SDI's Mark Millett Explains That Making Money in the Steel Industry Is Not a Mystery
05/07/2014 - Mark Millett, president and CEO of Steel Dynamics Inc., had two great honors bestowed upon him at AISTech 2104 in Indianapolis, Ind.: He was named 2014 Steelmaker of the Year, and he also received the 2014 William Hogan Memorial Lecture Award.
The Steelmaker of the Year Award was established in 1991 to recognize contributions of a prominent individual to the steel industry. The Award reads: “Recognized as a visionary, people-oriented leader whose entrepreneurial spirit and relentless work ethic have fostered significant technical, economic and cultural advances in the steel industry. His pioneering leadership style combined with his technological problem-solving approach have led to the achievement of evolutionary milestones in manufacturing—most notably in the fields of alternative iron production, thin-slab casting and as a co-founder of Steel Dynamics Inc.”
As he received the award, Millett commented, “It is both gratifying and humbling to receive such an award when it is as the discretion of one’s peers.”
The second honor for Millett was the William Hogan Memorial Lecture Award, which was established in 1990 in memory of the late Rev. William Hogan, director of Fordham University’s Industrial Economics Research Institute. The recipient of the award shares Mr. Hogan’s views of the importance of steel and is selected in recognition of individual outstanding leadership to the iron and steel industry.
Millett’s honorary lecture was entitled “Making Money in the Steel Industry Is Not a Mystery.”
Millett explained that, although it is not easy to make money in steel—for mills or for suppliers— it is not impossible. In fact, “One should not manage to hope, but take destiny into your own hands,” he said.
SDI’s experience can be an example for other companies and industries. It’s easy to make money and outperform peers by doing three things right, he said.
The first is to be sure that the average raw material input costs are lower than the competition’s. The symbiotic relationship between its steel and scrap operations helps SDI achieve this, he said.
The second is to ensure that the average selling prices for its products are higher than the competition. SDI achieves this by focusing on creating value for its customers, developing niche market opportunities to insulate it from imports, and by exploring new markets. This has allowed the company to sustain higher production utilization rates through market cycles, generating greater profitability.
The third, and the key driver to its success, is the company’s lowest cost operating culture. While state-of-the-art facilities producing quality products is important, it is also critical to have a passionate culture in which to exploit it, he said. The right people in the right place create the backbone of a quality organization—they will create and sustain value for a company, its customers and its shareholders.
Although human needs and motivations have gone essentially unchanged for centuries, the number of companies that still don’t get it is amazing, Millett said. Their focus is on the business, not on its people. But people drive success. Culture needs to be woven into the fabric of the company, and needs to be reinforced every day, he explained. He encouraged companies to create a culture that builds mutual respect and trust among employees and management, that treats people fairly and equitably, that listens to its employees, includes them and empowers them.
SDI pledges a safe work environment and strives towards zero incidents—no accidents, no lost work days, no injuries. It expects superior performance, rather than being surprised when it occurs.
“It is amazing what can be accomplished by a team of positive, passionate people when the bar is set high enough,” he stated.
As he received the award, Millett commented, “It is both gratifying and humbling to receive such an award when it is as the discretion of one’s peers.”
The second honor for Millett was the William Hogan Memorial Lecture Award, which was established in 1990 in memory of the late Rev. William Hogan, director of Fordham University’s Industrial Economics Research Institute. The recipient of the award shares Mr. Hogan’s views of the importance of steel and is selected in recognition of individual outstanding leadership to the iron and steel industry.
Millett’s honorary lecture was entitled “Making Money in the Steel Industry Is Not a Mystery.”
Millett explained that, although it is not easy to make money in steel—for mills or for suppliers— it is not impossible. In fact, “One should not manage to hope, but take destiny into your own hands,” he said.
SDI’s experience can be an example for other companies and industries. It’s easy to make money and outperform peers by doing three things right, he said.
The first is to be sure that the average raw material input costs are lower than the competition’s. The symbiotic relationship between its steel and scrap operations helps SDI achieve this, he said.
The second is to ensure that the average selling prices for its products are higher than the competition. SDI achieves this by focusing on creating value for its customers, developing niche market opportunities to insulate it from imports, and by exploring new markets. This has allowed the company to sustain higher production utilization rates through market cycles, generating greater profitability.
The third, and the key driver to its success, is the company’s lowest cost operating culture. While state-of-the-art facilities producing quality products is important, it is also critical to have a passionate culture in which to exploit it, he said. The right people in the right place create the backbone of a quality organization—they will create and sustain value for a company, its customers and its shareholders.
Although human needs and motivations have gone essentially unchanged for centuries, the number of companies that still don’t get it is amazing, Millett said. Their focus is on the business, not on its people. But people drive success. Culture needs to be woven into the fabric of the company, and needs to be reinforced every day, he explained. He encouraged companies to create a culture that builds mutual respect and trust among employees and management, that treats people fairly and equitably, that listens to its employees, includes them and empowers them.
SDI pledges a safe work environment and strives towards zero incidents—no accidents, no lost work days, no injuries. It expects superior performance, rather than being surprised when it occurs.
“It is amazing what can be accomplished by a team of positive, passionate people when the bar is set high enough,” he stated.
