Halloran Metals

Halloran Metals is a regional company located in the northeast U.S., with almost $170 million on sales and $6 million on operating profit, the company has acquired in the last 36 years seven warehouses used to serve more than 10,000 customers located in New England, New York, and Pennsylvania, each warehouse specialized in a certain group of products. These facilities have opportunities to bid on bulk-order business; however, small transfers are made by shuttles daily between them to satisfied customer demands. These customers are divided by three categories, the ones that their purchases are more than $80,000, and the other ones that are between $20,000 and $80,000, and the small customers that placed orders with less than $10,000. Approximately 40% of total revenues are represented by small customers. To maintain its promise of high service levels, the company offers overnight delivery and rarely turning down an order, no matter the size of the order. The company operates its own fleet truck where no more than two hours are driven from the warehouse to the customer. Also Halloran does not charge for special customers' requirements needed to modify the product. The 30% of company trucking is for transfers made by warehouses.

Halloran has been trying to dominate the market by offering almost all steel categories of products. These products are bought from integrated mills that delivery large tons of steel in full truck loads to minimize the transportation cost. These purchases are handled centralized in Lynn facility and decentralized, where each warehouse manager has the authority to decide the amount of steel needed to accomplish their customer requirements. The history of Halloran branches revels that any warehouse becomes profitable after 3 years of market operations, meanwhile before this time the facility is replenished by the nearest branch.

In the other hand Halloran has a big competitor named Allied who has revenues of $180 million by selling 40% product categories less in the same region. Allied managed 3,000 customers and it focus in large-volume customers as well as full truckload quantities. In the last two years the company has invested more than $20 million in equipment to process the steel. Allied owns just one warehouse located near Lynn warehouse, but the difference is that Allied facility is six times larger than Halloran warehouses. Allied also operates its own fleet, but instead of delivering the product overnight, they have a 3 to 5 delivery time since the order is generated.

During the last decades steel industry had experienced a steady growth, but the recession of 2001 affected it and Halloran's sales declined 70%.

Different strategies can be applied in the long, short- term to decrease expanses and increase sales, but the recommendations that this team is provides