Big River Steel says front-and-center on its website that it’s actually a technology company that happens to make steel. As one of the forerunners on Felux, Big River Steel proves this to be true once again as the company embarks in a partnership with Felux to post future production online.
Established in 2014, Big River Steel is based in an area of northeast Arkansas that has been called “steel mill heaven.” The company offers a wide range of products including galvanized, cold- and hot-rolled products, electrical steel, and advanced high strength steel. Big Steel is the creator of the world’s first Flex Mill®, which merges the wide product mix and superior grade capabilities of an integrated mill with the nimbleness and technological advancements of a mini mill.
Predicting future production is always a challenge for any steel company. At Big River Steel, the process for planning production for the following year begins in the fall. In around September 2019, the company began thinking about 2020 production.
“We thought 2020 would be an okay year so we set a goal of having 75% of our production locked up in volume-based contracts,” said Kasandra Lutzko, General Manager, Sales & Administration at Big River Steel. Once the COVID-19 pandemic hit, the company had to quickly pivot. “It ended up not working that well because the majority of our contracts were in oil and gas.”
Typically, Big River Steel begins by planning the product with the longest lead time first, in its case, galvanized products. “Let’s say we have 40,000 tons of galvanized planned, but we only have a demand for 35,000 tons,” Lutzko explained. “At that point, we’d shift production of the remaining 5,000 tons into cobalt, and so forth, until we can reach capacity. Contract orders are known while spot orders are not.” The mix depends completely on the market.
Big River Steel turned to Felux to list that extra capacity and potential future production on its innovative platform in an effort to generate growth, secure new customers, and shorten lead times.
Big River Steel has started posting products on Felux, finding the platform a good way to expand its customer base.
“We’ve heard of most of the companies buying on Felux, but for one reason or another, we haven’t sold to them,” Lutzko said. “Felux gives us opportunity to start that relationship with them.” The company has secured sales with some new customers and started conversations and negotiations with others.
Moving forward, Big River Steel is working with Felux on establishing the best way to post future production online. Ideas have ranged from listing high-demand products or ones that the company wanted to move quickly to listing capacity only with availability dates. “We want potential customers to see our continuity of offerings,” Lutzko said. “By listing future production runs, we want them to be confident that they can rely on us.”
The initiative is a high priority for Big River Steel moving forward, and the company will be dedicating two full-time positions to growing its opportunities through Felux.
“We want to expand how we’re using Felux,” Lutzko said. “We have several inside sales people at the top of their game, but they are not quite ready to be outside regional managers. As a result, we are in the process of promoting them, and one of their new responsibilities will be for them to lead and manage our initiatives on Felux. We run very lean here; we essentially have four outside sales staff that sells 1.6 million tons of steel each year. We want to expand Felux and give it the attention it deserves. I really think the partnership with be good for both of us.”