Tight steel market strains supplier-customer relations: with prices going up, and lead times stretching out, supplier-customer relationships are being put to the test. In today's tight market, customers have placed a premium on dependability of supply and honest communication regarding availability and delivery.
Publication:
Metal Center News
Publication Date: 01-OCT-04 |
Format: Online
Delivery: Immediate Online Access |
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Full Article Title: Tight steel market strains supplier-customer relations: with prices going up, and lead times stretching out, supplier-customer relationships are being put to the test. In today's tight market, customers have placed a premium on dependability of supply and honest communication regarding availability and delivery.(Cover Story) |
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Article Excerpt
Over the past year, successful steel suppliers have distinguished themselves by helping customers deal with the demands of steel scarcity. Overall, however, satisfaction levels are down among mill customers--both end-users and service centers--particularly regarding price and delivery.
By definition, due to tire unprecedented market conditions, suppliers have been unable to satisfy the requirements of all customers. Most have focused on meeting the needs of their best customers first. The greatest levels of dissatisfaction have occurred in cases where suppliers have been slow to communicate their inability to deliver on their commitments.
The gap in service and delivery scores between the top and bottom competitors has widened, as the top suppliers have provided honest communication and solid results while others have been unable to deal with the stress of tight market conditions. In fact, this market stress has resulted in price and delivery satisfaction scores for certain suppliers dropping to record lows in the Jacobson survey (see Chart 2).
The steel market of the past year has created more disfavor for those suppliers who have not kept up with customer needs than kudos for those suppliers who have been able to contend with the stresses of market tightness.
Which mills have gotten the highest marks from their distributors? Overall, for the year ended Aug. 31, mills rated highest by service centers in four main product categories include: North Star Bluescope, Beta Steel, Roanoke Electric Steel, IPSCO Iowa, Nucor Hertford and Nucor Yamato Steel Co. (see Chart 1).
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