The U.S. Ready Mix Industry: It’s still a great place to be

In a shifting landscape, producers and technology are evolving

By Craig Yeack

Craig Yeack explains how “Covid broke paper,” during the World of Concrete 360 Virtual Industry Forum. A recording of the early-February session, “The Impact of Technology in the Concrete Industry,” is available through the end of this month and can be accessed through the Virtual Industry Forum portal at the home page ofwww.woc360.com.

Congratulations. You are a key part of the industry enabling nothing less than the infrastructure of modern society. Our people work hard, form the backbone of the middle class, and support our local communities. These things have not changed over the past year of turmoil and pandemic life.

However, the ways in which we manage our businesses, measure success, and work with customers have changed significantly; most notably to “e-working.” Remote work arrangements have propelled producers and contractors toward electronic communications and processes even faster than they already were. Let’s take a look at more “e-trends” we can expect in the coming year.

ELECTRONIC COMMUNICATION
Electronic ticketing, or “e-ticketing,” has taken the lid off the digital enterprise jar: Paper is a dead man walking. To be sure, the majority of tickets, invoices and statements are still on paper, or at least emailed and printed. It’s only a matter of time, measured in months, until the majority of our customers demand electronic documents. Documents are immediate. Documents are convenient to store, retrieve and share. Documents can go anywhere, anytime.

Electronic documents will have a few stumbles. Oscar Wilde famously quipped, “Experience is simply the name we give our mistakes.” The e-ticketing experience clearly illustrates the need to grow through complicated chain-of-custody management and driving out single points of technological failure associated with SMS and email. But steel yourself, electronic documentation is here to stay.

ECONOMIES OF OPERATION
Economically, truck tracking and modern dispatch systems will change how customers pay. These systems reliably know exactly what was on the truck and how long it was at the jobsite. By default, the charges for that ticket can be accurately calculated greater than 80 percent of the time and the changes for the other 20 percent of tickets are usually small and can be covered by a “reconciliation” at the end of the day. The path to immediate per-transaction billing is clear.

Our customers will not want to let go of working capital by paying quickly. As one industry chief financial officer recently told me, the transition is more about art than technology. Being the bank for our customers can cost in the neighborhood of 50¢ per cubic yard. That’s right, you spend about 0.5 percent of your gross revenue financing your customer’s working capital, let alone the cost of short pays and disputes.

We want to stop being the bank. To do this in the coming year, your customers must be able to connect the dots to increased profit. They must compress the time, improve the accuracy, and provide certified delivery proof to their customers. Sharing a little bit of the savings via product pricing will help as well.

ENVIRONMENTAL BENEFITS
Environmentally, the hard truth is we absolutely must have modern infrastructure. Concrete plays the key material role, and definitely leaves a carbon footprint. We also love our families, friends and communities, and want future generations to thrive in a healthy world. The coming months will see much more activity devoted to environmental balance.

我们的行业领先的精神的方式ahatma Gandhi: “Be the change that you wish to see in the world.” A growing number of producers are aggressively pursuing a reduced carbon footprint in batching, advocating mixes with longer durability, and reducing the impact and expense of transport with compressed natural gas fuel. Producers are doing this in advance of broad-based demand, trusting that the example will nudge their customers to do the right thing and support a lighter carbon footprint.

同样,一个快速增长的数量的基础设施owners are demanding a lower carbon footprint during construction. The requirement encourages producers already committed to the change, and forces even more to adapt. An evolving, balanced approach to the needs of infrastructure and environment will change the products we make, how we make them, and how we transport to the job site.

ENLIGHTENMENT IS COMING
Customers are demanding change, sometimes gracefully and sometimes like an angry mob. Producers are being forced to rethink core business processes and adapt. Over the next 12 to 18 months, most producers, who already work hard, long days in often hazardous conditions, will need to at least start the journey to fundamentally change the business of the business toward digitization.

A wise man named James Thurber said, “There are two kinds of light—the glow that illuminates, and the glare that obscures.” Over the next year we can embrace the glow of progress by connecting the dots for our customers on how to harness the profitability of new, digital tools and processes. Will this fulfill the digital dream? No, but we will make a big down payment.


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].