The association’s latest task group champions the latest advances in technology.
By Craig Yeack
Once upon a time, the winners and losers in our industry were separated mainly by one thing: pricing power. Be it through consolidation, vertical integration, or just being a superior operator, pricing power is an economic term that describes a company’s ability to raise prices without reducing demand for its product. Companies with strong pricing power typically have a larger spread between selling price and costs than their competition.
In an upturn with high demand, like today’s environment, everybody makes money. In a downturn, pricing power not only wins, but it empowers the winners to buy the less fortunate companies, often at a bargain. Rest assured, the importance of pricing power remains, but now the landscape is making room for a significant new impact: technology.
While the smartphone came on the scene around 2008, the benefits have only become tangible to our industry since around 2015. Now with more amenable internal systems operating on modern information technology (IT) architecture and a pronounced younger workforce, both internal and as customers, times have changed.
THE HASSLE METRIC
Pricing power is and will remain king. But now, being the least hassle supplier (LHS) significantly impacts which producer gets more volume in competitive markets. An LHS supplier guarantees a desired level of service and often uses technology to make transactions easier for customers. This matters very much in today’s market, and it may be the key to survival in down markets.
Enter the National Ready Mixed Concrete Association’s citizen volunteers. Ken Cook, vice president of Finance at Ozinga Bros. Inc., is chair of the NRMCA Financial Performance Improvement Group. His group has asked Luis Angulo, chief information officer of CalPortland Co., Ozinga counterpart Keith Onchuck, and a host of others to establish the Digital Transformation and Process Improvement Task Group—also called the IT task group.
The goal of the IT task group is to promote advances for new things like eTicketing/eSignature, online order requests and the host of activities that make up the IT backbone of a modern materials producer. Smartly, they launched their initiative with an industrywide anonymous survey, which will be followed by numerous online and in-person meetings in the near future.
Both CalPortland and Ozinga have for decades embraced vertical integration and operational efficiency. CalPortland was an early pioneer in developing its own internal systems for quote-to-cash, including truck tracking. Ozinga has relentlessly supported best-in-class development and IT systems. Both have oodles of data on the good, the bad and the ugly of IT in our industry.
At the recent NRMCA Convention in San Antonio, the Digital Transformation and Process Improvement Task Group held a session that was so popular it filled every seat in the room. Not only that, but an equal number of people stood both inside and at the entrance to the room. The task force dug into the preliminary results of the survey and painted a factual picture of IT across domestic producers.
You will have questions. Being CIOs, both Angulo and Onchuck have huge targets on their backs; they are easy to find at their respective day jobs at CalPortland and Ozinga to get answers. Alternatively, you also can reach out to NRMCA’s Andrew Tyrrell, task force liaison.
Right now, we’re in an up market. Despite labor and material shortages, profits are generally good—and by extension, life is good. But times change. Let’s call investing a few hours of your time to plug into this group—through taking the survey and subsequent networking—risk mitigation. Rest assured, even Ben Franklin would agree that an ounce of prevention will definitely be worth a cubic yard of cure.
Be sure to give a shoutout to NRMCA, an organization that has, is and will continue to represent innumerable interests of our industry.
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 [email protected]