Case Study - Why is the steel service centre culture committed to investing in the cheapest beamline with limited capability, automation, speed or service reliability? No wonder value can not be provided to every profile competitively

Case Study - Why is the steel service centre culture committed to investing in the cheapest beamline with limited capability, automation, speed or service reliability?  No wonder value can not be provided to every profile competitively

Why is the steel service centre culture committed to investing in the cheapest beamline with limited capability, automation, speed or service reliability? No wonder value can not be provided to every profile competitively

  1. As steel service centres have never won work or profile from adding value to the steel profile they don’t believe any additional income is available from the fabricator.
  2. The steel service centre has convinced themself that the fabricator would never want to pay a higher price for what is a price driven sale that has been commoditized as all the steel service centre is supplying the same scope so the only defining decision is the price and delivery
  3. The fabricator that invests in the beamline from SMS will use the competitive advantage for their workshop and not supply these advantages to their natural competitors if they were contracting out excess capacity to local fabricators.
  4. The fabricator can often contact excess capacity of their bemaline to the steel service centre who is seeking a faster delivery to the market when using a fabricators excess capacity to close their deliveries.
  5. Steel service centres and their clients have become used to receiving limited value included in their steel profiles.
  6. They offer their basic & cheap beamline functions from 1990 designed technology so they don’t need to order the current capability to increase the investment price on the beamline.
  7. Steel service centres can experience challenges understanding how steel is fabricated, read 3D drawings and sell any added value that they don’t really understand in the first place
  8. They understand & are motivated by price & delivery to win their orders from their natural competitor that is offering the same scope of supply so the steel service centre margins are reduced and commoditized by a price sensitive sale and the fabricators who purchased processed steel know it and the best price or delivery will win the contract.
  9. Steel service centres are reactive and if the client doesn’t ask for the additional value the steel centre won’t ask? The service centre then thinks their clients don’t need or want additional value on their profiles.
  10. The steel service centre can never understand why a fabricator orders a beamline instead of purchasing basic processed steel from the steel service centre.

Steel service centres motivation & culture

  1. Steel service centres are concerned their culture isn’t sophisticated enough to have work in lights out or be able to sell the additional value to their clients so the higher specification machine capability won’t be utilised based on the centre’s historical processes and empathetic approach to understanding what the fabricator really needs.
  2. Why these companies don’t want to save their clients 40% from their workshop bench and charge accordingly if they order beamline machines from SMS. The steel processing cost the fabricator is paying will be self financing from the savings the fabricator is making when not having to do these tasks manually with skilled labour that is now redundant as these processes can be automated through the SMS beamline.
  3. The people specifying beamlines for all the steel service sites are not visiting their clients understanding how to specify a beamline to add value to solve these fabricators problems. They can’t really solve their problems anyway as they are committed to investing in the cheap beamlines without the capability to solve their clients problems which forces the fabricator to invest in their own beamline.
  4. The steel service centres are being constantly challenged to keep their cheap beamlines running for more than 35% of the working hours in every month.
  5. It is more comfortable for these national companies to like what they know and know what they like.
  6. Even if the steel service centre ordered a beamline from SMS they would be under-resourced to measure the gap in capability that drove additional revenue and profit into their business after investing in a bemaline from SMS.



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