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MCN Case Study: Greer Steel

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Greer Plant Does Double Duty By Dan Markham, Senior Editor Greer Steel has long been one of the few companies to operate as both a producer and a service center. Now, the company is doing both out of the same facility. In North America, the steel supply chain has a well-established division of labor. Mills make the product, independent service centers distribute it. One notable exception to that model is Greer Steel, Dover, Ohio. The privately held company, part of Morgantown, W.Va.-based Greer Industries, is a nearly 100-year-old cold-rolled strip producer. It also operates a separate service center, making it one of the few remaining North American producer-distributor steel companies. Since 2014, the company’s two separate divisions no longer share just a common owner, but also a building. It’s a combination that has changed the business in many ways. “It has opened up some opportunities that weren’t available to us in the past,” says Todd Daenzer, Greer Steel executive vice president. The mill business was founded in 1917 by Agnes and H.C. Greer to produce quality cold-rolled strip steel. Today, the mill produces high and low carbon alloys, HSLA and ultra-HSLA, and stainless steels. It also offers a range of finishes, including LaserMatte, embossed and bright. Greer Steel cold-rolled strip is available in thicknesses from 0.020 to 0.187 inch, in grades 1006 to 1095, and alloy and HSLA in tolerances of plus-minus 0.00025 inch. The mill sells into a variety of end markets, including automotive, appliance, bearings, cutlery, hardware and metal stampers. It counts service centers among its largest customers—most notably its own. In 1947, Greer Steel opened a service center in the Detroit area, where many customers were located. The service center served as a healthy outlet for mill product, typically around 15 percent of its output. In the last 20 years, however, as manufacturing shifted southeast, Greer executives began to consider bringing the service center under a single roof with the strip producer. “We had a long history of shipping products from Dover to Ferndale, Mich.,” says Daenzer. “At the time, there was an extremely rich population of small stampers in that area. As time wore on, we saw consolidations and a shift in where that stamping was being done. Some of our product was being shipped to Detroit to be processed, only to be shipped back south. From a logistics standpoint, that starts to get spendy.” Relocating its long-established service center wasn’t done without a lot of thought. “The biggest concern with the move was to ensure that there was a smooth, uninterrupted transition from servicing our customers out of the Ferndale location to the Dover location,” he says. The company completed the consolidation of its service center operation with its mill in 2014. Fortunately, with more than 800,000 square feet of space available in Dover, about 80 miles south of Cleveland, it had the space to accommodate both. So the move did not impact customers, the company began double producing to stockpile inventory in Dover while it sold down the inventory in Ferndale, making for a more seamless transition. Greer Steel’s service center operation still provides the same processing services. It maintains a number of slitting lines, cut-to-length lines, an edging mill and temper mill. It also upgraded some of its capabilities with the move. It is now able to run 63-inch OD coil on its dual-head slitting line compared to 52-inch previously, among other improvements. The company also converted a portion of the building into a humidity-controlled storage room for use by the service center. “It allows us to maintain inventory for a long time without risk of corrosion,” he says. The more significant aspect of the relocation, however, is how it improves efficiencies, the company claims. Greer Steel’s service center buys most of its material from its sister mill, purchasing a few products for regular customers from other producers. Now that it shares an address, it no longer has to put that material on a truck and ship it to Detroit for processing. Instead, a fork truck takes it to the other side of the building in a matter of minutes. “You don’t lose a day in transport, where there’s potential risk; there could be a wreck, there could be weather.” Daenzer says. “It has allowed us to become much more responsive to our customers’ needs.” The move also opened up additional business opportunities for both the mill and service center. The company has long maintained customers who buy both mill-direct and smaller quantities from the service center, depending on their specific requirements. They still do, but now those shipments can all go on the same truck. For some mill customers, the service center was not cost-competitive when the material had to come out of Detroit. Now they can buy from Greer, but in smaller quantities. “It’s made us much more flexible and helped our ability to accommodate our customers’ demands,” he says. The company still serves its existing customers in Detroit. Rather than sending material there to be processed and warehoused, it ships from the Dover location. The one drawback is for customers who used to pick up their orders when Greer’s Michigan location was along their normal “milk run.” Greer is working with each customer to find a solution, Daenzer says. The value of the move isn’t limited to logistics. By sitting side by side with its mill, the service center can optimize its equipment. If the service center side of the business is pressed, it can avail itself of the mill equipment, and vice versa. However, Daenzer notes, the service center does not take a backseat to the mill, which is one of the reasons the model of mill-owned distribution failed in the U.S., he believes. “Some places try to fold it in completely, where the service center is a tiny portion of the mill order, and the mill people wonder why they’re doing that work. We still look at it as a separate business unit,” he says. Still, buyers needed reassurances that the change in address wouldn’t change the company’s focus on customer service. Service center customers have different expectations than mill-direct buyers. Maintaining a high level of responsiveness was imperative, Daenzer says. “That was a distinct concern from our customer base when we announced. ‘What’s it going to do to our service?’ they asked. ‘We know if we order from a mill, we’re small fish.’” Greer executives assured customers that wouldn’t happen, and took steps to confirm it. The plant manager from Ferndale, Bill Scott, was brought down to run the operation in Dover. A dedicated inside salesperson, Bonnie Edwards, remains committed to selling exclusively to service center customers. Prioritizing the equipment’s use is key. Only after all of the service center orders are run through the slitter or shear will Greer look to backfill with mill orders. Careful management of all the assets is beneficial for both sides of the business and will strengthen the business-case for future equipment purchases. “The move has worked out better than we thought it would,” Daenzer says. Greer Steel At-a-Glance Address: 624 Boulevard, Dover, Ohio 44622 Fax: 330-343-1700 Website: Facilities: Cold-rolled strip steel mill, plus service center. Employees: 137, cross functional across two business units Products: Cold-rolled strip steel, with additional offerings in flat wire, sheet, hot-rolled, hot-rolled pickled and oiled. Grades range from 1001-1095, 1500 series, 4100 series, 6100 series, 8600 series, HSLA grades 035-0080, Ultra-HSLA grades 080-160 ksi min yield and 400 series martensitic stainless steel. Tempers EDDS through full hard. Edges 1-6. Finishes available: No. 1 matte, No. 2 commercial bright, No. 2 best bright, No. 3 appliance finish; Laser Matte, Embossed pattern finishes. Gauges 0.015-0.187 inch; widths 0.450-27.5 inch. Services: Slitting, pickling, cold-rolling, 100 percent hydrogen annealing, shearing, edging, surface embossing, JIT stocking programs, A2lA/ISO 17025 metallurgical lab, conversion/toll processing. Equipment: 34-inch-wide push-pull hydrochloric pickle line, 60-inch-wide heavy-gauge slitting line; two 4-high reversing mills; three 2-high temper mills; 14 Ebner 100 percent hydrogen anneal bases; narrow cut-to-length line; 60-inch-wide light-gauge slitting line; two slitting lines with edge gauging; two wire mills for producing flat wire; edging mill; single-head oscillating line; band and packaging line.

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