Steel Service Centers Benefits to the Steel Manufacturing Industry
Do you know what steel service centers actually are? A steel service center is actually a facility that purchases raw steel materials from a steel manufacturing company and sells it to a customer. Often, steel service centers will process the steel into a usable product that the customer can use directly out of the box or that only requires a small amount of modification before the final pieces are finished. A steel service center acts as a facilitator between steel manufacturing companies and the factories and companies that actually use the steel parts to create new products.
A steel service center is a somewhat new concept to the world of manufacturing. In the 1930s, less than 10 percent of all steel traveled through the hands of a steel service center. Today, up to 45 percent of all steel products travel through steel service centers. This is largely due to the implementation of Material Requirements Planning programs that require the delivery of production-ready metals to complete manufacturing processes sooner. Most metal manufactured and used in the United States has encountered a steel service center at one point in the production process.
While there are a few disadvantages of using a service center, such as increased costs, and additional processing time, there are also many benefits to using a service center. These benefits include:
Faster order completion
Less factory space
Lower equipment expenses and maintenance costs
Precise order specifications
Greater product variety
All of these benefits add up to help many manufacturers and factories complete their orders without hassle or trouble. The benefits provided by service centers outweigh the cost of using a third party in many cases. In the future, it is likely that more and more factories will continue to take advantage of the services that a steel center can provide to the manufacturing process.