What Is A Service Center?

A Steel Service Center buys steel products in large quantities from producing mills and holds the material in inventory until sold to a customer. When a service center sells steel it will perform any processing the customer requests, load the steel and deliver it to the user. Service Centers usually offer varying degrees of material "pre-processing." Pre-processing involves basic cutting services, such as sawing, shearing, and shape burning to cut material to a size and/or shape that is either immediately usable by the customer, or greatly reduces the customer's time to make the steel usable. The type, quantity, and sophistication of pre-processing services offered by a particular Service Center are determined by the Service Center's product and customer mix. But about seventy percent of the metal passing through Service Centers undergoes some form of pre-production processing, such as slitting, shearing, sawing, grinding, flame cutting, coil coating, and cutting-to-length. The existence of Steel Service Centers allows the steel user to have huge inventories readily available while only paying for the steel they need, when they need it. This reduces or eliminates the need for end users to tie up capital in inventory, pre-processing equipment, processing personnel, and trucks.

Service Centers have been serving America's metal needs since early Colonial days when they were known as "Iron Mongers," and provided blacksmiths, wagon makers and other craftsmen with the products of English and Swedish mills. In the 1930's, only about a tenth of the nation's total steel production reached manufacturers and fabricators via Service Centers. Today, over 30% of all "industrial steel products" (products that are used in the manufacture of original equipment) and 45% of specialty steel produced in the U.S. pass through Service Centers. This trend is expected to continue as more manufacturers implement Material Requirements Planning (MRP) programs requiring just-in-time delivery of production-ready metal.

Service Centers handle millions of items each year and are the domestic steel industry's largest customer group. They serve as industry's working reservoir of materials and services. Approximately 300,000 firms buy a large portion of their metal requirements from service centers. In fact, every single metal user in the country deals with service centers at one time or another.

PDM Steel Service Centers Exist To Provide . . .