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Technology often helps concrete producers enact small changes that make a big impact. This Tech Talk column examines real-life ROI (return on investment) for reducing the expense of cancelled loads. The data is from real producers using technology to improve performance. This article uses fictional company financials.

Identifying Lose-Lose

WW Ready Mix has undertaken a program named “Velcro” to make its customer relationships stickier. The goal is to provide products and services that are either not offered by competitors or make it difficult to switch producers. WW anticipates Velcro will increase volumes at market prices for residential and non-bid commercial work.

WW’s logistics manager determined 602,410 loads were issued in 2017 and 4,584 (0.761%) were cancelled. The result: $3.6 million was wasted, regardless of who paid. Customers paid for approximately 75% of the loads, creating a classic “lose-lose” situation.

Creating Win-Win

The logistics manager took steps to reduce cancelled loads, using features of the company’s new dispatch system. First, she set up an alert for immediate notification of any cancelled load. She then interviewed the WW staff involved, the crew leaders and the parties responsible for payment. The information was shocking.

Loads were most commonly cancelled when customers overlooked active orders scheduled for the next day (31%). Their crews failed to prep the site - or worse, did not show up. By the time the customer realized the mistake and cancelled the order, several loads were en-route.

The second most common reasons were customers over-estimating but failing to release unneeded loads, tied with dispatch error (each at 22%). Dispatchers tried to save phone time with customers by finding a similar past order, copying, and intending to go back later and change the differences. However, rushed by the next call, routinely forgot to change key details and sent incorrect loads.

Failed material properties most often resulted from transport delays (17%). Concrete age and temperature were the most significant, closely followed by failed slump and air content.

The remaining reasons varied (8%); notably, failed inspections on columns or footers, and crew leaders inappropriately requesting unapproved admixtures for controlled pours such as bridge decks or high-rise buildings.

Armed with this enlightening data, WW’s logistics manager established a better business process, supported by the dispatch system. At the end of every day, each customer now gets a report or notification of their next day’s active orders. Dispatchers have stopped the practice of creating a new order from a copy of an old order. The logistics manager has also configured the system to prevent certain changes to controlled pours, such as adding accelerators. Finally, customers now have access to real-time order information on their phones, enabling quicker cancellation of unneeded loads.

Economic impact
WW’s logistics manager reduced cancelled loads from 0.76% to 0.25%. Over the course of 2018 this will save $2.4M, of which about $1.8M directly will reduce the customers’ bills. Eleven large customers accounted for $1.1M, or an average of $100K each, which was directly returned to each company’s bottom line. WW put money back in customers’ pockets, and that sticks better than Velcro.