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Gordon Poison*, Director General of NASS, sets out the contribution that steel stockholders make to the steel industry and how this has changed over the past few decades.
He warns that e-commerce must not be mistaken for a distribution channel, but as a way of advertising limited quantities of stocks, surplus to that already committed to a customer.
Stockholders (which include distributors and service centres) play a vital role in the supply of steel to the UK market.
In 1999, the total UK market demand for steel was some 13.2Mt. Stockholders are not recognised as distributors of all products but in 1999 they delivered some 7.1Mt, which accounts for over 54% of all steel market products. It is estimated that stockholders distribute some 70% of recognised stockholder products.
The past 30 years has seen a remarkable expansion in sales via stockholders, during which their share of the market has gone from 31% to some 70% in the stockholder products. The traditional role for stockholders has been one of buying in large quantities, de-bundling and distributing in smaller quantities. Today, stockholders have increased their investment in facilities for de-coiling, slitting, cutting to length and blanking of flat products, and cutting, sawing, drilling and painting long products. This fostered the establishment of service centres and in the 1980s, the growth in demand from steel users for just-in-time (JIT) service and cost pressures from manufacturers to reduce their investment in processing and stocks, increased the role and importance of the steel stockholder.
The total steel service distribution industry has a turnover of about £3bn and employs directly around 18000 staff. A recent report"» prepared for NASS by Robson Rhodes gave, for the first time, authoritative independent data on the steel stockholding sector, and also showed that about 60% of sales were handled by independent service centres and 40% by steel mill owned companies.
It is important to recognise the distinction that even if consumption of steel is not growing on the same scale, the increasing market share for steel stockholders is in such mature markets still increasing.
SUPPLY CHAIN RELATIONSHIPS
Growth of stockholding is a vital element in the development of supply chain management to many industrial and manufacturing sectors. Large customers, for example in the automotive...