The Shape of Things to Come

We understand that any future success in the steel service center business is based upon the ability to provide value-added processing. That's why we have been saw-cutting and shearing, and oxy-fuel and plasma cutting carbon-based plates, sheet, shapes, hot-roll and cold-drawn bars, grating, pipe and tubing products for decades.

Founded in 1935 as Demana Iron, we purchased Benjamin Iron and Metal Company in 1969 and changed the name of the combined companies to Benjamin Steel a year later. We are headquartered in Springfield, OH, with branch locations in Dayton, Lima and Mansfield. We bring in approximately $80 million in annual sales with 220 employees, including 75 in Springfield where we operate a Mazak Optonics FabriGear 150 3D laser cutting system.

Our competitive edge lies in our unquestioned commitment to customer satisfaction. The 3D laser system is making customer satisfaction easier for us, and is also resulting in increased processing sales, increased material sales and the addition of informal customer design work.

Prior to the addition of the FabriGear in April of 2006, we simply saw-cut bars to length and delivered them to customers. Now, we literally can make parts. The advantage of this machine is that it can essentially replace various steps that require multiple machines and multiple logistics to produce a part. We are now able to handle that in one process.

When the machine first became operational, we saw approximately $5,000 in monthly processing revenue. That quickly jumped to $10,000, $20,000, then $25,000 in the first six months that we had the machine. Now, more than a year later, we regularly exceed $30,000 each month in processing revenue from the 3D laser cutting system, which operates on three shifts, around the clock, five days a week.

Approximately one year after installation, we decided to add a third operator to enable us to run production on the equipment on all three shifts. We were initially producing parts that amounted to about one truckload of steel per month. We now average three or more truckloads of finished parts per month.

The increased processing capabilities led to new customers, which increased our material sales as well. While 80 to 90 percent of the material run on the FabriGear 150 is from existing customers, 10 to 20 percent is new business. The ability to perform intricate processing also has led us to offer design assistance to our customers in order to make the best use of the 3D laser system. We've got to work hand-in-hand with customers to help them develop their designs and the design process. We saw this as an important opportunity early on, but we did not anticipate this concept would become a reality in our every day selling and marketing as it has.

As a result, our sales force is becoming more manufacturing-oriented and we are considering adding a sales engineer position. In the meantime, the sales force is planning to take advanced training to give it a better handle on the laser's capabilities as they relate to customer needs.

The FabriGear 150 is a multi-axis, automated rotary laser that can fabricate tube, pipe, and structural shapes with all the contours and bevels needed for tight fits on a wide variety of pipe joints and additional intersecting or adjoining pipes.

The system can handle up to 6 in round or square tube and pipe, thin or thick-walled, up to 26 ft long. It can completely process I and H-beams, C-channel, angle iron, and user-defined shapes.

To achieve these complex 3D shapes, the system's 64-bit CNC simultaneously controls a five-axis laser cutting system and four programmable rotary chucks. The tight dimensional accuracies that result from laser cutting can eliminate time and costs in such downstream operations as fitting, welding, and weld prep. Our processing services are value-added activities and something we've been focusing on as a whole in the last few years. They are extremely important to the success of our company.

Steel bars, structural shapes, tubing, and pipe – in addition to sheet and plate – are our core products. For this reason, the FabriGear fits in very much with what we value in terms of continuing to increase our processing sales.

Among the products that we process for customers are structural components for a tower that houses agricultural equipment, parts for jail cell doors, lift truck parts, crane parts, exhaust tubing, parts for manufacturing plant racking and storage systems, truck bed ramping and framing, and various heavy equipment and conveyor equipment. We are also able to do some prototype work and produce samples that are an investment in the future.

We bought the machine without having one customer that we knew for sure was going to order product from us. The little bit of analysis and soul searching we did led us to believe that this is the right direction for us to go, because it is very clear that our industry is doing more and more manufacturing-like activities. And it's very clear that value-added processes are going to continue to be vitally important to our future.

Lo and behold, it's turned out to be a very wise investment for us.

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Nick Demana is President of Benjamin Steel Company, Inc., 777 Benjamin Drive, Springfield, OH 45502, 937-322-8600, Fax: 937-324-1914, www.benjaminsteel.com.

Mazak Optonics Corporation, 140 E. State Parkway, Schaumburg IL 60173, 847-252-4500, Fax: 847-252-4599, www.mazakoptonics.com.