Modernizing the business of ready-mix, part 3 of 3.
Running a ready-mix concrete operation is tough. Pat yourself on the back for exactly three seconds. Now for the crushing reality: Running a concrete construction operation is just as tough, if not more.
Let’s spend some time in our customers’ shoes (see sidebar). Think about what we can do to make their lives easier, and perhaps they will reward us with more volume or even better pricing power. Our objective is to transform the customer from the pain of now to a better future. Paraphrasing James Carville, the Clinton presidential campaign manager in 1992: “It’s the
economy smartphone, stupid!” Find software that allows your customers to do business with you on their smartphone, and do it now.
A DAY IN THE LIFE OF A CONCRETE CONTRACTOR
Office: A white pickup truck, dirty and a bit dented with the dashboard covered with papers, old food wrappers and coffee cups.
Starting time: Zero dark thirty.
Customer: Disorganized, distracted and dismissive … “Hey you, concrete contractor! It’s your problem, take care of it.”
Crews: Hardworking, short on English and better get paid cash at the end of the day or they will move on.
Concrete supplier: Gives the bigger customers better service … hard to get through to dispatch when needed. The contractor worries that the price is too high, the load will be late or they’ll short the load.
Most small and some midsize customers have a standing project for which they call off daily orders. If a new opportunity requires a dedicated project with special terms, they need to contact sales and get a quote. Most small customers have no idea who their salesperson is; they call dispatch.
Instead, use the smartphone. Once the iOS or Android software configured to the producer is downloaded, the customer can request a quote. They are guided through the process and choose a range of options and can enter comments. Once submitted, it is reviewed by the inside sales team, altered and returned for acceptance.
One huge benefit for the producer is the smartphone notifies the customer to positively accept the quote. Only then can the quote be formally converted to a project. This removes the headache of a quote being sent, and one fine day the customer calling to ship on it even though they never accepted it.
Orders placed by phone take time, and often the preferred dispatcher or allocator is not readily available. When a customer “remembers” they need an order for the next day or must make a change and it’s after working hours, they have to wait until dispatch resumes in the morning. Orders placed or changed within hours of shipment often do not get the best service.
Instead, use the smartphone. The customer can locate a specific project, their standing project or use their specific pricing to request an order or make a change during the fulfillment. Dispatch staff can review the request, make any needed changes, and return for confirmation. Many producers are now initiating a rotating schedule for dispatch to cover customer requests 24/7 to provide the best possible service.
Onsite load receipts are a distraction. Often the customer is a “player-coach” and provides critical direction to his hardworking, but perhaps less than managerial-savvy finishing crew. The customer just wants the truck to show up and unload.
Use the smartphone. During fulfillment, the customer can see in real time the exact truck status including loads, location, product and progress. The customer knows the exact load size, with no doubt. Tickets can be automatically receipted either one by one or for the entire order, and all load information is immediately available.
The chain of custody to various stakeholders is critical. In the past, it required paper tickets to be photocopied or scanned and painstakingly distributed by a back office to perhaps as many as eight additional parties. With a smartphone, the customer can forward a ticket or all tickets on an order to any stakeholder in seconds.
Billing, OMG! Pricing, load size, adders, waiting time, diversions, taxation and that nasty bump load: Confirming bills are correct is a huge time sink for the customer. Misunderstandings and sometimes plain old mistakes result in lengthy disputes that steal time from making money.
Use the smartphone. The customer has immediate access to statements, invoices, the tickets that compose the invoice and the full delivery detail for each ticket. Some customers are even given access to complete batch weights. Immediate access to information kills most disputes before they are started. The remaining issues can be quickly identified and resolved.
Concrete finishers have a tough time managing cash flow so, in part, they use the ready-mix producer as a bank. That’s a hard reality. However, making the payment process easier will chip away at the days sales outstanding. One company, BASYS Processing (basyspro.com), specializes in credit, debit and ACH payments specifically for the ready-mix concrete industry. Modern mobile tools can incorporate the “pay now” button right on the phone.
BUILDING A BETTER CONTRACTOR
Concrete finishers are really good at, well, finishing concrete. Sometimes they are not so good at the fundamentals of business and operational management. They often need help.
Consider the cost of using a tape measure incorrectly. On a five-load, 40-cubic-yard order at around $1,000 per load, adding a 4-cubic-yard bump load at the end is costly. Instead of increasing costs by 10 percent, its more like 25 percent when the idle time of the finishing crew is considered while a truck is found—plus the short load charges.
Handheld mobile tools not only provide real-time information, but also long-term analytics of every aspect of the concrete finisher’s interaction with the ready-mix producer. The ready-mix sales staff can transition from bringing doughnuts to the jobsite to bringing actionable insight to the finisher for improved profits.
The most important part of modernizing ready-mix concrete operations is modernizing the customers. Producers can and will do this by compressing time and removing business friction through modern, mobile tools. Voltaire (François-Marie Arouet) perhaps said it best for our industry as “Life is a shipwreck, but we must not forget to sing in the lifeboats.” While concrete finishers will continue to face a difficult path, at least the interaction with the producer can be made simple and straightforward. Most likely, the contractor will reward the least-hassle producer with their business.
Craig Yeack has held leadership positions with both construction materials producers and software providers. He is co-founder of BCMI Corp. (the Bulk Construction Materials Initiative), which is dedicated to reinventing the construction materials business with modern mobile and cloud-based tools. His Tech Talk column—named best column by the Construction Media Alliance in 2018—focuses on concise, actionable ideas to improve financial performance for ready-mix producers. He can be reached at Craig[email protected]