Inventory Replenishment On-the-Go

March 14, 2018 Karli Langner

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Radio on Command presents, Building Over Beverages, a Command Alkon podcast delivering thirst quenching insights into the challenges facing the heavy building materials industry. And now, pursuing his passion for technology, supply chain, and delivering meaningful outcomes, here's your host, Ed Rush.

Ed Rush: Today on Building Over Beverages, we have Jason Campbell, Command Alkon's product manager for Supply Chain, and today we will be talking about supply chain management and how it applies to our industry.Welcome, Jason.

Jason Campbell: Thank you. Glad to be here.

Ed Rush: Before we get started, it's Building Over Beverages, so let's get your beverage ready for this conversation. What's your favorite work time beverage?

Jason Campbell: Okay. I'm glad you pointed out work time beverage. Yeah. So you know, I'm fairly simple, so I generally would take just a nice cup of coffee. It generally gets me through the morning. Other than that, I'm trying to be a good boy and stay hydrated, and that is water. I try to stay away from the soda machine if I can.

Ed Rush: Well, we're going to give you a BOGO today, buy one, get one. We have to have both readily available.

Jason Campbell: That sounds delicious.

Ed Rush: So here's a coffee.

Jason Campbell: Fantastic. All right. I'm cheap.

Ed Rush: And a bottle of water.

Jason Campbell: Excellent, excellent. Thank you.

Ed Rush: No challenge in that regard today.

But Jason, let's get on point here. Supply Chain Management, how it applies to our industry. Gosh. You know, it's a dynamic industry. The one thing you can count on is change. Not a ton of predictability when it comes into daily supply and demand signals.

Jason Campbell: Right.

Ed Rush: So how are we addressing the unique challenges for the heavy building materials for supply chain folks?

Jason Campbell: Well, so one thing about our industry, and we for the past several, several years, we focused on the outbound, right? It's getting the material in the mixture truck, getting the mixture truck out the gat and get it to the jobsite, mostly on time. Right?

So our challenge is if we're focusing on the outbound, we have teams set up to manage this. We have central dispatch team, we have folks at the plants. We have an entire process surrounding visibility, being able to what's going on at all times, knowing when the truck leaves, knowing when the truck gets there, knowing when he comes back. And when he comes back in the yard, we probably have a pretty good idea of where he's going to go next, because it's on the screen in front of us.

So a lot of our focus of managing that part of the supply chain has been on the downstream supply. Our challenge is when you look back upstream. We haven't put that same focus on the upstream, and that is getting the raw materials to the plant.

So you've got a situation where you have a Ready Mix dispatch demand being managed for the most part fairly well when it comes to visibility, but then when it comes to getting the material to the plant, we're still doing it sometimes decentralized. We don't have quite the same tools that we have to get the concrete to the job site.

So I think that's a real problem, because those contractors change their mind. We're trying to stay on top of it and try to anticipate what they're going to need. Doing that from a mixer standpoint when you have visibility into the process is a little bit easier. When you get back to the getting the raw materials there and you don't have any visibility into that downstream demand change, that's where the challenge comes in.

Ed Rush: What key points, then, are we focusing in on to change that dynamic?

Jason Campbell: Well, so ... and this is going to sound kind of overly simple, but really what we need to do is we need to open up that visibility. In my view, if I'm deciding we're going to put a load of cement, there's two things I need to realize. So I want that cement to go where we just used the cement, or do I what that cement where we're going to need that cement? It's two different questions, right?

It boils down to replenishment via consumption. "I uses the 25 tons, so I'm going to replace it with 25 tons," or replenish it by demand. And when you start thinking of it that way, you'll be amazed at how much more efficient we can get with our trucks, either if we own the trucks ourselves or if we're using outside hauling, getting the right material at the right place at the right time, I think we're going to be able to see these processes getting much more efficient. And we're going to be able to cut out the waste.

Ed Rush: Well, I wouldn't diminish visibility, really. You can't control what you can't see.

Jason Campbell: Right.

Ed Rush: Can't make decisions if you don't have the data and the insights in order to make better decisions, and that pivot I think is fundamental when you're talking about replenishment by demand.

Jason Campbell: Well, and I'll add, one thing I'll say of it now, I worked in Ready Mix dispatch for a long time, and you can argue that that's one of the toughest environments in our industry. And one thing I'll say about Ready Mix dispatch is that it's never perfect, but you pretty much know what's going on at all times. I always say that when someone walks into a Ready Mix office, if the question is, "How are we doing today?" You're going to Ready Mix dispatch, and that's where you're going to get the answer to that question.

So one thing we can get to visibility is, the visibility that we enjoyed on the downstream side, if we can open that up, get that visibility back upstream ... so if I'm deciding on where to put a load of raw material, you need to ask yourself, "Where does that need to go?" It needs to go where you need it.

And the answer to the question is where do you need it is, "Where's the concrete?" Because a yard of concrete equals so much cement, so much rock, so much sand. We want to break that down and pull that into demand for upstream, as well.

Ed Rush: So you're a product manager over Supply Connect?

Jason Campbell: Yes.

Ed Rush: That's our solution for supply chain management?

Jason Campbell: Yes. So this product has really been in development, and I think Command Alkon's been thinking about this product for long time. And I think there's definitely a demand for something like this.

It's ironic. I actually came from the business and I used to do some of this for a living, so I kind of know the frustration trying to make sure that trucks are to the right spot at the right time in the right location. So now Supply Connect has gone through many iterations, and it's ready for market. And so some of the things that we wanted to make sure that Supply Connect could do is what we're willing to to is, "Hey." I'll use a producer for example. "You have so much cubic yard scheduled, right, and so this earlier cubic yards equals so much cement, so much rock, so much sand."

We work time take an hourly snapshot of that demand. We want to pull that out and we want to put that on top of our inventories. And with Supply Connect, what we're trying to do is we're trying to show a realtime view into your inventories, which you actually have on hand, and then we want to overlay that with your demand, right? We to forecast your inventory usage over a certain amount of time.

If you have that information in front of you, you can make a smarter decision, you can make a quicker decision, on what to do with your trucks. It sounds really, really simple, but it's something that we've really been lacking for years in this industry.

And so what we're wanting to do is, if I were to ask a question, Plant A, B, C, how long is the material going to last tomorrow, I can't answer that question now. I can kind of take a guess at it. With something like Supply Connect, I can tell you exactly how long it's going to last. And in 30 minutes when all the orders change for tomorrow, I can tell you that that time is changed, right?

If you know that information, now you have a foundation to where you can make better decisions with either your trucks, your materials, or your schedule. And that's either if you're scheduling third-party trucks or if you have internal trucks. You've got to get the information to where you can make a quicker decision.

Ed Rush: What does that experience look like or feel like for the users of the solution? What's that interface logic so that people are equipped with realtime information they manage by exception, make better decisions for their business faster? How do you present that in a way that truly is simple and easy to respond to?

Jason Campbell: So what it looks like is you want all the information in one place, right? I want to see all of my plants, and I want to see the status of all my plants in one place in realtime, and as they change, I want to see it. So if I'm trying to keep track of demand for 20 different plants, I don't want to make 20 different phone calls. I don't want to take information from 20 different people, and maybe, if I'm real good, put it in a spreadsheet. I want an easy to read web page, for example, right in front of me, changing in realtime. So that's one thing that we have with Supply Connect is we have everything in front of you so you can see it as a change.

And the other side of that is I want to ... really, the question is what do I have at my plant, right? That's the inventory question. That's really not the question we're trying to answer. The question we're trying to answer is, "What do I need at every plant?" Now, you have to know what the inventory is to give you that answer.

But I also want to see the real-time demand change, and I want to see the forecasted demand for tomorrow and how it impacts my plants. If I prioritize those plants, I can take my top few that I really need to focus on and not worry about the other ones that have plenty of material, and I put quotations around, "Plenty of material," because the answer to that really is based on your demand.

I could have a plant that has low demand for the next four days and it's got plenty of inventory. I don't have to worry about it. So let's put that one aside and let's focus on the exceptions. So what this solution looks like is everything all in one place. I can see it change in realtime, and it allows me to be much quicker, much quicker and much more accurate.

Ed Rush: You bring up a great point. It's one thing if you're dealing with one plant, one inbound flow, one outbound flow. But having that realtime information across the entire multi-sited enterprise where you're able to do a collection of decisions from one person in one central point in order for the betterment of the entire operation, that seems pretty powerful in an of itself.

Jason Campbell: Oh, indeed. A lot of areas tried this now without the visibility, and it's tough. I used to try to do it some myself. And we would print every port and I'd say, "Hey, I've got it here, it's actually in command. It's called the Material Requirements Report." And I can see exactly how much material is needed per hour tomorrow. The problem is, once that report gets printed, everything's changed, right? So they're going to have to print it again.

What this does, I call this a live material requirements report, and it changes as the day changes. And so I've seen a couple of examples of where we had this out in some alphasides where you might hear a plant say, "Hey, this canceled. I need to move this around." And then the user says, "Yeah, I already knew that. I've already made adjustments."

That's very powerful. If you can be that proactive and have that much information at your fingertips, the decisions and the speed of which we can make decisions is ... it's much better for everyone, and it's amazing the impact this has on your entire business.

Ed Rush: So we're excited about this being one of the newer products in the Command Alkon portfolio. However, it's not entirely new. We have folks using it today.

Jason Campbell: Yes.

Ed Rush: And so what are some of the experience from our current customers with the product, and ultimately, what's it translating to for their businesses?

Jason Campbell: Yeah. So we do have a couple. We have one. It's funny. And he does for multiple plant sites in one location, and it would take him all afternoon to coordinate calling plants, which are inventory, okay, let me pull up the requirements report, let me put this together. It would take him all afternoon to get that done. And he said, "Man, I can do this in about 45 minutes now."

That's very powerful, when you think of what you could ... because we're all busy. It's a good thing. I mean, I think demand for the heavy building material industry is strong and it's going to remain strong. And at the same time, we have some challenges ahead of us. We have some constraints, namely trucking, right?

So if we spend all of our time trying to coordinate these materials and coordinate the demand, we may be missing out. And they were talking about a gentleman that can use his time on other things once the plan is done.

Another thing is, you look at vendo-managed inventory applications. We talk about cement and rock and sand. Let's talk about admixtures.

So we have a customer that basically said, "You know what? We've been having some challenges." So ad makes your companies ... generally everything's an emergency, right? You never hear about your admixture until you're almost out. You better do something. Either that, or you've got everything chock-full year round, and that gets expensive, as well.

Well, we had a customer that decided, "You know what? I've run out of admixtures a couple of times. I'm usually turning this over to the supplier. He's driving around and he's checking tanks and he's doing all the things that suppliers do, but now he can actually see what's on hand and he can see, more importantly, what he needs to have them run out of admixture sense."

And the admixture, the vendor likes it, because now I can be more efficient with my time. And it's funny, I kind of told the story of cement, but the same thing applied to Admix. We had a plant manager call and say, "Hey, I'm getting a little low on Admix." "Okay, well, let me call my admixture guy."

And I was actually sitting in his office when he did it, and he called the admixture guy. The admixture guy's answer was, "Yeah, I know, I'm already on top of it. Your delivery's set for tomorrow." Right?

Ed Rush: Wow.

Jason Campbell: So now you're taking time out of this process that has really crippled us for a long time, and I think that once this information starts flowing and everybody can have access to it, everyone benefits.

Ed Rush: Those wild moments just like you described, they're almost priceless in some respects.

Jason Campbell: Absolutely.

Ed Rush: Can we get a sneak peek into what's next?

Jason Campbell: Yeah. So the next step is, now let's talk back to Supply Connect. When that material truck is loaded, let's let the guy at the plant know automatically that it's loaded. Here it comes, right? Let's be able to anticipate when that load's going to be there so we can plan our materials. Let's kick that back into some of the back-end financial parts of what we do every day.

So the back-end integration, this is coming. We've already made progress on that. We're working really hard on that. But I think what you're going to see very shortly is we're totally going to close this loop, and everything's going to flow and everything is going to be connected, and we're going to make it work out for everyone.

So yeah, I'm really excited about the next steps. This is very important, what we've done so far.

Ed Rush: Real time continues.

Jason Campbell: Yeah.

Ed Rush: A greater scope of visibility, as well?

Jason Campbell: Absolutely.

Ed Rush: Well, I see, Jason, you've finished up your coffee.

Jason Campbell: I did, yes.

Ed Rush: You want to go?

Jason Campbell: No. I definitely want to eat more coffee today.

Ed Rush: Well, water's free, so enjoy that on your ride home.

Jason Campbell: Fantastic.

Ed Rush: And I appreciate you taking the time to be on Building Over Beverages. Thank you, Jason Campbell, product manager, Supply Chain at Command Alkon.

Jason Campbell: Thank you. Appreciate it.

 


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