Abstract
This case study explores the operations and supply chain challenges faced by SteelCom, a New Zealand-based manufacturer of structural steel components for the construction industry. With approximately 250 employees, SteelCom produces mesh and structural steel products, recently expanding operations to include labour-intensive galvanizing processes. The company manages four main inventory types – raw materials, work in process, finished goods, and consignment stock – while operating largely in a make-to-order environment. Rapid growth and a new infrastructure client prompted a temporary 45% production increase to establish consignment inventory across multiple customer locations, straining storage capacity and increasing complexity in inventory management.
Sourcing strategies pose further operational challenges. SteelCom can choose between locally sourced materials with higher costs and reliable delivery, or cheaper Southeast Asian alternatives with longer, variable lead times. While Southeast Asian sourcing now offers attractive pricing, it also increases pressure on storage and logistics. Recent initiatives to improve traceability and inventory accuracy were necessary to meet certification requirements and support a planned enterprise resource planning (ERP) rollout. The case highlights the impact of sourcing decisions, production planning, and customer service commitments on inventory strategy, while raising questions about traceability, logistics, and technology integration in industrial operations.