Technology often helps concrete producers enact small changes that make a big impact. This Tech Talk column is the first in a series of ROI (return on investment) case studies. We'll share scenarios from real producers using technology to improve performance. Each case study will include an economic impact summary and, to protect financial information, fictional company financials will be used.
Time for a change
WW Ready Mix is a fictional producer of concrete, aggregate and cement. The producer values its drivers as a critical link to customers. However, WW’s driver labor expense per cubic yard delivered is higher than its competitors’.
This is partly by design. WW provides better pay and benefits to attract and retain the best drivers. Without reducing the positive impact of the wages and benefits, the producer took a serious look at how to reduce driver expense.
The average fully burdened driver pay is $0.67 per minute, and will certainly increase soon in the current market. In 2017, WW shipped 5 million cubic yards, averaging 8.9 cubic yards per load, and 3.2 loads per truck-day for a total of 175,546 first loads.
The producer looked closely at the paid time between driver check-in and the start of their first loads of the day. WW found this gap to be an average of 21 minutes per driver, per day. Through industry norms and time studies, the producer determined 15 minutes should be sufficient. However, due to union labor rules, little could be done to change driver behavior at some of the plants.
Every minute counts
With communication and truck signaling technology, WW is reducing driver clock-in to first load time. The producer sends clock-in times to drivers on their mobile phones when the next day’s schedule is set. If the schedule changes overnight, any updates to clock-in times are sent to each driver an hour before the originally scheduled start time, or the new start time, whichever is first.
A restriction was programmed into the clock-in program integrated with the GPS tracking and signaling system in WW’s trucks. The restriction prevents drivers from clocking in more than 15 minutes before a scheduled first load. Drivers can arrive as early as they wish, to communicate with other drivers, get ready for the day, etc. However, now they will only be paid for 15 minutes prior to their first load (where permitted by contract).
In 2017, WW reduced the average time from clock-in to first load by three minutes (from 21 to 18). Although this was only half of the goal, mainly due to union contract restrictions, the producer realized a bottom line savings of $353,791, which represents 0.72% growth of EBITDA.