Hoffman, outgoing vice chairman of Klockner USA Holding Inc.,
recalled the best and worst of times in managing an enterprise
in North America.
globalization and shorter economic cycles will test the
regions competitiveness even more in the years to
Hoffman, who is
retiring from the U.S. scene but will remain with South
Africa-based Macsteel Group, spoke of his career highlights
during a recent interview with AMM.
The roughest times for
Macsteel, "undoubtedly, were the early years. I became involved
in managing the U.S. businesses in 1991. We were relatively
inexperienced and were not well known. We had difficulty with
suppliers, with banking lines, making ourselves known to
customersand this was exacerbated by an aggressive
acquisition policy," Hoffman recalled.
struggled to turn around the finances of some of its American
acquisitions. But time and attention paid off "and all
stakeholders were eventually satisfied," he said. Todays
distribution landscape "bears very little real resemblance to
the industry I came into 30 years ago."
The main trend has
been "a huge migration from wholesaling into
quasi-manufacturing." By investing "huge amounts" in
technology, equipment and operational skills, service centers
took over processes that used to be performed both by metal
producers and metal-consuming customers, according to Hoffman.
They developed metallurgical, engineering and technological
skills required "to provide value-added service at low cost."
That forever changed the identity of service centers from a
"middle man" that merely broke down mill coils and marked them
too. "Service centers stepped into a role previously occupied
by producers and owed it to them to do it properly in a
responsible and efficient way," he said.
sophistication blossomed and they are now more integrated
within the supply chain, Hoffman said, noting that "both
producers and service centers make better money under this
On the sell side, the
relationship with customers is "more respectful, more
understanding and has an enduring aspect as (both sides) are
more appreciative of common goals."
Over the next decade,
the industry will continue to evolve. The future will be marked
by extensive globalization by way of acquisition and ownership,
the lightning-fast exchange of information and the influence of
cycles shorter, which cause service centers to use less
inventory to achieve the same objectives. We cannot rely on a
traditional payback period and so we can no longer be exposed
(to risk) for a long time," Hoffman said.
will continue to drive productivity, competition and
profitability, he added.
"It was very nice to
be (Metal Center News) Service Center Executive of the
Year (in 2011) and a great honor to serve as chairman of (the
Metals Service Center Institute)," he said. "It was great to
see Macsteel Service Centers USA Inc. reach the position it had
among its peer group prior to being acquired, and another
highlight to see the Klockner takeover proceed so well, in an
amicable and mutually beneficial way."