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In this article, you’ll uncover the motivations behind why several steel stakeholders have transitioned into metal service centers and delve into the strategies they’ve implemented to facilitate this shift. Additionally, you'll get the chance to view a segment from the seminar titled “Laser Cutting in Structural Solutions,†sponsored by BLM GROUP and the Steel Promotion Foundation. The presentation highlights SICAM S.p.A.’s success story using Lasertube technology.
Take a moment to watch SICAM S.p.A.’s insightful presentation.
What Drives Steel Stakeholders to Become Metal Service Centers?
Over recent years, the steel industry has experienced significant fluctuations in demand, even as production levels remained constant. This dynamic has pushed producers to use their leverage to exert more control over the distribution network. As a result, distributors, particularly those of medium size, found themselves caught between larger conglomerates that encompass steel production and smaller entities that remain competitive by operating locally and targeting niche markets.
To maintain their autonomy from manufacturing, distributors began focusing on adding value to their offerings. They started providing a spectrum of services ranging from design assistance to machining, delivering finished, ready-to-use products directly to the end customer. Consequently, numerous distribution groups dealing in tubes, sheet metal, and other steel products decided to enhance their machine fleets to boost profit margins and secure long-term opportunities.
How Can Distribution Companies Make This Transition?
Distribution firms have two primary strategic approaches:
1. Specialize deeply within specific market segments.
2. Broaden the range of services while maintaining a wide operational scope, allowing them to target desired segments after securing loyal customers.
One method to adopt the first strategy is by segmenting your customer database and meticulously analyzing historical orders. With this data, you can engage in meaningful conversations with clients to understand their requirements: do they want additional processing done on purchased materials? Are they capable of handling these tasks independently or reliant on external suppliers? Do they need guidance in design or production?
After mapping out the downstream supply chain comprehensively, you can determine the optimal strategy for future investments. It’s crucial to optimize spending capacity to prevent resource wastage and ensure thorough coverage of your targeted scope through acquiring necessary machinery, hiring new talent, or expanding service offerings.
When considering solutions for processing tubular products like tubes, beams, plates, angles, and various profiles, modern Lasertube systems stand out due to their adaptability, high automation levels, and productivity. These features make them a cost-effective option for transforming your distribution company into a service center.
Learn more about BLM GROUP’s Lasertube solutions.
Case Study: SICAM S.p.A.
Below, you can watch an excerpt from a presentation by Massimo Fasolo, Technical Department Manager of SICAM S.p.A.’s Laser Department, and Luca Prasso, Area Director at SICAM S.p.A., from the seminar hosted by BLM GROUP and the Steel Promotion Foundation titled “Laser Cutting in Structural Solutions.†During this talk, you’ll see how SICAM S.p.A. successfully evolved from a traditional distributor to a service center, thanks to the efficiency and versatility of BLM GROUP’s Lasertube systems.
As industries continue to evolve, embracing technological advancements like laser cutting not only ensures business sustainability but also opens up new avenues for growth. For companies like SICAM S.p.A., leveraging such innovations has been instrumental in achieving this pivotal transformation.