Fabricators weigh in on what they expect from their service center suppliers.
Today’s service centers must wear many hats in order to give fabricators what they need: quality, predictability, price and responsiveness, to name a few.
Service centers must be readily available and responsive, according to Stacy, Minn.-based Wyoming Machine Inc. “Being able to call a service center and have a customer service representative that’s available and can respond quickly is really important for us,” says Lori Tapani, co-owner and co-president, adding that this is especially crucial when requesting a quote. Wyoming Machine purchases all its material from service centers. The fabricator’s customers are from diverse industries – from large OEMs to defense, aerospace and navigational equipment.
“One of the things that matters for us is that our service center has a good grasp of who we are as their customer,” says Tapani. For example, suppliers need to be aware when Wyoming Machine accepts deliveries. “We work nine-hour days in our plant, and our second shift works four 10-hour [days], so it’s nice if the service center knows when you accept deliveries,” she says. “It’s hard if the truck shows up on a Friday at 10 o’clock, and there’s no one here to unload it.”
Stan Hulett also looks for predictability in receiving material. He is the general manager and vice president of Mack Hils Metal Fabrication Inc., Moberly, Mo. “The vendor where we buy our materials delivers to us twice a week, so that’s the kind of service we’re used to,” he says. “It means that we can keep our inventory relatively low, so that if we order on Mondays, typically we can have the material on Tuesdays. If we don’t have it or can’t get it on Tuesday, we will get it on Friday, so we can have pretty much any material we need within five working days.”
His business is located about halfway between Kansas City and St. Louis, so fairly removed from a major metropolitan area. “We just ask for the best price that goes along with quality delivery,” he says. “Sometimes they ask us to order a specific minimum in terms of pounds to justify the delivery, but most of the time we can accommodate that request.”
The business describes itself as a build-to-print fabricator. “We sign non-disclosure agreements every day to keep our customers’ proprietary information confidential. Then if we win the quote, we just start making the part,” he says.
Price, availability and quick access to material are must haves for Sterling Jensen, CEO and president of Richards Sheet Metal, Ogden, Utah. He describes his business as an “oddball” in the fabrication industry, as he identifies Richards Sheet Metal as a job shop. “We need to be able to quote everything within 24 hours, and once we get a PO from a customer, we can have it out to the floor,” he says. “If I’ve got material in stock, [a customer can have it] that day. If not, I can have it out there in a couple of days. I very rarely wait more than one or two days for material.”
Richards Sheet Metal’s largest customer is the airline ramp services industry. The company builds jet bridges and the air conditioning units that hang onto the jet bridges. Its second largest customer is in material handling. The business also does a lot of work in the food processing, pharmaceutical, construction and automotive industries.
Fabricators are happy when suppliers exceed the required service. “I like when the service centers we’re working with have the ability at a higher level to provide market trends and forecasts that they’re seeing; that’s very helpful for us. It’s always nice to get that email, sometimes it’s from the outside sales representative at the service center that will send a periodic message, especially when things are changing so rapidly,” Tapani says. “Over 26 years, we’ve gone through periods where there’s just been drastic changes in the price of materials. So it’s nice if your service center can communicate well about what they’re seeing.”
Jensen is also pleased when service centers go above and beyond for his sometimes-unique needs. He purchases nearly all his material from suppliers in the intermountain area. “We tend to do work on occasion on DOE or other projects for manufacturers that have some fairly stringent material criteria,” he says.
For example, a couple of years ago the Switzerland-based locomotive-assembly company Stadler opened an operation in Utah. Through his service center suppliers, Jensen was able to obtain the material he needed to serve Stadler. “A lot of [the company’s] designs and engineering are designed around European-based alloys and thicknesses, and so one of the things that we struggled with was being able to find material,” he says. Stadler was strict about the type of aluminum to be used for this project, as well as enforcing strict time constraints on receiving the parts. “We actually air freighted aluminum in from Europe to make the first parts of the job, but one of the things we appreciated is our suppliers being willing to go out and look for the odd [material] and see if we can come up with a way to source that through them,” he adds.
Efficiency is also key. For Tapani, it’s minimizing extra steps. She has communicated to her supplier that confirming purchase orders can be done in person rather than through yet another email. Generally, Wyoming Machine is trying to move toward having less paper submitted upon material delivery, but this goal seems elusive. “One thing that I would think would be relatively easy – and that we are not having great success in – is receiving the material certification documents digitally,” she says, adding that this is preferable to receiving the bill of lading and material certifications upon material delivery. “I’m not sure what constraints or what the service centers have going on on their end – but it just seems like [a digital copy] is difficult to get.”
Communication is the heart of any relationship between service centers and Jones Metal Inc., Mankato, Minn. The fabricator receives approximately 95 percent of its materials from service center suppliers. “One thing I talk to my vendors a lot about is, if you’re not going to hit your due date, I need that communication from you. That is a huge thing in my opinion,” says Senior Procurement Specialist Molly Fritz. “If it’s 4:30 p.m., and I expected your truck here today, and I don’t see it, that gives me a bad taste.”
Jones Metal provides advanced metal fabrication solutions for OEMs in various industries, including power generation, nuclear power generation, renewable energy, agricultural, heavy construction equipment and the U.S. military.
“Jones prides itself on its standards when it comes to metal and bringing in a quality product,” says Fritz. “When I get new reps that just come into our account, there have been struggles getting them to understand we do have high standards and that we expect them to deliver on those.”
The company typically does not place high-volume orders. “We do a lot of low-volume high mixed parts making us typically order 10 or less sheets at a time unless it is one of our stock metals.” She adds the business buys in dollars, not in weight.
Fritz gets annoyed when a service center supplier underestimates the importance of Jones Metal because the company doesn’t always order a full truckload from its suppliers. “Sometimes I deal with people who think I’m a small fish and not worth their time,” she says. “If you look at the big picture, at the end of the year our dollars add up.”
The business also commonly faces transportation glitches from service centers. “One of the most common responses I get as to why a shipment didn’t make it is that they couldn’t get a truck under it,” says Fritz. “So the lack of trucking or available trucks has proven to cause hiccups. On-time delivery is key.”
Jensen’s wish list for suppliers includes more responsive pricing time. “I don’t buy on an index, so I’m usually going out monthly and looking at prices, so if there’s a way to interface [service centers’] pricing that they have with us without a big issue, it would be nice,” he says. “It would save a lot of phone calls and emails. The volatility in the market sometimes prevents that.”
Tapani expresses frustration with obtaining pricing in a timely fashion. “[At the service center,] I could be set up as a customer somehow and without too much trouble, I could just say, ‘Oh here’s the material I want,’” she says, “and there would be some system behind the scenes that would generate pricing.”
Despite their wish lists, fabricators are generally pleased with their service centers. “We get very high-quality material, and when I look at the performance of the service centers we deal with in terms of their on-time delivery and their quality, they’re excellent,” says Tapani.
“For the most part we’re receiving the material on the day we’re expecting to receive it, and that is a really appreciated thing.” Jensen says, “We have really been blessed because we’ve got four or five [service centers] in the intermountain area that are our go-tos, and they all are just really top-notch suppliers.”
Hulett is also happy with his suppliers. “They provide timely delivery of materials, they provide a competitive price, and the quality is equal to their competitors’ quality,” he says. ?
Caption: Price, availability and quick access to material are Richards ‘ prime concerns from its service center suppliers.
(Photo courtesy Richards Sheet Metal.)[Sidebar:]
Fabricators are well aware that many distributors have moved downstream, offering services typically reserved for fabricators. Sterling Jensen perceives this as a threat to his business. “I don’t like it. I don’t like to be in competition with them. I like to be more of an end-user provider,” he says, adding that recently a service center informed him that it had installed a Trumpf 5040 10,000-watt fiber laser. Richards Sheet Metal has paired up its own Trumpf 5040 8,000-watt fiber laser with a material handling system that feeds roughly 80-inch by 162-inch material for efficient, around-the-clock cutting.
The service center that disclosed their Trumpf purchase to Jensen added that it is going to start cutting its customers’ material. “From that standpoint, I’ll probably buy a lot less from them, just because they’re now my competitor in addition to being my supplier,” he says. “We’ll still buy from them when they’re the only guys that have [an item], but if they’re $5 a plate, and another business charges a little bit more, I will pay the extra because he’s not competing against me now.”
Jensen realizes, however, that service centers offering fabrication services “is just the nature of the business. [Some suppliers] are being pushed to offer additional services downstream, and I can understand that. I think it’s something we’re going to see a lot more of.” He adds, “I don’t necessarily like it because I have to buy the material from them, which they’re going to mark up to sell to me, and then I’ve got to mark it up to make a little bit off of it. Well, if they cut me out of it, they can sell it to the customer with their material costs; they’ve automatically got a cost advantage going into it.”
Other fabricators also understand that more and more service centers provide fabrication services. “At the end of the day, they are taking away some of the functions that metal fabricators get paid to do, so they are squeezing into our territory,” says Stan Hulett of Mack Hils Fabrication. “At the same time, we’re also one of those fabricators that from time to time uses those value-added services. We buy materials pre-cut or cut-to-length. I also understand that certain fabricators have their own limits to their abilities, and so service centers are stepping up to the plate and acquiring some expensive equipment to provide value-added services to materials. Do they call themselves fabricators? No, they call themselves value-added service centers.”
Molly Fritz of Jones Metal also sees the practicality of having service center suppliers performing fabrication work. “Right now we’re doing an overhaul on our laser equipment, and I’m heavily putting our weight of laser capacity to one of my distributors, so they’re doing the cutting for us, while we move the laser,” she says. “If our equipment goes down, there’s a service center that’s willing to cut our parts for us.” Understandably, this provides a safety net for Jones Metal.
Wyoming Machine’s Lori Tapani believes suppliers offering fabrication services has been going on for a long time. “I feel that this isn’t necessarily a new trend, and it ebbs and flows,” she says. And she believes that even though some suppliers are doing fabrication work, there will always be a need for specialized professions such as fabricators. “The way that I look at it as a fabricator, there’s a lot of higher level services that fabricators have. I haven’t lost a significant amount of business because of a service center cutting,” she says, adding that her company offers welding services, and this is a skillset she does not see service centers doing in-house.
Doug Borchers, president of Superior Aluminum Products, Russia, Ohio, does not feel threatened by suppliers offering fabrication services. “They’re not competing against us because we’re doing a custom-type item,” he says. “It’s actually a benefit to us because it gives us time, so I could buy a standard-length bar stock. If I can buy it in the lengths we want it, all the better. We’re busy. We need help. If [service centers] want to do some customization, that helps us.”
However, Superior Aluminum Products uses service center suppliers only five to 10 percent of the time. “A lot of [the material] we buy directly from the extruders; much of what we do is extruded with our dies and customized to our specifications, so we don’t buy as much standard bar stock or flat stock and so on, as we do custom shapes,” says Borchers. “If we’re going to a service center, it’s for something we need right away.”