BY JOEL M. UNGAR
STONEHENGE CONCRETE & GRAVEL
A Stonehenge Concrete & Gravel ready-mix truck pours concrete for a skateboard
park for teenagers putting their bodies on the line in Richmond, Ind. Stonehenge uses
several factors to establish delivery intervals.
f you ask 100 different producers what
guidelines or rules of thumbs they use in
establishing delivery intervals, you’re likely
to get 100 different answers. Ask these same
100 producers, “How long should it take?”
and you are likely to get the same answer:
“It depends.”
For measuring the overall efficiency
of a delivery operation, cubic yards delivered per driver hour is still their best measure of efficiency, says Tim Green, ready mix
operations manager with Hanson Aggregates in the Phoenix area.
Using information from their Jonel
dispatch system and their time clocks, Hanson is able to track yards per hour on a per
plant basis and a per driver basis. Using a
benchmark of 3.5 yards per hour, Green
and his team can quickly pinpoint problem areas as they develop.
When it comes to establishing delivery intervals, Green says they consider many
factors—delivery distance, expected loading and washout times, their history with
I
How Long
Should it Take?
There are different guidelines in establishing concrete delivery intervals.
a truck from North Milwaukee to Madison for just one load.”
M&M uses its truck tracking system
to give information for scheduling deliveries. The producer uses an active statusing system that interfaces with its dispatch
system. From this, they are able to focus
on several factors that influence their scheduling, including average delivery time by
specific contractor, average pour time, and
average washout time.
Perhaps most importantly, M&M shares
information gleaned from this process with
their salesmen. This allows the salesmen
to learn which customers are more profitable, and who holds their trucks and who
doesn’t. “This gives the salesmen more insight on which jobs to bid and how to price
them,” says Horsman.
The daily activity report is a customizable snapshot of key production information for
a given day. The report highlights the two largest jobs for a specific day, but can be
adjusted to show only one, any desired number, or every job per location. The gray
section shows key daily totals and also calculates important benchmarks like average
load and yards per hour. The report uses Open DataBase Connectivity (ODBC) to dispatch, and time clock systems as its source data and Crystal Reports as a report
writer. This report also shows average delivery time for the day as an indicator of
delivery efficiency.
the customer, and yards ordered per hour.
Green has nine locations and 12 plants, enabling Hanson to keep delivery distance down
and more tightly control delivery schedules.
Truth in scheduling
Stonehenge Concrete & Gravel in
Richmond, Ind., continues to struggle with
determining optimal delivery intervals. “You
always tend to be overoptimistic when
scheduling an order,” says Matt Jetmore,
president of Stonehenge. “For example,
when you schedule a bridge pour, you generally think that a bridge deck is going to
pour out fast. But you have to remember
to factor in testing and other factors that
tend to slow you down. We’ve also found
that using five minutes per yard tends not
to be a reliable indicator on smaller jobs.”
Unlike Hanson in Phoenix, Jetmore’s
three plants are in smaller, mostly rural markets in eastern Indiana. While delivery areas
do have some overlap, Stonehenge doesn’t
have the flexibility that Hanson has. To
counteract this, Stonehenge uses several
factors to establish its delivery intervals, including mix, expected average load size, job
type, delivery distance, truck availability,
and customer history.
Jetmore also finds that the bigger the
load, the quicker it pours out. “The bigger
loads generally go to customers who are
better able to process the load,” he says.
“The smaller loads may go to homeowners
trying to do the job themselves and they
aren’t able to take the concrete off the
truck that quickly.”
M&M Concrete in Wisconsin has one
plant in North Milwaukee, and two each
in Madison and Fox Valley. This gives director of operations Tom Horsman a different set of challenges compared with
Green at Hanson and Jetmore at Stonehenge. “We can look at our schedules and
see if we need to move a truck from one
market to another,” says Horsman. “But
because each of our markets is about 70
miles apart, it doesn’t make sense to send
Two types of costs
While the operational statistics are
all-important guidelines, Green, Jetmore,
and Horsman agree that delivery costs
also factor into the equation. Producers
face two basic types of delivery costs—
variable and fixed.
Variable delivery costs result from delivering a load of concrete; you wouldn’t
have to pay these costs if there wasn’t a
delivery. Usually the largest variable delivery cost is driver wages and fringe benefits. These are generally predictable; you
know what your drivers make per hour.
Repair and maintenance is usually variable, as this cost often moves with volume
levels. Producers need to consider mechanic
wages and fringe benefits, inside and outside repair costs, lubricants, and similar
costs related to their fleet.
Fuel costs have risen dramatically
throughout the United States this year. This
is a variable cost, but the unpredictability
of fuel costs can make this a difficult factor to consider.
When fuel costs $1.50 per gallon, you
average 6 miles to the gallon, and you have
a 20-mile round trip, your fuel cost is $5.00.
If gas prices increase 20% to $1.80 per gallon, your fuel cost rises is $6.00. The additional $1.00 may not seem like much,
but it can take a big bite out of what may
already be a tight margin on the job.
M&M CONCRETE
M&M ready-mix
trucks wait for concrete in Neenah,
Wis. The producer
has a truck tracking
system to help
accurately schedule
deliveries.
Fixed delivery costs do not vary with
volume. Fleet depreciation and lease payments are usually the largest fixed costs.
Included in this category are dispatch salaries
and fringe benefits, fleet insurance, truck
tracking, two-way radio, and miscellaneous
delivery costs. Fixed delivery costs can usually be reasonably estimated and a cost--
per-cubic yard can then be determined.
Establishing guidelines for concrete
delivery intervals is subject to many variables, as the three different producers illustrate. Knowing the job type, delivery
distance, and customer history will usually
give you a good idea on how to establish
your delivery schedule. And keep an eye
on yards per hour on both a per location
and per driver basis, as this continues to
be one of the most important indicators
influencing delivery efficiency. TCP
JOEL M. UNGAR is president of Concrete Accounting, Bloomfield, Mich. E-mail
him at [email protected].
Publication #J04H045, Copyright © 2004 Hanley Wood, LLC. All rights reserved