Do you know the Value of a Service Center?
Service centers play a central role in the HSS supply chain. They provide enormous value in the delivery, availability and fabrication of HSS. I want to reinforce the value that service centers provide for fabricators throughout the structural steel industry, as well as discuss some of the lesser-known benefits.
What is a Service Center?
Service centers buy steel in large quantities from manufacturers and stores the material until it is sold to a customer. Service centers act as a warehouse for small and medium enterprise businesses (SME), where the minimum amount of steel, which the manufacture sells, may be more than the SME requires. This saves the SME from buying a surplus of steel and having to store their own inventory.
Service centers are an essential part of the structural steel industry. An estimated 70 percent of the total HSS used in construction projects in the U.S. flows through a service center at one point or another. Service centers increase the availability of material for fabricators by holding large quantities from multiple producers during each rolling cycle. It is not unheard of for a center to have over 10,000 tons of HSS available and ready for delivery.
Service centers allow customers to choose from a large, readily available inventory, while only paying for the steel they need, when they need it. This reduces or eliminates peripheral costs in inventory, pre-processing equipment, processing personnel and trucks.
- Readily available material
- Costs are known and fixed
- Delivers not impacted by fluctuating rolling cycles
- Fabricators can buy exact quantities
- Fabricators won’t have a surplus of inventory to be store
- Improved cash flow management & schedule efficiency
Aside from the general benefits that service centers provide for fabricators, they also have their own unique pre-processing capabilities that can be performed according to their customers’ requirements or preferences for a project.
- Material order nesting
- Cutting to length, cambering
- Miter cutting and tee-splitting
- Plate shearing, forming, or shape burning
- Supply and delivery
Ultimately, understanding what a service center does and the value that they provide makes knowledgeable decisions that will optimize project management. For a complete list of service center locations throughout the U.S., or to get more information, visit .
All information from: American Institute of Steel Construction
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