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Jacobson/metal center news customer satisfaction survey: price, delivery issues temper satisfaction: steel mills offer quality products, but have room for improvement in delivery and price.

Article Excerpt
MILL CUSTOMERS, including service centers and end-users, remain generally satisfied with the quality of the steel they receive. They are significantly less satisfied with the quality of the steel's delivery and price, however.

According to the latest data from Jacobson and Associates, which conducts a continuous census survey of steel mill customers, quality satisfaction and service satisfaction have remained relatively constant over the past five years, while price satisfaction and delivery satisfaction have shown more shifts from year to year.

Looking at the market by product segment, sheet mill customer satisfaction remained steady over the past year with higher quality and price satisfaction offset by lower service satisfaction and delivery satisfaction. Over time, however, sheet customers have been considerably more satisfied with quality and less satisfied with price and delivery. (See Chart A.)

Minimill customers have higher satisfaction levels than customers of both sheet and plate mills. Like plate and sheet customers, minimill customers are the most satisfied with product quality and the least satisfied with price. Indeed, price satisfaction tends to rank the lowest of all major attributes. Although quality satisfaction has been on an upward trend since 2002, all other major attributes have been on a downward trend since 2002. (See Chart B.)

Plate customer satisfaction rates more closely resemble the satisfaction rates of sheet customers. In 2002, satisfaction rates for plate and sheet customers were very similar. However, overall satisfaction for plate customers is moving upward while overall sheet customer satisfaction has been stagnant. Quality satisfaction and service satisfaction have driven the upward trend in plate customer satisfaction. (See Chart C.)

Top suppliers for the 12 months ending Aug. 31, 2006, among all customers were: Beta Steel in the sheet category, IPSCO Iowa in the plate category, SDI Roanoke Bar in the minimill category, Hanna Steel in the tube category, Nucor Berkeley in the beam category and AK Steel in the stainless category.

Where is improvement most needed?

Where do steel suppliers need the most improvement? Year in and year out, respondents to the Jacobson Survey consistently report significant dissatisfaction with steel mill prices and delivery performance. In the three months ending Aug. 31, 2006, about 30 percent of mill customers cite price and delivery as areas where mills could improve. (See Chart D.)

Dissatisfaction with price tends to correlate with strong markets, though some customers look for suppliers to improve price regardless of market conditions.

Concerns about inventory availability have seesawed up and down over the past five years as the steel market has ebbed and flowed. In contrast, concerns with quality have demonstrated...

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