Born Scrappy
This is the podcast for scrap metal traders and operators who want to get sharper without losing their scrappy edge.
Born Scrappy
Mastering Margin with Steve Deacon
In this season opener, I sit down with Steve Deacon, Chief Commercial Officer at EMR Group, for a masterclass on margin… where it’s made, where it’s lost, and how to take control of it across your operation.
Steve shares stories from his 20+ years in the industry, including starting out in a North Philly scrap yard, building and selling his own business, and ultimately taking on leadership roles across the US and now UK. We explore the art and science of margin: why it’s about much more than pricing, where it leaks away quietly, and how well-run yards build culture and systems to protect it.
If you’re looking to sharpen your commercial thinking and spot the margin killers in your business, this episode is for you.
In this episode, we talk about:
👉 The #1 place margin disappears in your yard
👉 Why “grade creep” can quietly kill your profits
👉 How to stop data overload from paralyzing your team
👉 Managing position like a trader (even if you’re a single yard)
👉 Why culture eats equipment for breakfast
👉 And more!
Born Scrappy.
Brought to you by Buddy.
The only marketplace and trade OS built for scrappies, by scrappies.
https://www.linkedin.com/company/tradewithbuddy/
WHO IS STU KAGAN ANYWAYS?
27 years in the metal recycling game and still learning and growing...
I learnt from the best and worked my way up from yard labourer to Executive Director of Trading and Operations for the largest metal recycler in sub-Saharan Africa. Responsible for 4,500 employees, 85 sites, and the overall profitability of a multi-billion dollar operation.
I brought my breadth and depth of knowledge to bear and co-founded the fastest growing, most-loved, and most awarded metal recycling company in New Zealand. No small feat in a country where people are outnumbered 4:1 by sheep (spoiler alert: sheep don’t produce much metal waste).
I thought it was time that tech worked for our industry, so I took all of my experience as an operator and trader and leveraged that to build THE killer scrap app, Buddy. That’s right - built for scrappies, by scrappies.
Father of two crazy-awesome boys. Husband to Lisa. Under 11 football coach. YPO member. Lifelong learner. Mentee. Mentor. Chief dog walker. Committed Stoic. Undefeated dance-off champion.
COME SAY HI ON LINKEDIN
https://www.linkedin.com/in/stukagan/
https://www.linkedin.com/company/born-scrappy/
The scrap metal recycling industry has always run on hustle, trust, and sharp instincts. This is the podcast for traders and operators who want to get sharper without losing their scrappy edge. I'm Stu Kagan bringing you insights and stories from the people shaping the future of our industry. This is born scrappy. Hi Steve. Welcome to Born Scrappy. Thanks for having me. I appreciate it. It's good to be here. Uh, we spoke about this for a while, so I'm glad, um, I'm glad to get you on. Now, we've been trying to get, um, somebody from EML right at the top, but I guess the Shepherd Brothers are a no-go. And, uh, they passed the baton over to you, Steve. Oh what? Lucky me. Lucky you. Exactly right. Steve, before we get started, this season's all about master classes. This episode we're gonna be talking about mastering margin where the scrap yards actually make or lose money and trying to focus on where margin kind of disappears in yards. But before we get started, just to tell everybody who isn't aware, you're currently at EML Global, so you're based in the UK now. So I'm the chief commercial officer of EMR group and based in, based in the UK and Warrington. Okay. And previous to that, you were the Chief Commercial officer in the us, is that right? That is correct, yeah. Okay. So you got moved to uk, um, the UK for your sins, and now you're there. Tell us a little bit about how you got started in the industry and kind of all the way to today. Yeah, absolutely. I started in the industry about 20 years ago now, just over 20 years. But I think, um, like most scrappy's there, there's a point. It is the point of last resort, the job of last resort. Sometimes it was two weeks from graduation at university. Um, and I don't think I was a particularly positive contributor to society during my four years at university and two weeks before graduation needed a job. I didn't have a job, hadn't applied for any jobs, and got offered a role in a scrap yard, third generation scrap business in North Philadelphia. So I moved up to Philly right after graduation. The owner of the yard let me live with him because he didn't think I'd make it, and he thought I was too soft coming in from university. Um, and then I think to, to make a point of it tried to give me every, uh, the worst menial tasks you possibly could imagine in the scrap yard for the first kind of six months that I was there. So, uh, unfortunately for him, I, I loved it. Uh, enjoyed every second of it. Learned a tremendous amount. I think, uh, the yard definitely punched above its weight, much like the city of Philadelphia does. And, um. Yeah, it was a, it was a fantastic experience. So I, I did that for, uh, about 18 months, and then I started a small retail yard in Philadelphia that I think I just hit the, the timing lottery on, and those yards sold to EMR in April, 2008. So I've been with EMR since then. You know, obviously coming from a small. Family runs scrap business and getting bought out by a company like EMR. A bit timid, a bit concerned when transaction first goes through about what your future looks like. But I'd say over the next 10 years, I was mentored by, uh, Joe Bolzano, who's the CEO of the US business today, and had a variety of roles from retail facilities as an analyst for a period of time. And then I moved over into non Ferris. After a couple of years in the regional non Ferris, um, business, I took over the US non Ferris business. Um, did that for a number of years, oversaw the East coast, the region Ferris and non Ferris auto parts deep sea vessel loading, and then transitioned completely into the commercial side of the business maybe four years ago now. And then, like you mentioned earlier, the last 18 months I've taken a group role in the UK and moved my family 3,400 miles to to Sunny Warrington. There's nothing sunny about that. It's quite an adventure. Um, it's quite a change, right? I mean, you went from family business to large. Um, I don't wanna say corporate because you guys still have that privately owned sense about you, but it's a big jump, right? It must have been, yeah. Very, uh, nerve wracking at the time, I'm sure. Yeah. It's a, it's a massive jump and a big difference. I do think that. The EEMR, as large as it as it is, you definitely get both a corporate component and a family owned component, so it does a really nice job of sitting the balance between the two. There's days you wish it was more family owned and more scrappy. There's days you wish it had a bit more structure, but I think it walks that that peak pretty well. So yeah. Yeah, that is, that is tough. Um, you know, the company I was with in South Africa having the same kind of experience. There's certain things that you have to do, which is corporate and you need that level of oversight and some red tape, but at the same time, you wanna be able to make decisions really quickly to be able to operate and, and, um, have an impact. So. That's right. Yeah. I, I get that. Let's, let's jump into margin. Let's start talking a bit about margin. You know, a lot of people when they think about margin, they just think it's about the market. It's a pricing problem, but rarely for operators, it's so much more than that. And it's not just purely the margin you make at the front scale. It's, you know, your yard, your people, the equipment and those decisions kind of compound over time when, um, you think about margin. Where do you think that people, I guess oversimplify the word and when they talk about it in the industry? So, so I think one of the beautiful things about scrap businesses, I would separate that question into two, um, because I think. People that have been in the scrap business for a long period of time and have bought and sold scrap, they have the most incredible way of rationalizing any margin on any transaction with the most incredible factors imaginable. Um, so I'd say they use a lack of simplification in order to rationalize what they believe to be. Um. The right margin when you get exposure to individuals with less scrap experience that that, that haven't bought and sold, sold themselves? I would say that there's a couple of things. The first is that they can't be top loaded. Margin can't be pushed down from top as a block. I would say that that would be the first piece. Um, and as a function of that, you can't set margins. It's very, very difficult to set a margin in any market, and, and even if you do have the ability to do it, the second you have market movement or competitive forces moving, you're having to adjust and move so it's not sustainable for any significant period of time. Yeah, that's a great point. It's hard to set more. You obviously set a buying price and you can do that if you have hundreds of yards or 10 yards. You can set a buying price, but you can't set a margin because things are constantly changing and your costs are changing as well. So that makes a little just double click on the first part where you were talking about, um, top down blockade. What did you mean by that? I think that there's a tendency from individuals from other industries. To look at your cost base, look at the market and say, based on X and Y, your margin should be Z. Therefore, your sales price less Z equals the price that you should be paying into the market. And I think that it just doesn't work. Um, as a bit of a side note or done a lot of studies, but one specifically around the correlation between retail pricing and sale pricing and, uh, there's no correlation that exists. So the sale price and scale price don't have a statistical correlation worth, worth anything. And that's wild, right? Like you say, if you're come in from any other industry, all of that can be set from the head office. It's quite easy to extrapolate and forecast because your margin should be known. You're buying widgets, you know the price, you know your overhead, you know your sales price. There's so much more to take into consideration in our industry. So let's delve a bit into that. So, I guess. Most margin, most of the loss of margin doesn't always show up all at once. Where does margin usually disappear and where people don't even necessarily notice it? That's a actually a pretty easy answer. And any process where you have a yield factor, I believe that invisible shrink, that pre shrunk, that expectation of yield through a process, I would say is without question, the easiest place for margin to disappear. And then usually there's a lag. Some kind of lag between when you understand the true yield of material versus when you committed to buy it, when you bought it, or even when you processed it. So I would say that time lag against a yield factor. It's really easy to get upside down pretty quick. Yeah, I think you did simplify that. I'm glad I've asked you the easy questions. I'm gonna ask them harder ones later on. Uh, but uh, you know, there's, there's also things like labor inefficiencies all of a sudden that effect like downtime, um, you know, inventory problems that you might have. Uh, quality, I dunno if you mean when you say yield, are you also talking about like downgrades and quality issues, or is it specifically just what's running through your equipment? Well, I think through the, I think through the first two questions, there's a tremendous amount of grade creep. And grade creep can go both directions depending on how good you are, how good your teams are, how strong your processing equipment is. And so I would say grade creep is a large factor that that is. Kind of an invisible or an unknown, typically speaking, um, from, let's say downtime or a labor inefficiency. Generally speaking, I don't see them as one-offs. And you do have events within operations that, that are one-offs, but in yards that run efficiently. It's relatively straightforward where you have large inefficiencies. You already know that upfront. I like the term great creep. I gotta be honest, I, I haven't heard it used before. Great creep is something that you can manage when you're smaller, right? I was just, the other day we were interviewing somebody and we were just talking about how. Before you grow, you have so much more influence of what's being bought at the front scale. You're, you're so involved and it's one yard and the owners, you know, knows the customers by name and he knows what grades are gonna come in each day and he can oversee and make sure no, that's not the right quality. You know, women should buy it as X. And it's, when you start to become bigger, that grade creep becomes a real, real issue. I guess. What is the intention of it? It's not necessarily that people aren't. Trying to do their best in their job, but training is hard in this industry. You know, getting people to stand on that front scale that are fully trade and know what they should be buying it at is tough. Yeah, there's layers upon layers to this in some of the more corporate, uh, scrap businesses. There's a general lack of discretion that exists, right? So the expectation of your workforce is different than it is in some, I think you're using the word scrappy's yards. Um. And so I think that grade creep is something that some people encourage and other people discourage, um, because there's also other behaviors that come from it that in some worlds are less compliant. So I think that there, there are challenges with it, but it definitely introduces a level of ambiguity to any trade that it's not black and white. Look, I think we could talk for hours on that last bit of that topic. You know, when you should want great group, when you shouldn't want great group, what is the intention behind it and the difficulties to manage it, especially when you have multiple yards, you know how you should view that. It can affect the customer experience, how you're buying the material. You're focusing on upgrades, but we're not gonna delve too much in that. Obviously upgrading is a massive part of margin. I mean our industry, but that mostly should come from equipment processing instead of. Robbing people at the front scale and trying to upgrade in that way. When have you had an incident where there's been some sort of small operational issue that quietly turned into a big margin problem? I, I, I think that when you look at the margins that most scrap businesses are working on, and then you look at the effect of small operational issues. It is scary the proportion of margin at risk with small operational issues, and I wouldn't say I wouldn't belabor a small operational issue becoming a large issue. Apart from where you see inventory loss and you have fraud issues in yards. And I think that is definitely the case there. They generally start small, um, very difficult to notice. They start to grow a little bit and then they become behemoth issues. But I would say the scarier part is it could almost be a death by a thousand cuts. And so at 50 different points between when you've committed to buy material and when you've sold material, you can lose. Easily 10 to 20% of your gross margin at a minimum on each one of those issues throughout, and they add up very, very quickly. You know, we spoke about just the other day we were speaking about having that sort of data. Because when you're a large operation, to have the buyers be aware of what the market is doing at any time is really tough as well. You can track the LME, you can track whatever indices you want. It isn't necessarily exactly what's happening live right now. The percentages and the discounts can change at the same time, and that's really hard and that can have a huge effect on the group's margin. That's for sure. That kind of talks a little bit about data. Now, how do you track data, I guess, in a larger operation? You know what happens when the business doesn't clearly kind of define which numbers actually matter. So what happens when you're not tracking those numbers and what numbers should you be tracking? Yeah, I, um, didn't mention earlier, but about, say six years ago now, I started on a, a data journey within Scrap, empowered by Chris Shepherd to really explore and, and challenge the status quo of data within commercial decision making primarily in the industry. So I spend the vast majority of my time between the buy and the sell, trying to leverage one against the other, and in most cases, utilizing data to do that. Um. I would say that data overload happens very quickly, and so I would directly answer your question in two ways. The first would be that whether it's, when you say clearly defined, I look at it in one lens and say, um, well actually, if you overload individuals with data, they don't know which way to turn. And so that's one of the big challenges I think with data today is there's so much data accessible that, uh, you can very quickly get overwhelmed with it. The individuals that are driving data, um, have very rarely worked on the sharp end of the business. And I don't mean that in a negative sense, but, um, the, the most important piece of utilization in my opinion of any data is being able to embed it within the organization, taking the specific pieces of data that you want people to focus on, and providing it to'em in a manner in which they can consume it. And that, to me is the key. It's much less about. What the specific metric is, and it's much more about the ability to consume that piece of data is key. The other side of it is that it's actually no different in a smaller operation than it is in a larger operation. It's all about delivery of expectation and managing expectation, right? So it's expectation setting within you are, where's your focus, what's your priority? And that's where people creep back into data and creep back into decisions that the data is only as good as the people that are utilizing it, the people that are managing it, the people that are managing with it. Um, and then using it to help the business as a tool to become more efficient, more knowledgeable, and obviously more profitable. You know, you spoke about the people that are building it and designing the technology to pull that data. Haven't worked on the sharp end of the operation. Or the industry. And that's such a good point. I mean, it's so much to do with why I started the business I did. I just don't feel like there's technology out there that's being designed by people in our industry. And we spoke at the REMA event a while ago about why is it that companies struggle to build their own. And the main reason is you can hire all the engineers you want to build your own system, but if you're not gonna give them somebody full-time that's worked in the industry for 20 odd years in all different levels of the business, if you're not gonna give them that, then how are they going to just. Be able to work out what data and what are the things that you're looking for. And most, I remember you actually said it to me right there, you were like, it's hard enough to find good scrap guys with five years experience, let alone 20. Who's gonna sit with an engineer for two years? You know? And that's one of the key things. Yeah. I mean, I, I think even in looking at what you've developed, what becomes readily evident is the nuance in it. And from a user experience. Perspective in a user interface. There's a logic to it that you have to have experienced it in order to do it in the way that you've done it. And that comes across very clearly, but incredibly important. And I would echo what you said, that there is a desire by leadership within the industry to say, we need data, or we need technology, or we need software solutions. And the answer to that must be okay. I go out and hire an individual who's going to do it for me. And I'm going to give it to them to do, and it just doesn't work like that. Steven, I want to just ask you one more thing about the data. Is there any specific data points that you believe every company should be looking at? I mean, there's quite a few and we get overwhelmed by the amount of data, but is there something that, like if I have three yards or 80 yards or even one yard, is there something that I should definitely no question be looking at on a weekly, daily, monthly basis, whatever it might be? I believe that data point is the spread between what you can sell material for at any one given time and what you just committed to buy it for. So the gross margin, is that what you're saying? The actual margin between the scale and the sales price? Uh, at the point that you make the commitment? Yes. Which commitment? The sale commitment or the buy commitment, or both? By commitment. Not the sale commitment. Right. So you wanna really be monitoring super closely your buy prices as much as possible. That's my opinion. Yes. Steve, you know, I was advising somebody the other day, which I sometimes do on the side, and, and one of the key things I picked up was that the CEO, and they only had one yard, didn't have any idea what the buy prices were. It's one yard. It's a family operation. And I'm like, how do you not know the by prize? And they said, well, I'm focused on other things. And I said, literally. That is the first place we're gonna start because once you can actually understand how you're calculating the buy price, only at that stage can you start to look at, well, what are my overheads when I break that down? What does that cost per ton or cost per pound? If you don't know what your margin is, if you don't know how you setting that buy price, there's actually no way you can work out any, you can't work out your gross profit, you can't work out your net profit because. I guess that's where it starts. It's a valid point. Yeah. I think that, I have to admit that when you sit in the middle of the two transactions and, and even at one yard, so if you have a, a single yard and you have people on the road buying or you're scale buying and you have another family member selling the material, or you have somebody on the sales side selling the material and you're sitting between the two, there's points of times where like one is an input and one becomes an output. And I've been caught where I didn't know what copper closed at yesterday. There are days where you get caught up in the middle and you're not looking at the input or the output because you're just focused on managing what that middle ground looks like. Um. And then obviously you have what you said, which is they just have no idea to buy the sell or the middle, which is a bit different, which is not the place you wanna land up in. I wouldn't think so. So I guess anybody who's listening for me, it's really like, if you want to start, if you're having a few issues on margin or profit in general, start what you're paying. Start is simply at what you're paying. Look at how you're selling. Do you have one buyer only? Are you just constantly selling to the same buyer? Does that mean you're getting a market related price all the time? Like, look at that. Look at how you can maximize that, and then roll that down into operations.'cause a lot of people immediately go, I don't make profit. I need to get rid of people. I need to drop my costs, et cetera, et cetera. Instead of going well. Of course you need to look at that and where is there excess? Where is there fat that you can remove? And how can you be more efficient in the processing of your metal? But really what is your buy and sell margin and, and how can you maximize your gross margin? And just to clarify, I guess,'cause this is a market growth, if people aren't sure what I mean by gross margin and net margin. Gross margin is the difference between buying and selling, and that's purely just the buy and the sell price. After that, after all the costs, et cetera, that come up against that commodity, that would then give you your net margin. So when we're talking about gross margin, which is what you, Steve are talking about in particular, now we're talking about the difference between your buy and your sell. How do you maximize that? You want to sell for as much as possible, buy for as little as possible. But there's obviously competition. There's time you have available to find more buyers and vet more buyers and be comfortable. You also wanna make sure you get paid, so, uh, it's not just about finding some guy in another country who offers you a good price, make sure you're doing your vetting, et cetera, which is something we focused on at Buddy to try and make things easier for people. Steve, is there ever, ever been a metric or something that you just put in place that kind of was like, that changed the performance of the company? I put together a metric and I sent the metric out. Um, it was probably five years ago now, and I got a response back from Chris that said, does this add any value to anybody? Um. I love it. And so it's a good question. So while I may not have achieved the best metric ever, I believe in his mind I achieved the worst metric ever, um, as he thought it added no value to anybody in the history. Um, wow. But funnily enough, I actually printed it out. I cut it out, I put it up on the wall in my office, and then as I produce things, I say to myself, who does this add value to? Does this add any value? When you get into data, it's absolutely fascinating and you can go down a million rabbit holes and not know which way is up. And sometimes you forget what your guiding mission is. And so I think it's very important to remind yourself of what that is. I would say as a bit more of a direct answer to your question, but obviously not a completely direct answer to your question'cause I haven't done that yet, obviously, because you like a politician. Yeah, yeah. The um, I, um. I avoid arbitrary benchmarks. I avoid starting with what I want something to be. One of the benefits of being in a large organization is that because of the number of operations that we have, I have the ability to use ourselves as the benchmark. So I can use the core business as the benchmark and identify outliers. So in, in any metric, I think you have to place it into perspective. And you have to present it in a way that has perspective. And the starting place from a, uh, from both a commercial and an operational perspective is, is yesterday, right? It's where did you come from? Because really what you're looking for, I isn't an arbitrary benchmark because that really doesn't do much for you, but you're looking for some level of improvement, um, or you're looking for more of a line than you are looking for a specific number. At least I am. Um, and so I'd say that's what I try to do. You touched on a great point where it's like data for the sake of data, right? And that's the, what the email said to you, like, is this gonna add any actual value? And so many times I look at software systems in our industry and you can pull reports until the cows come home. But the, it's an oversupply of data and there's data that you actually are not gonna help you turn the dial. You know, I had the pleasure to the last two and a half years of actually building out something where I got to rethink about what technology should be telling us. Right now. I think I showed you the one time, and this is the only episode that I've actually mentioned buddy, like three times, but I got to pull data, which I never had before, and one of the things was I always wanted to know. Who in my yards was the best at loading a container? So who that's operating the material handler. Who is the fastest, who's getting the least amount of claims, who's getting the best, most accurate weight in those containers? I was able to come up with a yard app the way you actually made somebody accountable and attract their timing, attract if there was any claim at a later stage. It also track, um, the weights that they got in the box.'cause that to me, from running operations, like I want to know that Peter in my yard is the best. So what do I wanna do? I want to give him as much as possible to load, but also I wanna have him train, you know, John and Tim in the yard to make sure that they are trained and they are learning from him. Also, I can find out is one guy always putting the least amount of weight or always getting claims? Okay, well I need to have a meeting with him. I need to have a discussion. So. Just to touch on the point, like data for the sake of data is not worth it. It's about really finding, like you got in that email, really finding where that data can have an impact and make a difference. I totally agree. It is becoming a bit of a data conversation, but, uh, with, sorry, your, your, yeah. No, I Look, I love it and hopefully we haven't lost half the listeners. So with, when we talk about, I, I'm, I'm shocked if any are left, but go ahead. So when we talk a little bit more about data, uh, multiple yards. Where do you see the operational data that is being collected but not actually turned into better decisions? So we were talking about that you might have too much, but where are we not utilizing enough of this data from a commercial perspective? Um, I think it's collected in a sense. I don't think it's aggregated or cleaned, and I don't see it heavily utilized at all. Um, from a strictly operational sense, I think that. The use of telematics and where telematics sit and how they're incorporated into operational decision making. I think one of the. Challenges you have is when you're bringing together different solutions for different things. So I bought a crane from x uh, manufacturer, and it's got a telematics kit on it or telematics package attached to it. I've got a piece of equipment that has a separate set of telematics attached to it. I've got my trucks on some kind of asset. Uh, tracking tool. And so I would actually say that it's much less about where you have a single strand of data that's not utilized, but it's more about connecting the dots between the different solutions that you have. So it come back to solution you were talking about within the yard, and you start to pull in payroll hours and clock in and clock out. And number of people on. And then from a driver's perspective, let's say you've got driver's hours, you've got hours driving, you've got time at your yard, time at their yard, time in transit. You have inefficiencies all over the place. And, and each one of those buckets have an enormous ramification on profitability and, but they're collected in different solutions. And so it's being able to pull two solutions together at the same time, or multiple solutions together at the same time, and draw a conclusion from utilizing. Together, AI solved that. I mean, AI now allows you to pull data from separate systems and get insights that you need. And if you have a software system, you know, which is was built in the eighties, you're gonna probably have some problems with that. But if you've got a newer software system, it absolutely makes sense to use the AI to find those insights and to be able to put those systems together before. We talking about a lot of manual work trying to analyze each different system and trying to tie them all together. But I totally agree. There is so much information out there and if you can just collect the right ones and put them in the right place, there's massive amount of efficiencies. And this is more like I, I get that it's easy when you have one yard. Well, it's easier. When you have one yard, because you can actually see the truck leaving and like, oh, what took him so long to get back? I mean, I remember being in my yard in New Zealand being like, what took this guy so long? I've been that customer a hundred times. It takes me 10 minutes. But when you have 80, a hundred, 150 yards, even 10 yards, five yards, it becomes a lot harder, and that's where you really rely on your systems. I, I would actually say that when things leave your yard or things are happening outside the fence of your property line, that's where I would focus, even if I was a small operator. So you see the mass balance of the truck left at X time and it came back at y time, but you have no idea what occurred between X and Y. And so if you were to make it. Small operation conversation, it would be about any event that occurs off property, that that would be the focus for me, because I think that's where the biggest opportunity is generally speaking, where you've got one yard, you know, every single nook and cranny of the yard and every single activity that's occurring on site. And so generally speaking, you're not walking past the idling material handler that's been sitting there for four hours in a praying mantis position over the pile waiting for. Life to end or something. Um, but when stuff leaves the property, I would say that's the biggest risk that you have. Yeah. Yeah. That makes sense. Uh, let's understand what do well-run operations do differently when they talk about protecting margin? So we spoke about buy prices, sell prices, better run operations, how are you able to manage it, and what are like recommendations that they should be doing? When I think of larger organizations with well run yards, I think what the advantage that they have is availability of professional resource. I think that they deploy it really well. Some larger organizations where you have a large compliance team that you're able to draw on as the manager or owner of the site. Your compliance is at a very high level. It makes it quite a bit easier, and I would say that that that is a differentiator for larger businesses. One of the. Amazing things about coming to the UK is getting access and exposure to both our European and UK based businesses. And, uh, take as an example, our deep sea loading facility in Amsterdam and Rotterdam as well. But I'll focus on Amsterdam, um, through. All of my years of experience, you show up to the yard and absolutely flabbergasted at how impressive it is and how impressive it's run and all of the systems in the world, all of the equipment in the world. It boils down to culture and people culture on site. I think nine times outta 10, and when you take. That example. And you say, okay, I find some single site enterprises to be much, much more impressive. And once again, they have the same material handler I have. They have the same frigging bayler I have. They're getting their uniforms from the same place. But it just boils down to the culture and it boils down to the people within the yard and the inertia that the yard creates. And I don't think you can. Underestimate the value of culture. I think they say, uh, what does it say? Culture eats strategy for breakfast or something like that. That's exactly it. That's exactly the right thing. Yeah. That's not my favorite quote, but I think that's definitely something I believe in. It's interesting because we are talking about, um, you know, how can smaller operators, I mean smaller compared to EMR, right? How can they have an impact and. It's quite interesting'cause you've seen so many yards and really what sticks out for you is the team and the culture. And a lot of people give it lip service. I was speaking to somebody the other day, just like so many people say that, yeah, yeah, yeah. We, you know, we're all about our people, but actually in practice and I go and see a lot of yards. There's no way that's true. You could just see the guys aren't happy to be there. Yeah. You, you know, you buy them a pizza once a month. They're not necessarily gonna change culture, but it's about if they feel a part of something, if there's something bigger than them. If everybody's pulling in the same direction. Right. And you have a leader that's motivating people and inspirational and gets people excited to go in the same direction. I just wish I would see more people actually practically do it. Because like you said, you can see the impact in the yard. Yeah, I had a really interesting conversation the other day about whether you can tangibly measure culture. As much as I love data and as many, uh, listeners have dropped off because it's all we've talked about, culture to me is purely gut feel. You walk in, you feel culture, you feel inertia, and there's, there's substitute for the feeling. Yeah, I agree. Okay. Finish this sentence for me. Most margin loss is not caused by bad markets. It's caused by what? Physician management, I think. Ooh, let's double click. Go into that. When we talk about margin loss, I think it's a difference between an expected and an outcome or an expected and an actual. And the biggest difference I've ever seen is in position management, risk management, risk mitigation. And I think it takes a form at, at any size company that you look at, um, the word position maybe takes on a different meaning. So when I talk about position, I'm talking about. The amount of inventory I have, plus whatever I'm buying, minus what I have sold. And that's how I would simply calculate position and whether I'm long or short in a market. And I think that the volatility that we've seen, I mean, take copper for instance, the massive volatility in copper. If you have your position upside down, you, you are, you're in a world of hurt. Um, and so I think it's position management. When you said it, I didn't know what you meant at all. And maybe that's'cause I'm a bit slow, but when you explain it, I think that is. An exceptional answer. Position, management position being where you are on the, in the sales process right now for anything, you know, what is your position? Um, and people use that when they're trading. And we've got a great episode with Craig Weber from Middle Exchange, where we're gonna talk about positions and forward contracts, et cetera, et cetera. And that's really what you're talking about. That makes a lot of sense when we talk about margin. You know, I come from the school of. Selling before I buy. So having a locked in margin, know what I'm buying against. Absolutely. I've been told this so many times. I just want to say, as a Kevin, you have to be doing a decent amount of volume to be doing that. You need to be moving these containers or whatever, however you packing it, um, often because you can't be loaning it over a month. You need consistency. Exactly. Absolutely. But that's exactly what you're talking about. It's about managing that position. Knowing where I stand at any time is the way you lock in your margin, the way that you don't lose margin at any time. And I think you, you can add, uh, one layer of complexity to it because I think. The way that you buy against position, and you mentioned it in terms of, I sell before I buy as a strategy, but the inverse is also very common. Um, I buy material, I sit on it, and then I sell it. And so, but, but whatever case is you, you've got a, an expectation of margin or sale price when the commitment is made or in the inverse, an idea of what you're gonna buy. Relative to what you're gonna sell in your scenario, and then when the market moves, how does your strategy shift? How does your approach to buying shift based on the movement in the market? And so it's a slight lens on physician management, but I think it has an enormous impact for margin loss if you don't control it properly. Look Steve, I'm just happy we ended on margin and not on data. So if there were any listeners that were still, um, listening that we got to tell them a little bit about margin at the end as well. Um, I'm just joking. I think there was exceptional. I think, um, there was a lot on margin and I think it'll open a lot of people's eyes when they hear the word margin. You know, there's so much more to it and there's so much more they should focus on, but before you run away. Every guest gets asked the same four questions so we can get to know you a little bit better. So when we next see you, we can be like, oh yeah, I like the same book as you. So what's your favorite TV series or movie? Uh, TV series would be succession, um, movie would be any James Bond. Cool. Big fan of succession. Um, it's, uh, it's, it's, it's amazing. James Bond. Do you have a favorite James Bond? As in the actor, not the movie. Oof. Uh, that's a great question. I am not prepared for that question. Um, and the answer, the, the, the answer is no, I do not. Probably Sean Connery, but I was gonna go Sean Connery. So, um, yeah. Good work. I thought I was gonna be like, do you not know any, was that just a lie of an answer, James Bond? No, but no, the English people don't like a Scottish James Bond. They want an English James Bond. So there's a bit of, uh, I'm, I'm learning the, uh, intra island rivalries here. Mm. Mm. And so it's kind of like, um, if you were in Philly, you would've been like, Sean Connery, no problem. But because you don't wanna be lynched in the uk, you're like, ah, maybe Sean Connery, but he's a bit too Scottish for me. I'm not political, I'm not you're politically, particularly particular political person, but yeah. Oh yeah. So far every question you've said, well, I hear your question, but I'm gonna answer it in two different ways. So that's pretty, pretty political to me. Uh, what's your favorite place to visit? Since I've moved to the uk back home is favorite place to visit. Makes sense. Um, very close to my brother, who also works for EMR. And his family. And so my favorite thing to do is come back and see them and see family. Is that, is that Philly itself or It's New Jersey, but Philly, New Jersey area. Yeah. Have you got a favorite book? I have two. Uh, I think, uh, favorite lifetime book number of the stars is my favorite lifetime book. Favorite recent read? Um, ooh, lemme think. Uh, I was particularly entertained by the world for sale. Brilliant. Have you read that? Yeah, of course. It's entertaining. The oil trades entertaining. Yeah, so those would be, I guess my two I, I liked World For Sale and I just finished reading Metal Men. I dunno if you've heard of it also. Really? Yeah. Like the Mark Rich. Absolutely. And last thing is, have you got a favorite quote. Yeah, like every answer to every question, and we'll finish it the same way. I've got two. Um, one of the guys I have maybe more respect for, or as much respect for anybody in the scrap business. Um, sent me a quote, uh, Teddy Roosevelt man in the arena, and I would say that tops the list. The second is my dad Growing up, my parents are English. Moved to Macon, Georgia from the UK 45 years ago. And for some weird reason, my dad had a quote from Vince Lombardi on the wall about winning. Winning is not a sometime thing, it's an all time thing. You don't try hard every once in a while. He try hard all the time. Uh, winning is a habit, but unfortunately so is losing. And he used to make a stand and recite it before a big game or a big project or a big test or something. So yeah, those would be my two. That is awesome. Um, you didn't mention who the person was who sent you a man in the arena. I gotta have a tremendous amount of respect for Okay. And you say you're not a politician, so, um, that is one of my favorites too. Love man in the arena. Steve has been lots of fun, man. Thanks for joining for Scrappy. Oh, you're welcome. Cheers. That's it for this episode of Born Scrappy. If you have any questions, stories, or topics you want us to dig into. Send them my way Until then, keep it scrappy.
