Everybody in the concrete industry will agree that it is not easy to run a concrete plant in the current struggling economy. Like any other industry, it imposes rapid changes and demanding challenges, but it also offers its share of opportunities. Concrete plants do not have any other choice than to adapt their operations to this new reality where small and large producers can be back on the path toward profitable growth.
The first consequence of this challenging situation is the fierce pricing pressure. Contractors are now more than ever very demanding in terms of pricing and don't hesitate to question longstanding relationships. On the other hand, the level of requirements hasn't stopped increasing, and concrete producers find them caught between a rock and a hard place.
As a result, you're probably experiencing a high level of competition that you've never seen in the past because each of your competitors faces the same dilemmas.
In these circumstances, business advisors recommend staying away from the turmoil of price wars and insisting on added value creation. At the last NRMCA conference, some industry experts came to the same conclusion. For contractors, added values can be found in high-performance added products such as steel fibers or highly reliable delivery services. But that's not all!
The key to more productivity also lies in the operation process's rationalization because concrete producers will be surprised to see that hidden dollars can be found in the backyard of every concrete plant.
This question might sound like a provocation for many of you since a concrete plant is far from a treasure island where gold can be found behind every palm tree. But a thorough examination of concrete plants' processes has led MARCOTTE to determine areas of improvement for profit growth. The idea is to improve your profit wedge.
Simply put, it consists of diminishing unnecessary costs and maximizing revenue growth.
As we already mentioned earlier, one way to increase profit is to deliver meaningful added values to your customers. An excellent example of an in-demand product is the Self-Consolidating Concrete. Easy to set, this type of concrete is very well appreciated by contractors since it represents a time-saving opportunity and even offers strong resistance capabilities for complex molded structures. So, with your customers, never forget to highlight the benefits of this type of concrete.
On the other hand, concrete producers can save money with their batching operations by carrying out wise inventory management. Ingredients like cement or admixture are incredibly costly and need to be managed with care and precision. Moreover, poor raw material management can impact not only your cost but also the quality of your concrete. Hence, it will affect your customer satisfaction and your organization's reputation. In this industry, consistent quality is one of the keys to your success and will save your company from paying expensive claims.
"Optimization" sounds like a very trendy expression these days. It represents for you, concrete producers, that you have to take full advantage of your resources. At the delivery level, it means your plant and your truck fleet. The concrete delivery process is a road full of obstacles that are sometimes difficult to anticipate: traffic, accidents, and delays at the job site. But with today's technology, it is possible to adjust your job scheduling just a few seconds later after these incidents happen. On the other hand, inevitable road bumps are predictable! For example, the level of experience of your truck drivers is something that you can consider in a wise and precise job scheduling. Here, the objective is to organize your resources to maximize the Return On Investment of each of your trucks.
Ready-mix dispatchers often lack information, especially when they schedule jobs for the next day. Even though we would like to, it is challenging to please all our customers. We try our best, of course! But in real life, certain customers have to be served as a priority. Now, I raise the question: How do you prioritize your customer orders? How do you establish that this customer will receive your first concrete truck of the day? Some will say that they always serve their most profitable or loyal customer. Even with these types of criteria, it is not easy to have an objective approach. Concrete producers' dispatchers need reliable and updated data about their customers to make these decisions. It starts with sales and profitability history, claims amounts, Day Sales Outstanding (DSO), or unexpected events…
How to sharpen your competitive edge?
Today's technologies are now available to help solve the problems we just mentioned. Probes can be installed at each corner of your plant to capture the humidity and temperature levels that impact your mix designs. Batching systems are now intelligent enough to aggregate these data and make necessary adjustments to your mix designs all by themselves! The advantages of these good practices are a clear improvement in quality consistency, a straight reduction of your material cost and a time-saving opportunity for your batchers. In effect, these systems will produce the same quality level of concrete, batch after batch, regardless of the environmental conditions. Furthermore, the manual interventions in automated systems that are sometimes banned by specific regulations will become unnecessary, significantly improving your material inventory management.
Batching systems have also made tremendous progress in handling complex mix designs. For example, within MBatch, it is now possible to modify the discharge sequences of materials, so it simplifies the manufacturing process of complicated concretes like SCC. The flexibility of these types of functionality makes spec targets easier to reach and helps your batchers save a substantial amount of time.
Integrating tools like Google maps and GPS allows reacting instantly when unpredictable events happen on the dispatch operation side. Plus, these systems guide dispatchers throughout the delivery process to optimize the operation during the load time, wash time or on the road. At each step of the delivery process, time and money are saved. Mobile devices combined with centralized IT systems provide meaningful and constantly updated information, so your dispatchers are always in complete control to make the right call.
Also, Dispatch systems can leverage customer information like sales, profitability and DSO. So, when your dispatchers make their schedules, they can prioritize specific customers in full awareness of their values for the organization. According to business management experts, productivity gains are found in the cooperation between departments. MARCOTTE associates the sales and accounting departments with the Client Scoring functionality to the operation's decisions.
The evolution of technologies impacts every industry. Data processing and information are the epicenters of this revolution. We at MARCOTTE welcome the idea that data has become an asset and information a weapon against your competition. But data will only become information if it is meaningful for your employees. Batching and dispatching systems sustain your organization in this quest where time, information and money are connected to give you the edge over your competition.