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The steel or aluminum mill is at the head of the metals supply chain. But buying directly from producers is not the only option for service centers, who often prefer to tap other companies, master distributors, for their metal needs.
Historically, master distributors served as an extension of the mills. They frequently have stocked more expensive or niche alloys, allowing smaller distributors to buy in less- than-mill quantities. They also remove redundant and excess inventory from the distribution channel. Taking advantage of a nearby master distributor allows a service center to empty hard-to-move stock from the shelves, which aids their all-important inventory turns.
The unprecedented conditions of the recent past have only highlighted the key role these companies play in an effective supply chain. The rapidly escalating pricing environment made replenishment of stocks more challenging, particularly for cash-strapped companies. Additionally, the low levels of depot stock at the mills made these suppliers invaluable for service centers and others looking for material.
But their value exists under normal business conditions as well. Service centers can source small quantities from a master distributor rather than place a large mill order, extremely important when the item is not one a service center typically moves. More and more service centers have
come to rely on these valuable supply chain partners.
Some companies in this listing exist exclusively as master distributors, selling only to service center customers. More companies dabble in the practice, selling to competitors in the same way they would an end-user or fabricator.
Over the years, MCN’s annual Directory of Master Distributors has steadily grown, now including approximately 261 companies that describe themselves as full- or part-time master distributors. Some actively market their products and services, while others take a more passive approach, only supplying material on a customer’s request.
Master distribution has grown from primarily specialty alloys such as stainless or tool steels to encompass almost all products, including carbon, aluminum and red metals.
Though the supply chain is still evaluating the just-in-time model that has dominated conversation over the past decade, it’s still unlikely the supply chain will revert to carrying huge stocks of material. This means master distributors will continue to play an integral role in the metals distribution market.