Service Centers
November 16, 2014
Changes to Steel Purchasing as Role of Service Centers Shifts
Written by John Packard
Jodi Parnel, Vice President of Supply Chain for O’Neal Steel spoke to the AWMI conference attendees on Friday of this past week. During her presentation Ms. Parnel explained how purchasing has changed since she began in the industry in 1998. “Service centers,” she explained, “no longer fill the gaps in a weak supply chain.” Steel mills have become more efficient and many now have floor stock from which they can pull to service customers that may have gone to service centers in the past.
Twenty years ago 25 percent of total steel consumption was sold through service centers. At that time a number of mills owned their own distribution. Service centers tended to be privately held and the owners negotiated most of the deals and many of the purchases would be speculative in nature. They also had the option of dealing with a lot more mills.
