March 2007- It’s hard not to notice when a new family moves into the neighborhood. As movers carry box after box to and from the moving van, curiosity levels are piqued. Nosy neighbors can’t help but size up the new addition to the block, and in the time it takes to unload a U-Haul, speculations are at a steady boil.
In 2003, when the folks at Steel Dynamics Inc. first rolled down Jeff Gordon Boulevard, en route to the company’s new Pittsboro, Ind., facility, they didn’t necessarily see eyes peering from behind drawn curtains, but they did feel a certain sense of scrutiny. As the newest producer of SBQ bar on the scene, the employees at Steel Dynamics’ Engineered Bar Products Division knew they were causing heads to turn.
The newly created division, however, tried to make itself at home at the then-defunct Qualitech Steel Corp. facility that Steel Dynamics had purchased for $45 million. But this new abode needed a little bit more than a fresh coat of paint. Another $90 million later in capital investments and the mill was up and running. Shortly thereafter in January of 2004, the first commercial orders of hot-rolled, as-rolled bar were shipped out. At this point though, the company was just getting settled in.
Glenn Pushis, vice president and general manager of the engineered bar products division, says that when the company first kicked off the brownfield project, the plan was to send the mill products out for additional processing. It didn’t take long to change that way of thinking, however. “The material was going north to the Chicagoland and Detroit areas for value-added services, to get straightened, heat treated and inspected and then it would come right back on a truck, literally passing by our gate and continuing south where it would be finished into its final format,” Pushis says. “It just didn’t make a lot of sense from a transportation standpoint.”
So with ample land directly adjacent to the revamped mill and a general desire to streamline its supply chain management, Steel Dynamics took its customers’ suggestions to heart and decided to handle the specialized processing in-house.
Home is where the bar is
Renovations take time so the company got started right away. Steel Dynamics not only planned to build a brand-new 150,000-square-foot facility but also had to secure a fair amount of capital equipment--some items had lead-times of up to one year. By the middle of 2006, the four-bay structure was complete and in full swing.
Because the company was so new to both SBQ bar products and the value-add market, Pushis says that customer tours became a typical happening at the Pittsboro campus. "People are coming through the plant just to see what we’re all about because we’re so new to SBQ and there really hasn’t been a new SBQ player for 20 or 30 years," he says. "Some of these people have never seen a new guy on the block."
So after touring the 700,000-square-foot mill, which has an annual melting and casting capacity of 650,000 tons, visitors are led to the new bar-finishing facility next door. Here both potential and existing customers get a glimpse into Steel Dynamics’ newest endeavor. Tours start off at the first bay, the small-bar inspection bay. Bars from 1 inch to 5 inches in diameter and anywhere from 15 feet to 45 feet in length are perfectly straightened in order to go through a series of detection equipment. The product’s surface and center are inspected, the ends are chamfered and, finally, the specified grade is verified for shipment.
As the tour continues, Pushis explains that the second bay is devoted primarily to the bar turning line that machines the outsides of 1-inch to 4-inch bars. The lathe-like equipment creates smooth, shiny finishes, and similar to the first bay, these bars are also chamfered, inspected and grade verified.
All of the SBQ material handled at the finishing facility is what Pushis describes as "steel put into motion." He says, "The bars that we’re making will eventually be put into parts like crankshafts, camshafts, connecting rods in an engine or even possibly axels--things that have to move. It’s not like an I-beam that’s holding up a bridge or a sheet of steel that gets stamped into a fender or into a hood." The quality standards are high; a lack of porosity in the center of the bars is critical.
The SBQ required for these "wear items" comes in a variety of different shapes, sizes and grades, and Steel Dynamics seems to produce just about anything that an end user could dream up. As far length is concerned, the SBQ bars are cut in the third bay by one of the two Nishijimax rotary saws in increments ranging from 1/2-inch wafers all the way up to 120-inch long product. Tolerances on the Nishijimax stay as tight as ±0.002 of an inch. For cutting wide-diameter product up to 25 inches around, the company’s Hem high-speed double-column band saw line steps in.
The final leg of the tour wraps up at the fourth bay, the heat-treating bay. "Here we have five car-bottom furnaces that can handle bars from 2 inches all the way to 12-1/2 inches in diameter," Pushis says. "We can do just about any kind of heat treating that a customer needs. We can do quench and temper, annealing, cold shearing, normalizing and stress relieving. But that’s not all. I could go on and on."
Making a house a home
The breadth of grades, lengths and surface finishes available causes Steel Dynamics’ offerings to be somewhat custom. Pushis stresses, however, that the company’s role is not that of a service center. "There are so many combinations that darn near every order is custom," he says. "But again, we’ve got to be careful because we don’t want to compete with the service centers market. We don’t do anything less than truckload quantities. We don’t do 10,000 or 5,000 pounds; we respectfully direct those customers to our service center friends. For some of the more exotic custom grades, we require a 100-ton heat lot minimum."
Steel Dynamics’ customers, which include OEMs, cold finishers, distributors, forgers, seamless tube manufacturers and semi-finishers, are accustomed to buying in bulk and are all pleased with the savings that come from the company’s in-house services. The savings from eliminating transportation costs and time lost waiting for product to go from one finisher to another are obvious benefits. For anyone who might balk at the idea, Pushis says the single-invoice factor drives home the idea of one-stop shopping.
"The process of adding value in-house minimizes the supply chain and streamlines any quality issues that may arise," says Pushis. "If there’s a problem, people point fingers and it can become a nightmare. Not only is it a single invoice, which is easier for your purchasing department, but it’s single-source responsibility. In the event that you have a problem with any of the material, there’s only one person to call."
Whether the end user is producing parts for the automotive or the aerospace industry or whether the final product requires high tolerances or a commodity-type item, Steel Dynamics recognizes the scope of the SBQ customer. And with that realization, the company also understands what it’s up against.
"It’s hard to break into SBQ and gain market share because our competition has a lot of it locked up," Pushis says. "There has to be a reason for a customer to change its supplier. You obviously don’t just change crankshafts in a car on a whim. Everybody has their system in place, where they know they’re getting a quality product. Unless you’re going to offer them better quality price, service, delivery or performance, there’s really not much opportunity." Ask Pushis what he thinks is the driving force behind the new division’s success and he points to customer relationships. "I believe that Steel Dynamics is a more customer-oriented company," he says. "Proof of that is this bar-finishing facility. It was our customers who spoke up about it and because of them, we went ahead and made a pretty sizable capital investment to go ahead and do it. This business of SBQ is important to us and it’s important to our customers. They’re engineered products; it’s engineered steel. It’s not run of the mill kind of stuff." With its facility in full swing, it’s time for Steel Dynamics to shake out the welcome mat. The new kid’s here to stay.MM
From the March 2007 issue of Modern Metals.
