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Is Sharing a Bigger Part of Distribution’s Future?

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The upcoming opportunity for calendar flipping has got us naturally looking ahead to the new year, and what we can expect for the metals supply chain. Notably, how will trade issues will again affect pricing and availability of metals. Likewise, what kind of impact tariffs will have downstream.

Richard Oppelt of Accenture says the answers to these questions might come through innovation.   

“I don’t know whether it’s going to entirely manifest itself in 2019, but I think some trends will begin to emerge seeing the service center portion of the supply chain look to become even more closely attached to the upstream portion of it,” says Oppelt, Accenture’s senior principal director within the metals and mining practice.

The most obvious way to do that, absent captive ownership, is through sharing information. Digital technologies and other ways to share demand signals and forecasts are imperative “so that all the parties can develop a trust and take costs out of the supply chain to make the pie bigger. I can see this as a way to cement keeping some of their customers on shore,” he says.

The push toward digitalization could also propel greater consolidation in the business, following a busy year for service center M&A.

“For the investments in digital to make sense, you need bigger scale. That will create a competitive advantage for those that are larger players,” he says.

For more from Oppelt and other industry analysts on the outlook for 2019, see the January issue of Metal Center News.