The Role of Steel Service Centers in Supplying Fabricated Parts to OEMs

Steel Service Centers sell steel regularly to original equipment manufacturers (OEMs), companies that manufacture their own products, companies like John Deere, J.I. Case, and Caterpillar to name just three large OEMs.  Of course, OEMs also buy material directly from steel mills when the OEMs buy truckloads of a given steel section.

OEMs increasingly want to reduce the number of their suppliers to simplify the supply chain.  One way they do this is to buy not only the steel from steel service centers but also processing.  Service centers typically do what they call first stage processing, e.g. cutting, shearing, and burning of plate.  A select few service centers go a step beyond and subcontract steel processing to fabricators and subcontractors to add still more value to the raw steel.  And a subset of these subcontractors includes companies that specialize in curving steel, sometimes called “Bender/Rollers.”

So, a Bender/Roller might supply curved or bent steel tubing to become the arms to hold a bucket on a J.I. Case front-end loader, or plate rolled into a cylinder to cover the springs on a Caterpillar tractor.  Selling through a service center proides an opportunity for a Bender/Roller to provide small quantities of rolled steel sections to an OEM.  Normally, the OEM would not want to add a small supplier; it wants only a few large suppliers.  Yet combining the value that is added by the steel service center and the Bender/Roller often yields great productivity gains when a semi-fabricated part can be shipped directly to an OEM’s manufacturing cells.

It is usually the case that the service center arranges for the dropping off of the raw material to be curved and then picks it up to deliver to the OEM, often along with unprocessed material the service center is selling to the OEM.  The service center also typically coordinates the work of each stage of the supply chain to make sure all runs smoothly.

Curved OEM Parts Sold and Shipped Through a Service Center


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