Reference no: EM131777694

Years ago, metals were distributed mostly by small companies. They typically processed and shipped small quantities to small metalworking shops. Today metal service centers play a key role in the supply chain. They stamp, cut, and otherwise transform plate steel, coiled metals, bars, and other semifinished metal products into other forms that metalworking companies can use in further processing or assembly.

These days, few so-called metal distributors simply warehouse metal. As manufacturers continue to curtail in-house production and administrative functions, the service centers are evolving from simple distributors to complex providers of processing and information technologies. In many ways, this evolution reflects the trend toward out-sourcing: As producers concentrate on making metal, and steel customers concentrate on making their own products, each side is willing to outsource more tasks to the metal service providers.

As we note the changing service standards in the field – metals with greater strength, more complex shapes, and other attributes; JIT deliveries; and materials management services – it's important for manufacturers, top service centers (such as Reyerson Tull, Thyssen, and Russel Metal), and customers in construction, automotive, machinery, and other fields to anticipate the needs for the future.

Based on globalization trends, technological advances, and economic policy, what are some of the key avenues for growth we might see in metal distribution in the next five years? Expand, explain and justify your responses.