May 2007- What’s in a name? According to Shakespeare, not much. He says a rose by any other name would still smell just as sweet. When Modern Metals first spoke with Scott Kelley, Randolph Weis and Chip Dollins, founders of Service Center Metals, Prince George, Va., in 2003, they weren’t buying it. Since then, things haven’t changed.
The chosen moniker for their aluminum extruding business still means much more than just a designation or a title. To this day, it serves as a constant reminder as to what the three founders set out to achieve when they first opened their doors more than four years ago. Their mission statement says it all. "Service Center Metals will dedicate 100 percent of our resources to support our service center customers. We will set the benchmark for safety, customer service, product quality and operational efficiency as a supplier to the service center industry."
"The reason we named our company Service Center Metals was because we knew that people would question whether we would stay true to that strategy and whether we would be tempted to move outside of the strategy if it didn’t work out for us when we first came out of the gate," says Kelley, president and CEO. "So we decided to name our company after our customers in order to give them the comfort that we were going to stick to that game plan. We’ve remained true to our original business model; our mission statement hasn’t changed in 4-1/2 years."
In order to cater to its 20-plus service center customers located throughout the United States and in Canada, the company produces rod and bar products in standard and custom shapes, as well as tube and pipe. Offerings range from 1/2 pound per foot to 58 pounds per foot from lightweight shapes to heavyweight shapes. Currently Service Center Metals produces over 1,000 different profiles.
While the company focuses the lion’s share of its energy on distribution-type customers, the service centers aren’t the only ones profiting from Service Center Metals’ original philosophy. End users can reap the benefits, as well. "The service centers are closer to the customer in the purchase sense and closer to the customer geographically," says Kelley. "They know the customer’s specific needs better than we do."
No matter the temptation, the company hasn’t swayed in the face of the value-add trend sweeping through American mills wanting to diversify their product base. "We try to keep things simple around here," Kelley explains. "We feel that the industry has become overly complicated in some respects. We strongly believe that our approach is the most efficient way to go to the marketplace--let the mills do what they do best and let the service centers do what they do best."
For many in the industry, supplying value-add services has facilitated growth. With Service Center Metals’ straightforward approach to the strict production of raw material, the company hasn’t had any trouble in the growth department. In the past year, sales have increased by an astounding 150 percent, attracting attention from Entrepreneur magazine and Price Waterhouse Coopers.
Growth hasn’t only come in terms of revenue, however. Service Center Metals has grown in a physical sense, as well. Last year the addition of Elvis, a state-of-the-art 5,500-ton press, expanded the company’s capabilities substantially. The press made the 0.500-pound-to-58-pound-per-foot range on extruded parts possible and assisted in producing large-diameter 6061-T6511 rod and bar products.
Things would have been much different if the company had had any desire to sell beyond the service center market. If it weren’t for Service Center Metals’ resolve, Elvis might never have found a home with the company. "One of the noticeable differences, if we didn’t have this service center focus, would have begun with the very way that we designed the plant and the flow of the product," says Kelley. "The facility would be different in terms of the equipment that we purchased, the capabilities of that equipment and even the employees that we hired."
The basic principle of trust
Service Center Metals’ staunch devotion to its distributor customers makes a concrete statement. The company’s commitment has fortified long-term relationships and in turn has driven its success. The founders, however, aren’t opposed to sharing the limelight. "The entire extrusion market is about 4.5 billion pounds," Kelley says. "Service centers participate in 16 percent of that 4.5 billion pounds. What we’re trying to do is assist them in increasing that percentage of participation. We think that that’s good for their industry, and what’s good for them is good for us."
Service Center Metals aims to share the wealth, and service centers would be wise to pay attention. This type of partnership, put in place to boost the business of all involved, can act as a refreshing model for those used to cutthroat competition.
"Even though [service centers] participate in only 16 percent of the total 4.5-billion-pound extrusion market, they service 40 percent of the 800-million-pound aluminum rod and bar market," Kelley explains. "They are very significant with these products in particular."
To target the bar and rod needs of its service center customers, the company developed Thunder Bar, a rectangular and square bar product, and Lightning Rod, a round product. They have "better straightness, dimensional control, mechanical properties and appearance, which results in better performance in the end," says Kelley. Because these products will be machined before making their way to the end users, quality and consistency are paramount.
No matter what the product or how it’s processed, service centers can count on a relationship that’s established with trust.
"When an end user calls to ask me for assistance, the service center doesn’t have to worry that I’m trying to sell to the customer directly," says Bob Remage, Ph.D., director of quality and technical services. "It’s fairly open that I can help a customer while keeping the service center in the loop. With some of our competitors that service both the service center and the OEM, the service center has to wonder a little bit as to whether the mill is trying to sell to the customer directly for the long term. Everything we have goes through the service centers."
From day one, Service Center Metals held a commitment to one type of customer and one type of customer only. Until the company changes its name or its core philosophy, which it has no intention of doing, distributors can rest assured that they are and will continue to be the sole recipient of the company’s dedication to quality and customer service.
"We have a long-term objective," says Kelley. "If everything we do isn’t in some way improving service, improving quality or reducing our cost, then we’re wasting our time. Our goal is to stay focused on that model, being the best that we can be." MM
By Abbe Miller, from the May 2007 issue of Modern Metals.