June 25, 2014

Could a Mill Supply Both Steel and Aluminum?
 
Why couldn't a mill make both steel and aluminum? As both materials fight for the upper hand in future automotive designs, perhaps it's time for a combination supplier, suggested John Lichtenstein, Accenture managing director of metals, in his remarks at last week's American Metal Markets/World Steel Dynamics Steel Success Strategies conference in New York. "I'm raising the possibility—probably heretical for everyone in this room--that the time may have come for a multi-material solution company."

The metals analyst quickly acknowledged the many issues facing such an operation. Producers that have tried to offer both materials "have track records that do not compel emulation." Managing competing materials with different raw material sources and value chains is challenging, as is deriving synergies between the two. And it doesn’t necessarily guarantee the company a hedge against customer material choices.

Still, he said, there is enough logic behind becoming a total solutions provider that the idea demands consideration. Customers are looking for more technologically advanced, complete solutions for their design requirements. The company that can provide that one-stop shop may gain the upper hand.

"Some aluminum companies have strong expertise on managing extended value chains, which steel companies could learn from. And steel companies now have the tools to manage more complex multi-material organizations that generate increased shareholder value," Lichtenstein said.

While his suggestion did not generate any vocal support from the steel industry executives in the audience, it did prompt a few comments from subsequent panelists. Such food for thought takes awhile to digest.

For more coverage of the Steel Success Strategies conference and both sides of the automotive materials battle, see the July issue of Metal Center News.

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Friday, June 23, 2017