July 2017
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NASA Turns Over Keys to the Co-Op

By Dan Markham, Senior Editor

May 1 marked the end of an era in the steel distribution business, as Lonnie Terry and Miles Donovan stepped aside from their positions atop the North American Steel Alliance. For two decades, Terry and Donovan oversaw this singular operation in the steel supply chain, the purchasing cooperative.

NASA was formed at the end of 1996, and the pair came aboard six months later as president and vice president. At about the same time, a study on the future of the steel distribution business predicted that in the coming years, the large companies would get bigger, the small companies would become more niche-oriented, and the middle companies would get squeezed out. Only the latter never truly materialized, in part because of the work of NASA.

Shortly after the organization’s forming, the steel production industry underwent tremendous upheaval, with a rash of bankruptcies followed by extensive consolidation that left mill ownership in a small number of hands. There were numerous models that emerged over the years to deal with the massive changes in the industry, such as Metals USA’s initial roll-up efforts, the U.S. Steel directed-sale program and ill-fated Enron, Terry notes. The only one that lasted was the purchasing cooperative effort launched by NASA.

With producers such as Nucor, Steel Dynamics and Zekelman Industries acquiring assets across the supply chain, the strength of NASA will become more apparent in coming years, Terry believes. “The time may come where producers and distributors are choosing sides to solidify their positions. NASA is in an enviable position, as no one comes close to the organization in terms of purchasing power of carbon products.”

NASA has been successful, he believes, in part because it has always thought strategically. Invitations for new memberships, whether to suppliers or distributors, were proffered based on the needs of the whole association. New programs for building relationships between the two sides of the steel buy were regularly developed and enhanced. Additional data collection efforts are being developed, “which makes us a much more valuable entity to suppliers.”

In retirement, Terry remains bullish about the prospects of the steel industry. Where the steel sector was once considered decidedly “unsexy,” its embrace of technology at all levels makes it a far more attractive segment for the next fleet of workers. “The industry has a little sizzle. The distribution industry, and metals in general, will have a good run at quality people.”

That assessment extends to the organization he left behind. Mike Wagner, who had worked with NASA as a supplier company sales and management rep, has taken the reins, and has a solid team to support him, Terry says. The one piece of advice from the old boss to the new: “You inherited something that has a very solid foundation. Build on it.”

I think I know someone else who can follow that advice.


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Tuesday, October 24, 2017