By: thyssenkrupp Materials NA Canada

Case Study Summary

Problem
A U.S.-based bar and tube cutting service shop specializing in power distribution components was facing increasing pressure to reduce costs while maintaining quality and precision. The use of stainless steel rounds led to long machining times, excessive material waste, and higher labor costs, making it difficult to remain competitive.

Solution
thyssenkrupp Materials NA partnered with the customer to implement a targeted material optimization and supply chain strategy. By transitioning from stainless steel rounds to hexagonal stock and introducing a tailored Service Level Agreement with just-in-time delivery, the customer reduced machining time, minimized waste, improved reliability, and strengthened their competitive position.

Introduction: Meeting Rising Demand with Precision Components

Located in the United States, this customer is a bar and tube cutting service shop providing machining and customized cutting solutions across multiple industries, with a strong focus on power distribution components. Known for flexibility and efficiency, the company built its reputation as a reliable one-stop shop for its customers.

As demand in the power distribution market continued to grow and evolve, the customer needed to reduce costs and eliminate inefficiencies without compromising quality, precision, or delivery performance.

The Challenge: Reducing Costs Without Sacrificing Quality

Operating in a highly competitive manufacturing environment, the customer faced constant pricing pressure as multiple distributors quoted the same component transactionally. To remain competitive, they needed to optimize their production process while maintaining the precision and performance required for critical power distribution applications.

Inefficiencies in Material Selection

The customer originally machined components from stainless steel rounds, which met all technical specifications. However, converting round stock into the final component geometry required extensive machining, resulting in longer cycle times, increased tool wear, and higher labor costs.

Over time, these inefficiencies reduced throughput and began to impact overall profitability.

Material Waste and Processing Costs

In addition to extended machining time, stainless steel rounds generated significant material waste. Large amounts of excess material were removed during processing, increasing raw material costs and disposal expenses. This waste reduced yield and limited the customer’s ability to maintain competitive pricing.

Rising Market Pressures

As customer expectations and industry standards continued to rise, the company faced growing pressure to deliver the same high-quality components at a lower cost. It became clear that a more efficient material and machining strategy was required to reduce waste, improve processing speed, and preserve product integrity.

The Solution: Material Optimization and Supply Chain Integration

Recognizing the customer’s challenges, thyssenkrupp Materials NA partnered with them to develop a customized strategy addressing both production inefficiencies and supply chain complexity. Through material optimization, structured service agreements, and just-in-time delivery, the partnership delivered measurable improvements in efficiency, cost control, and reliability.

Transitioning to Hexagonal Stock

Leveraging materials expertise and supply chain resources, thyssenkrupp recommended switching from stainless steel rounds to hexagonal stock. Because hexagonal material is closer to the final net shape, significantly less machining was required to achieve the finished dimensions.

This change reduced cycle times, minimized tool wear, and sharply decreased material waste, resulting in lower material costs, faster turnaround, and more consistent finished components.

Supply Chain Reliability Through a Tailored Service Level Agreement

To support long-term reliability, thyssenkrupp Materials NA implemented a customized Service Level Agreement defining measurable performance standards. The agreement included guaranteed delivery windows, minimum stock availability thresholds, and quality assurance checks on outgoing material.

The SLA also allowed flexibility to adjust order volumes as demand changed, improving supply chain visibility and enabling more accurate production planning.

Increased Agility with Just-in-Time Delivery

To further streamline operations, a just-in-time delivery model was introduced to align material deliveries with the customer’s production schedule. Materials were delivered within 24 to 72 hours of request, reducing on-site inventory and lowering warehousing costs.

By purchasing material closer to the point of use, the customer improved cash flow and gained the agility needed to respond quickly to changing demand in the power distribution market.

The Impact: Lower Costs, Greater Efficiency, and Stronger Performance

The combination of material optimization, SLA implementation, and just-in-time delivery produced transformative results across the customer’s production process and supply chain.

• Reduced machining time through the use of hexagonal stock closer to net shape
• Decreased material waste and disposal costs, improving overall material utilization
• Lowered production expenses by minimizing labor hours and tool wear
• Improved lead times and on-time delivery performance
• Enhanced supply chain reliability through a structured Service Level Agreement
• Reduced inventory and overhead costs with a just-in-time delivery model
• Increased operational agility, enabling faster response to changing customer demand
• Strengthened competitive advantage through consistent quality and cost efficiency

Together, these improvements enabled the customer to maintain competitive pricing, strengthen supply chain stability, and deliver high-quality components with greater speed and confidence.

Facing Similar Challenges? Let’s Find the Right Solution Together.

At thyssenkrupp Materials NA Canada, we do more than supply materials. We partner with customers to build stronger, more efficient, and more resilient supply chains through tailored material strategies and value-added services.

From material optimization and inventory programs to precision processing and reliable delivery, our team delivers practical solutions designed to improve performance and reduce cost.

Have a challenge? We have a solution. Contact us today to learn how our materials expertise and supply chain support can help you achieve your goals.