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
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."
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
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
"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.