Missing the roll date puts your W24s on a premium buy
You won the package in March, shop drawings cleared in June, and the mill had already rolled that section. Now the W24s come off a service center floor at a spread you never bid.
No other package on that job has a supplier who only makes the product on certain weeks. Your bolts, your grating, and your deck are available next week; a W24x131 in A992 exists when the rolling schedule says it exists, and whether you hit that window is decided at a review desk you don't manage. That's why the approval clock belongs on your purchasing calendar with the mill's roll dates written beside it.
The size of it
Service center stock runs roughly 20 to 30 percent over mill base on the affected sections. When mill steel is a third of contract value on the package, one late purchase order takes several points of gross margin off a job with no change order behind it.
Mills roll each W-section on a published cycle, commonly every four to eight weeks, and heavy or jumbo sections and specialty grades like A913 or A588 weathering come around less often than that. You can't place the mill order until shop drawings come back approved, so a two week review that turns into five weeks pushes your purchase order past the roll date without anyone on your side making a mistake. The only place left to buy is service center stock, priced above mill base. That decision gets made inside a reviewer's inbox and it ends up in your material cost. Most fabricators find out at buyout, weeks after the date passed, when the number is already permanent.
Three moves, in order
Step 06: Project management
Billing dates, change orders, and notices, written as standards that work without anyone chasing them.
What else costs structural steel contractors money
The same mechanism in other trades
What structural steel owners ask
Why is service center steel more expensive than mill steel?
You won the package in March, shop drawings cleared in June, and the mill had already rolled that section. Now the W24s come off a service center floor at a spread you never bid.
What does it cost?
Service center stock runs roughly 20 to 30 percent over mill base on the affected sections. When mill steel is a third of contract value on the package, one late purchase order takes several points of gross margin off a job with no change order behind it.
What do I do first?
Pull the mill's rolling schedule for every section in the package before you sign, and write the next two roll dates for the heavy sections on the job's buyout calendar.
What are structural steel contractors supposed to be making?
Structural steel runs 23% gross margin, 15% overhead and 8% net profit before taxes at $1M–$5M. The all-trade average is 7%, so this trade is 1 point above it. The CFOS target is 11.5%.
Which part of the system fixes it?
The step is number 06, project management. Billing dates, change orders, and notices, written as standards that work without anyone chasing them. It comes from chapter 6 of CONTROL: The Construction Financial Operating System.
Everything on this page is something you can install yourself, andCONTROL is the order to do it in. If you would rather buy the finished result, SPM The Construction CFO does this work for structural steel contractors as a service. It is a separate firm, Sulphur Prairie Management, LLC, run by the same author.
Wrote CONTROL, the 8 step system behind these figures. More about the author.