Nucor’s Hall sees bigger as not always better for largest U.S. steel producer’s supply chain

As executive vice president of flat-rolled products at Nucor Corp., Ladd R. Hall finds the company’s size – as the largest U.S. steel producer – to be advantageous, and it can also create challenges. But, as Hall helps orchestrate Charlotte, N.C.-based Nucor’s multibillion-dollar annual freight spend, he is always confident in the value of the company’s 23,000 employees. Hall, a 35-year Nucor veteran who is slated to provide the keynote address for the Critical Commodities Conference, to be held April 12-14 in New Orleans, offers American Journal of Transportation readers a glimpse into Nucor’s supply chain and corporate culture, as well as his personal priorities.

Do you have any surprises in store for those attending the Critical Commodities Conference? It all depends on what they expect. I don’t have any idea what their expectations are or what they think the market’s doing or not doing. I would assume that they’re pretty up-to-date on the matters that are important in our industry and around the world, so I would not expect to surprise them a whole lot. As the largest U.S. steel producer, operating 23 mills, how does Nucor leverage its supply chain in ensuring profitability? Being the largest has its advantages. It also has its challenges. In some cases, depending on the supply-and-demand scenario and whatever you’re looking at – whether it’s ferroalloys, iron units, energy – sometimes size really helps in leveraging programs. Anywhere specifically? It depends on what the market is. A good example may be you take raw material, you take scrap, for instance. In an abundant scrap market, size matters, because these guys who have excess material will come to somebody they know can consume it and will buy it, so you have the opportunity to do some different things from a pricing standpoint. When scrap’s in short supply and they know you need it, they have all the leverage in the world because they know you have to buy scrap. So size helps and hurts depending on what market you’re in, and that’s probably true with any product, whether it’s alloy, raw materials or energy. With most electric arc furnaces, not just at Nucor, another great example is the electricity. Most of the time, we have the ability to bargain with these big cooperatives or electric companies, saying, ‘We can take X amount of energy from you and we need a good deal to do that,’ and sometimes you can get a better rate than others could. But then, at the same time, you realize that when all air conditioners are running, they have the right to shut that mill down automatically, so your size hurts you there. When you talk about leveraging your supply chain, that works both ways. You’re trying to take advantage of it where and if you can, and, in some cases, we don’t use our size at all to leverage. How has Nucor’s corporate culture – including lean, decentralized management – helped shape the company’s logistics operations? When we first started back in the ’60s, we were just a little guy and were completely decentralized in every division that we had. There weren’t a lot of divisions then. Because of where they were, they had to do everything on their own. We had a very small corporate staff and made all the decisions locally. We continued to do that for many, many years. Even today, we try to push everything possible down to the division level. We believe our division managers and division leaders have lots more knowledge and intelligence than we do at corporate to make the decisions that affect them directly. We have become such a large company that there are some things where we’ve tried to use our size to leverage our ability to do a little bit better – and logistics is absolutely one of them – whether it’s trucks or whether it’s barge or whether it’s rail – where we can go in with volume numbers and, in most cases, that helps us somewhat from a logistical cost standpoint. What logistical challenges are posed by Nucor’s industry-leading role as North America’s largest recycler of any material? When you’re purchasing in the neighborhood of 20 to 25 million tons – and, depending on the year, up to 30 million tons – of raw material, that becomes a logistical challenge to bring it in to the different divisions and mills. The challenge there logistically is making sure we’re using the best mode possible to bring it in with the most cost-effective number possible to every division that needs it. A lot of our divisions logistically are close enough together that, if we let it happen, they would compete for that same ton of raw material. So we have to have a really coordinated effort to make sure that we’re not competing against ourselves and driving the price up one division versus the other. We have just developed in the last two or three years a logistical team that works for all of our divisions that helps us coordinate that and keep track of who’s getting what when and making sure we’re using our dollars wisely. I’m not going to give you any numbers, but when you look at the dollar amount that this company spends on logistics and freight every year, it starts with ‘b’ – it’s not in the millions, it’s in the billions. If we continue to work hard, and our team’s doing a great job, and you could save 1 or 1 1/2 or 2 percent of our logistics cost just simply because we’re doing a better job of coordinating, you can do the math pretty easily. You can save big, big, big dollars. Having been with Nucor since coming aboard in inside sales in Plymouth, Utah, in 1981, shortly after your graduation from Utah State University, have you ever wondered what it might be like to have a different employer? I’ve been very, very, very, very fortunate to have one of the best employers in the world from day one, so I haven’t spent a whole lot of time wondering what it’s like for somebody else. The answer is no. This is a great company that’s been very, very, very good to me and my family, and we’ve had great opportunities to grow. We have a little saying within Nucor, I believe since its inception through today and that will continue through tomorrow, that tells you we try to hire the right people, train them the right way, give them the right tools and then get the heck out of the way and let them do their job. In following that mentality, we’ve been very, very successful in being able to attract the right people and then allowing them to really succeed, which has really benefited this company immensely. How have you been served by your fluency in Japanese, as I see you minored in that language while earning your bachelor’s degree in business and marketing from Utah State? I served an LDS church [The Church of Jesus Christ of Latter-Day Saints] mission and spent two years in Japan. As a missionary in Japan, you learn to speak the language or you go hungry or you can’t find the bathroom or you can’t get on the train. When immersed for two years in a culture where nobody speaks English and all they speak is Japanese, you have the opportunity to learn it pretty well. When I came back after my church mission, I ‘clepped out’ [via the College-Level Examination Program] of all the lower classes and got my minor pretty easily. When I first started with the company in the early ’80s, I had quite a few opportunities to go back, and I worked closely with the Nucor-Yamato team. When we bought all the equipment and negotiated all those contracts, I had the opportunity to be over there with Mr. [Ken] Iverson [Nucor’s visionary president, chief executive and chairman] and went back several times. It’s been a good thing for me and a good opportunity to help out. I’ve been blessed in the opportunity to use that language. How would you compare Charlotte, N.C., and some of the other locations at which you’ve served in your Nucor career with your native Utah? Utah is home and my wife’s from there. Both of our families still live out there. But we’ve kind of had the attitude from day one that, wherever we’ve had the opportunity to go, we were going to like it, whether it was in Texas or Utah or a couple of different locations in South Carolina or North Carolina, there hasn’t been a place we haven’t enjoyed. You make a place what you want to make it. If you decide to go there and be happy, you’re going to be happy. And, if you don’t, you’ll never be happy. It’s a little like the story I heard one time about the guy who walked into the chamber of commerce and asked the director of the chamber, ‘Is this a good town to live in?’ And the chamber guy says, ‘Well, did you like the last town you lived in?’ The guy goes, ‘No, I hated it.’ And the chamber guy goes, ‘Well, you’ll hate it here, too, then.’ And, just the opposite, if the guy says, ‘Yeah, I loved the last town,’ the chamber guy says, ‘You’ll love it here, too.’ From a family standpoint, we’ve thoroughly, thoroughly loved the South. With a busy professional life, how do you possibly find enough time to spend with your wife and eight children? Not to mention the five sons- and daughters-in-law and 11 grandchildren. First of all, you’ve got to have a spouse who’s lots better than you are, and she is. But you just prioritize. You work your schedule to make sure you’re at kids’ and grandkids’ important events, and there are some events you miss, but Nucor honestly is such a great company and so family-oriented that they’ve given me the ability through the years to attend some of the things that a lot of companies wouldn’t have allowed me to do. If you’d ask me to prioritize my life, it’d be my family, my faith and then my work. That’s kind of the motto I’ve always lived by, and I believe I’m a better teammate and a better employee for Nucor by having those priorities. Nucor truly does care about the people who work for us. The thing that makes Nucor great is not the corporate office and not the Ladd Halls of the world. It’s those 23,000 people out there who bust their butts every day to make us a better company and truly have a lot of pride in who they work for and what they do. Our incentive and our culture have allowed them to have that type of mentality, and they do. These people are unbelievably great people, unbelievably smart people. What our people can do, given the opportunity and tools and right direction, absolutely amazes me. I wish I was half as talented as most of the people we hire. These people are amazing, I mean absolutely amazing.