the Service Center of the Year category in its fifth annual Awards for Steel Excellence into two segments: one for large companies, and one for small/midsize distributors.
Past winners have tended to share more than just big revenues; they also provide a large variety of products to customers, from aluminum to various steel products to stainless steel. As AMM looks ahead to this months awards presentation, here is an overview of what propelled past winners to the top.
Last years winner was ONeal Steel, which came in at No. 8 among service centers on AMMs 2013 list with $2.5 billion in annual revenue. ONeal, which provides aluminum, steel and stainless steel products, was cited by judges last year for striving to be fast, accurate and dependable in the service of customers. The Birmingham, Ala.-based company continuously measures its on-time delivery and quality rates to ensure it is meeting the expectations of its customers and is improving in both areas. Additionally, ONeal continues to reduce its operating expenses through purchase programs, the use of technology, employee training and the provision of a safe working environment. Lower operating costs allow ONeal to offer competitive pricing coupled with outstanding service, which in turn helps it retain customers. ONeal recently acquired an improved capability for new collaborative customer part drawing and part nesting, allowing all programmers to access the same program and database to enable cross-functional and cross-facility collaboration and more effective parts programming to enhance customer service in its original equipment manufacturers and job shop parts producing operations. ONeal believes this provides a far more cohesive environment within the activities in which any programmer can back up or replace production from remote locations at a moments notice. ONeal also worked to continuously improve its methods of material handling, preventive maintenance and predictive maintenance through the introduction of a standardized preventive maintenance software system to its facility network. The computerized maintenance management program has allowed ONeal to inventory all the equipment in its facilities, develop a standardized preventive maintenance program and create a standardized purchase order system. Additionally, ONeals safety program is driven by employee involvement and injury prevention.
Olympic Steel, the winner of the award in 2012, was ranked No. 12 in revenue last year with about $1.4 billion. It offers a number of steel products to customers. Olympic Steels Chicago Tube & Iron Co. subsidiary in 2011 installed one of the biggest tube lasers in North America, the Adige LT14. The introduction of the equipment significantly expanded business opportunities for Olympic Steel and Chicago Tube and provided a new range of capabilities for customers. The Adige LT14 automatically loads, cuts and discharges tubing up to 14 inches in diameter and 40 feet long. Bedford Heights, Ohio-based Olympic Steel acquired Chicago Tube in July 2011. Olympic Steel and Chicago Tube executives had worked together for many years on trade association initiatives and continue to be focused on growth within their respective market segments and the long-term success of both organizations. About seven years ago, executives at both companies noticed that major accounts increasingly sought one-stop shopping.
The winner of the award in 2011, Reliance Steel & Aluminum, ranked No. 1 in revenue last year with $8.1 billion. Reliance, which offers a range of aluminum, steel and stainless steel products, became the largest metals service center in North America primarily through a two-pronged strategy of improving and growing its existing businesses and through a highly selective acquisition strategy. Reliances strategy focuses on profitable growth, not just top-line growth. Because of its successful growth strategy, which focuses on profitable growth as well as product, geographic and customer diversification, Reliance posted five consecutive years of record operating results from 2004 through 2008 despite fluctuating demand and pricing in many of the markets and for many of the metals it processes and sells. The business is mostly focused on small orders (the average order in 2010 was about $1,300) and quick turnaround (50 percent of orders are customers calling today and wanting metal tomorrow, the company said), so each of its locations has its own inventory and processing equipment necessary to service local customers. Reliance believes it has some of the best operators in the industry running the different businesses, and it leverages this knowledge across the company to achieve best practices in many operating areas. In response to the severely depressed economic conditions in 2009, Reliance focused on maximizing free cash flow and reducing debt by maintaining profitability and working capital management, with a focus on stringent inventory and expense control. As a result, it produced a record cash flow.
The winner of the first Service Center of the Year award in 2010 was Misa Metals Inc. (MMI), which does not report revenue to AMM for the annual ranking of distributors. MMI, which ships flat-rolled, processed steel and aluminum to more than 200 customers in the United States, Mexico and Canada, has differentiated itself by vastly improving customer service, support and retention initiatives while restructuring its management team and overall culture. West Chester, Ohio-based MMI offers value-added steel and aluminum solutions to customers in the automotive, construction, appliance, food, medical and aerospace industries, among others. The company, which increased its volume by more than 200 percent in 2009-10, has implemented improvements in safety, quality, productivity, technology, customer service/technical support, on-time delivery and commercial transactions, and developed a coating process to apply dry-film thixotropic lubricants (at plus or minus 10 milligrams per square foot per side) at its tension level and cleaning line.