QMSC Case Study Report March2013
Background
Quality Metal Service Center (QMSC) is a century old national distributor of metals with annual sales in 1991 of over $750 million. The company is in the middle of the value chain, purchasing metals in large lots from production mills and reselling the product to metal users in smaller lots on a short lead time basis. QMSC also sells inventory that has been altered through preproduction processing. To be competitive QMSC must have a shorter lead time and better customer service to cover its costs and to make its products an attractive investment for customers.
QMSC operates in over 20 locations in the United States, situated in markets representing about 75 percent of the national metal consumption. The firm is separated into 4 regions - Western, Eastern, Midwestern and Southern. Each region is divided into about 6 districts, for a total of 23 districts. Districts operate unilaterally, acquiring inventory from their regional warehouse, other districts or outside companies and supplying products and technical support to the end user. Alteration services are offered on a district-by-district basis, depending on processing capabilities.
Assessment Factors
QMSC is considered diversified/ related. The firm operates exclusively in the metal industry but also offers a wide range of specialized processing services. QMSC offers a diversified product line targeted at high-technology metal users. The company is committed "to continue to diversify into complementary higher technology products as new customer requirements arise.”
QMSC exhibits a “build” business unit strategy. To compete more effectively in the "mature, highly competitive, and fragmented" metal distribution industry, QMSC reduced its participation in the broader commodity carbon steel markets and "redeployed its resources into higher technology metals". QMSC 's introduction of titanium to the distributor market separated the company from its competitors and demonstrated QMCS's commitment to
Quality Metal Service Center (QMSC) is a century old national distributor of metals with annual sales in 1991 of over $750 million. The company is in the middle of the value chain, purchasing metals in large lots from production mills and reselling the product to metal users in smaller lots on a short lead time basis. QMSC also sells inventory that has been altered through preproduction processing. To be competitive QMSC must have a shorter lead time and better customer service to cover its costs and to make its products an attractive investment for customers.
QMSC operates in over 20 locations in the United States, situated in markets representing about 75 percent of the national metal consumption. The firm is separated into 4 regions - Western, Eastern, Midwestern and Southern. Each region is divided into about 6 districts, for a total of 23 districts. Districts operate unilaterally, acquiring inventory from their regional warehouse, other districts or outside companies and supplying products and technical support to the end user. Alteration services are offered on a district-by-district basis, depending on processing capabilities.
Assessment Factors
QMSC is considered diversified/ related. The firm operates exclusively in the metal industry but also offers a wide range of specialized processing services. QMSC offers a diversified product line targeted at high-technology metal users. The company is committed "to continue to diversify into complementary higher technology products as new customer requirements arise.”
QMSC exhibits a “build” business unit strategy. To compete more effectively in the "mature, highly competitive, and fragmented" metal distribution industry, QMSC reduced its participation in the broader commodity carbon steel markets and "redeployed its resources into higher technology metals". QMSC 's introduction of titanium to the distributor market separated the company from its competitors and demonstrated QMCS's commitment to