Profits Are Being Eaten Away – How Can I Eliminate Waste?
Ready mix production is a complex process with many variables and moving parts in an industry that struggles to find and retain skilled workers. Even the best and most knowledgeable members of your production staff have a limit to the impact they can have on the effectiveness of your production processes. If your current operations still rely on manual, semi-manual, or unreliable production processes then you can easily be bleeding profits related to material waste, product quality, and the cost of labor and time.
First consider material costs and waste. On average 50 – 70% of a producer’s costs are tied up in raw materials in markets around the globe, so inaccurate and inefficient production processes that waste materials quickly eat away at your margins. Manual batching or lack of confidence in existing batching processes forces many producers to overdesign to ensure product quality. For a 50,000 cy operation overbatching by 1% alone means you are basically giving away 500 cy of concrete. At an average selling price of $100/cy that equates to $50K annually lost revenue from a 1% overdesign factor.
Material losses also occur from production of poor or out of spec products that result in rejected loads. Making production and quality decisions based on inaccurate information, double dosing, leaving out ingredients, poor process controls – these are scenarios that occur far too often and can deem your delivered product unusable. The resulting poor customer service can take a bite out of your bottom line and can ruin your reputation.
Assume you have only 1% of your loads from a particular plant rejected. For a 50,000 cy plant that would be around 62 loads at a cost of say $52/cy in materials equating to close to $26K for most markets with an average of 8cy loads. This captures losses in material costs alone for rejected loads, not including time wasted managing such loads and any needed clean-up efforts.
How Can I Batch with Unmatched Speed and Accuracy?
Shifting from materials to time and labor, consider how the speed of your production cycle and your ability or inability to proactively manage and react to plant maintenance and plant down scenarios contribute to waste at your operations.
Generally speaking, producers strive for around 4-minute cycle times for their production process in a dry batch plant. If you lack information needed to keep your plant maintained and performing optimally and are regularly battling maintenance issues that bump your cycle times up to 5 minutes or even more, you are quickly eating away at the number of loads you can be deliver during peak hours of the day by almost 30%. In the end these load times effect batch tolerances that impact the quality of your concrete as well.
In dire situations where your plant is down, how quickly can you recover? Plant down time of any amount can impact the balance of your day, force rerouting of trucks, snowball into late deliveries, and drive volume into competitor plants. Also, many producers only consider how plant down situations cost them money at that moment but undervalue the higher-level effect on their reputation.
The impact of all of these different scenarios and inefficiencies, however large or small they are on their own, cumulatively can have a massive impact on your profits, your reputation, and your ability to sustain and grow your business.
Empower Yourself Through the Batching Process and Capture True Profitability
Volume is not always a true indicator of success, and gaps in information flow from production through to ERP can make it difficult to understand where inefficiency and hidden costs are cutting into your profitability. The ability to track weights, inventory, round trip times, and man hours can provide a true picture of profitability and success that allow you to push your operations to the next level. Enter COMMANDbatch, the industry leading production automation system designed specifically for the ready mix concrete producer.
With over 40 years of industry expertise and unmatched commitment to customer support, Command Alkon’s COMMANDbatch leads the industry in innovation and reliability. The batching control system and plant automation products are recognized worldwide for helping producers achieve operational efficiency, quality, time savings, and profitability based on their specific needs. The accuracy and speed of COMMANDbatch ensures superior quality and delivers material and time savings that are unmatched by any other system.