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Strategic moves

Service center’s relocation improves performance, expands market

MM 0322 face leadMarch 2022 - In May 2020, Alliance Steel moved its headquarters to Gary, Indiana, which placed the company near significant highways, mills and ports and, as a result, helped accelerate its growth. Andrew Gross, president and CEO, talks with Modern Metals about market positioning amid challenges.

Q: How does Alliance Steel’s expansion of services help the company address market challenges and customer needs?

Gross: In Bedford Park, we were operating three buildings. When we moved to Northwest Indiana, our footprint expanded by more than 100,000 square feet, allowing us to store considerably more material for our customers. In addition, the ability to have all our equipment in one location allows us to be much more efficient, provide better processing and decrease lead times.

We can unload trucks in four to six minutes in our complete drive-through bays, and we’re continuing to add more fabrication capabilities. All of our equipment is brand new. We just added a 10-kW laser and an 84-inch-wide slitting line, in addition to our 6-kW lasers, 24-inch-wide slitting line and press brakes.

We have so much demand now because of our proximity to the major mills. We have picked up more than 200 new accounts in the last 18 months.

Q: What are some of the biggest challenges you’re seeing?

A: Staying in line with the market and managing our risk because the price of steel currently is so accelerated. It’s a massive challenge for all service centers. The ability to hire capable and willing employees is also challenging. The labor market after COVID is so much different than it was in 2019 and early 2020.

Q: Have you turned to automation to fill some of the gaps in skilled labor?

A: We use a warehouse management system that is directly integrated with our crane system and helps locate coils. It can locate the coil within 5 centimeters of its ID (inner diameter) and travels over 300 feet per minute to get there. It eliminated having our people on the ground looking for steel. We have also installed automated equipment in our fabrication department that can run lights out without anybody on the shift.

We have looked at the possibility of automating packaging and material handling. We have automatic banders, feed systems and pickers, but when it comes to putting the coil on the skid, it works better for us if it’s semi-automated.

Q: What are the keys to winning new business in an unpredictable market?

A: One key is to show the customer the path to solving their price risk through a creative steel supply solution and providing consistent deliveries. Transparency and communication are still the foundation of a strong service center-customer relationship. We also have a big digital presence that we’ve found to be extremely helpful.

We’ve retained all our old customers after the move because we’ve improved our performance. We are extremely quality conscious. It’s got to be done well, correctly and on time. That’s what has helped us navigate this market.

Q: Do you see today’s challenges continuing for some time into the future?

A: Overall, I think 2022 is going to be a very good year. There’s so much pent-up demand on the market side. I don’t think there are going to be any revelations; however, I think the labor side of things will begin to ease a bit now that COVID is more manageable. Higher pricing is here to stay. It won’t reach extreme heights, but it will be sustainably much higher than it’s ever been. MM

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