The metal marketplace is changing due to many economic forces. These include dwindling economic stimulus packages, expiring automotive manufacturing subsidies, and tightening monetary policies. These forces are making it difficult for the metal industry to grow.
Metal service centers are among those that are likely to be affected by this slow growth. Process optimization is essential for metal service centers that want to meet their margins and be successful.
There are many ways that businesses can become more efficient and effective. Some methods are more popular and effective than others. Here are three methods you can try:
1. Reduce Costs in Raw Metal Conversion
The vast majority of metal that comes into metal service centers is in raw form and needs to be converted into a more useful format. This usually involves rolling the metal into coils, which requires a lot of power and expertise. The costs associated with this process, called conversion costs, can be quite high.
For most metal service centers, the roll-forming setup is an essential part of the conversion process and can cost anywhere from $200,000 to $2 million. These costs, combined with machine maintenance fees, can significantly impact the bottom line.
Reducing expenses is key to running a successful metal service center, and there are a few ways to go about it. Firstly, by running high volumes and offsetting the cost of installation and maintenance, companies can generate a good return on investment in their roll-forming equipment.
Secondly, careful deployment of equipment can mean that metal service centers don’t need multiple roll-forming lines to process different materials—most alloys have similar physical profiles and can therefore be run through the same machine with only slight adjustments. By making these small changes, metal service centers can lay the groundwork for reducing conversion costs and optimizing operations.
2. Enforce Efficient Inventory Management
Metal service centers are important for small to medium-sized manufacturers because they offer easy access to inventory and other necessary services. These service centers must strike a balance between stocking too much and too little inventory to avoid damaging their budget.
Metal service centers can help facilitate effective and balanced inventory management by conducting regular inventory checks to determine how much stock is on hand and how often it turns over. This information can help businesses adjust their inventory levels to ensure they have enough products to meet customer demand but not so many that they go to waste.
3. Decrease Cycle Time
Some metal service centers try to get through workloads as quickly as possible without much preparation or baseline metrics for how long certain tasks should take. This causes production ambiguity, mucks up operations, and degrades service quality. However, process tracking and improvement can help to solve these common problems.
Metal service centers must keep track of how they do things and set minimum standards for job completion. Splitting coils and cutting them into smaller pieces takes different amounts of time. By figuring out how long each part of the job should take and writing it down, businesses can plan their production capacity for different periods, like shifts, weeks, months, and years.
This helps them avoid wasting time and resources and makes their process faster overall. Even small improvements can make a big difference for the company and help it be more successful.
There are many ways to optimize operational processes for metal service centers. Service centers can improve efficiency and quality while reducing costs by streamlining processes and improving department communication.
In addition, service centers can further improve their operations by investing in new technologies and training employees on best practices. By taking these steps, metal service centers can become more competitive and better able to meet the needs of their customers.
KGS Steel Birmingham is a full-line structural steel and carbon steel service center warehouse that has been servicing the southeastern United States since 1985. We offer a full line of carbon steel products and processing with the quality, commitment, and services that are demanded by today’s industrial sector. If you’re looking for a steel processor in Birmingham, AL, get in touch with us today!