SCHAUMBURG, Ill. Norman E. Gottschalk Jr., president of Marmon Distribution Services Inc., had a rocky start to his career in steel and expected to get out of the industry within six months.
Now, after 45 years with the Butler, Pa.-based company, Gottschalk will retire at the end of January 2014.
Gottschalk sat down for a chat Sept. 10 with AMM during the Metals Service Center Institutes (MSCIs) Economic Summit. He has served in MSCI leadership roles for many years.
"When I left International Harvester to join Tubular Service Corp., I didnt realize how bad off they were. I was in accounting and we got our paychecks first so wed go immediately to the bank to cash them."
Gottschalk told himself he would stay three to six months "and then Im out of here. But then, steel got in my blood."
Those were the days of pen and paper and enormous, noisy bookkeeping machines into which accounting clerks fed cards. "There was all this clackingyoud have a headache by the end of the day."
The company installed its first computer in 1970. "We thought we were the cats meow," he said. Larger than a credenza, it had 16 kilobytes of memory. "The smallest iPhone you can buy today is 16K."
Business moved at a leisurely pace. "Our outside salespeople would visit a customer, then mail us their order. If they called us, it was really a rush order. Someone had to write up the order here and then post (it) in the Kardex system."
A customer would be lucky to get his order delivered in a week to 10 days, he said. Today, 85 percent of incoming orders are delivered the next day.
"It used to be most customers ordered truckloads of material and didnt worry about inventory. They became more sophisticated and ordered half a truckload, then eventually bundles. Then they asked us to kit material for them, three to four pieces they can assemble," he said.
The next big development was value-added processing. Gottschalk read a book about virtual manufacturing and said, "We can do this."
"I called my executives together and said, We are going to manufacture. They looked at me like I was nuts and said, We dont have any equipment. "
Instead, Marmon used select customers to fabricate parts for other customers, thereby avoiding competing with them. Since the early 1990s, "we built that into over $150 million worth of business, making finished parts," he said.
"The day of a service center surviving just by selling lengths of unprocessed material is fading. You cant just sell tubing or plate. Its just a total commodity," Gottschalk said.
Service remains key. "Every service center in the United States has in-depth knowledge on their customers. They know what the customer wants, anticipate their needs and deliver on time."
When Gottschalk became president, Marmon/Keystone LLC had eight locations. It now has 61 branches across the United States, Canada, Mexico, Holland, Singapore and the United Kingdom.