Crushing Competition: 5 Ways Companies are Leading Through Digital Change

The mining, construction, and aggregate industries are among the least digitized industries, but it won’t be that way for long. These industries are in a full sprint towards digital transformation in order to harness incredible efficiencies and remain competitive, but the benefits can extend far beyond efficiency. Leadership teams are hyper-focused on leveraging technology to prevent problems before they start, to mitigate risk, and improve relationships both externally and internally.

From reducing paper and eliminating error-prone manual data entry to digitizing the measurement of stockpiles of inventory, bulk material companies are uncovering areas of opportunity within the core functions of their businesses. In this article, we are going to discuss 5 ways companies are embracing digital change and are crushing their competition.

1. Leading in Innovation and Forward Thinking Through Digitization

Leaders who embrace technology and are willing to invest in making their teams more efficient often build trust and inspire innovation. Employees who identify areas of opportunity and are heard by leadership will feel empowered to be solutions-oriented.  The benefits of embracing forward thinking and innovation can be felt by the company in more ways than one.

From a culture perspective, employees will help leaders identify and solve problems knowing that their thoughts, opinions, and proposed solutions are valued and executed upon. What better way to uncover potentially troublesome areas of a company than from the employees that see the struggles every day?

From a financial perspective, the company will gain valuable insights about the business from the ground level to the executive level. These insights will allow the company to solve problems before they become catastrophic and irreversible, make better and more strategic business decisions, and reallocate resources to revenue-generating tasks, improving efficiency, profitability, and competitiveness.

2. Eliminating Workplace Risk with Digital Toolsets

Digitizing manual tasks, like the measurement of stockpiled materials, can reduce exposure and risk of workplace injury. Climbing over a stockpile for an inconsistent measurement isn’t worth the financial and safety risk it poses. Investing in tools that allow measurements to be taken from afar reduces the overall exposure and risk to the company.

If an employee is injured on a bulk material site, the impact on the company can be debilitating. In a market where finding qualified workers is challenging, a company who experiences a workplace injury will be forced to operate without a valuable employee for a period of time. Not only is a company required to operate leaner, but they are also exposed to a potential lawsuit that could bring the company to its knees. As a result of the accident, the company could be exposed to inspections that impact production and thus, profitability.

Leaders of companies investing in technology and tools to reduce the risk of a workplace injury will ultimately come out ahead against competition due to less production downtime, inspections, and financially fatal lawsuits.

3. Improve Efficiency With Digital Transformation

Bulk material companies are embracing technology and digitally transforming to improve manual and error-prone processes. As a result, these companies are able to crush their competition with improved and newfound efficiencies.

  • Eliminating paper: When businesses rely on paper, efficiency is compromised and productivity is diminished. It takes time and money to process, manage, store, and track paper. In fact, large organizations lose one document every 12 seconds, so important documents may never end up where they were intended to go.
  • Reducing errors: Paperwork is received 25% slower and has 50% more errors than digital tools. Businesses that utilize paper forms and paper documentation are prone to more errors, inconsistencies, and inaccuracies. By switching to mobile and digital software and systems, companies can expect their error rate to drop and their efficiencies to improve
  • Improved access to data in real-time: In order for businesses to run at their optimal efficiency, they need to know exactly what is happening in the field in real time. Since most employees have a mobile phone or tablet, they are able to gather information faster, more accurately and consistently while in the field.
  • Profitability Skyrockets: As manual, error-prone, time-consuming tasks are eliminated, productivity increases. Companies are able to reallocate time to revenue-generating tasks, which means more production, faster deliveries, and larger profit margins.

4. Creating Positive Digital Transparency Across The Company

Acting as a window into various facets of the business, digitalization can provide complete transparency into core functions of the business. Bulk material companies with sites spread across the U.S. and throughout the world need to know what is happening at sites daily instead of waiting for issues to rear their ugly heads at the end of the year.

The most valuable asset that a bulk materials company has is the products it sells. From aggregates and ready-mixed concrete to landscape materials and pulp and paper products, knowing how much inventory is on hand is critical for operations. By automating inventory ordering and monitoring levels digitally, companies can ensure that they are ordering timely inventory and not ordering in excess or duplicative inventory. Ensuring just the right amount of product is on hand when needed makes companies more profitable.

With digitalization, management and operations teams will have more transparency into what is happening from the ground up. From reducing human-error to creating trust between management and boots on the ground, establishing digital tools that improve transparency can positively impact the culture simply by reducing friction.

5. Create Impactful, Long-Term Relationships with Your Digital Partners

When bulk material companies start seeking partners in their quest for digital advancement, look for partners that are deeply invested in bringing greater value to your company, not just in the signing of a contract. Partners that are invested in a long-term relationship and the outcome of the digital advancement efforts are invaluable to the business.

Think about this scenario for a moment. A company partners with a digital advancement company that offers a tool to improve a core function of the business, but they are only interested in selling the tool and not interested in hearing about the application, the implications, or the areas of struggle for the team. Because the company isn’t invested, the partnership fails, budget is wasted, and trust internally is sacrificed unintentionally.

In contrast, the same company partners with a digital advancement company that is invested in a long-term partnership, so much so that they help educate the team on the best practices and use cases for the tool and how it will improve the overall company. They listen to the areas of struggle and opportunity and implement feedback into future developments, and/or recommend another solution that could positively impact the business. Because the digital advancement company is acting as a stakeholder and a partner versus a vendor, the relationship thrives and the bulk materials company continues to digitally advance, improves efficiency and as a result, builds trust throughout the company.

Which partnership sounds better? (It’s a rhetorical question).

The First Step Toward Digitization Starts With How You Track Your Piles

Stockpile Reports may not be able to automate the delivery of your lunch to your desk or job site, but we can help you automate the measurement, management, and tracking of your bulk material stockpile inventory. We act as a deeply invested, long-term partner and want to improve not only the financial aspect of your business but also the way that your company operates from a cultural perspective.

If you are ready to automate your inventory level tracking and inventory ordering systems, contact us and we’d be happy to show you how we believe our tool can help take your company to the next level.

The Hidden Cost of Too Much Inventory

Inventory is viewed as an asset with an assigned value, but too much inventory can hinder profit margins, reduce available cash flow, and end up costing you. As a bulk material (BM) company, it’s important to have the right amount of inventory on hand to meet the market demand, all while avoiding carrying excess inventory.

Excess inventory occurs when a BM company incorrectly orders inventory. If there is more inventory on hand than the market demands or market demands shift dramatically, a BM company could be left with more than they can efficiently sell.

Excess inventory has hidden, and not-so-hidden, costs. At Stockpile Reports, it’s our goal to help BM companies reduce risk and exposure, save time and money, and make inventory processes more precise and consistent. So, what are the costs of excess inventory?

Administrative Costs

We know that there are administrative costs associated with inventory management. From operation costs like rent, utilities, and payroll to inventory tracking and accounting, the buying, selling, transporting, handling and storage of materials is expensive. If BM companies are spending additional dollars on tracking and storing excess inventory, they are taking away from other revenue generating opportunities.

Reduces Available Cash Flow

BM companies need inventory on hand to meet the demand for the products they offer, but the more cash flow you have tied up in inventory, the less you have to spend in other areas. Companies that carry an abundance of inventory won’t have the cash flow to sustain digital improvement initiatives such as investing in new technology or process improvements. If companies order only the inventory they need and automate inventory ordering processes, funds will be allocated to the right areas at the right times.

Shifting Customer Demand

Having the right amount of inventory when it’s needed is essential, but having excessive inventory can be expensive and troublesome. The market drives demand for materials and products and tying up funds in excess inventory can be detrimental. If demand drops dramatically or goes in a different direction, companies could get stuck with inventory that no longer has the same value that it used to. BM companies must be agile and shift to meet market demands as quickly as possible without sacrificing profitability.

Inventory Takes Up Space

One major concern surrounding excess inventory is the cost involved with storing it. If the excess of one product is taking up valuable ground space, BM companies will lose out on being able to carry one or more profitable materials and products. Meanwhile, they are also measuring and managing low-turnover inventory that isn’t turning a profit or is experiencing decreased profit margins.

Reduced Profits

Excess inventory leads to reduced profit margins and year-end profitability. Companies with excess inventory often lose profit by carrying inventory in excess of what the market is demanding. This can happen as a result of human error or poor inventory insights and lack of best management practices.

BM companies may take a hit to their profit margins as well because they will be forced to sell excess materials at discounted prices to free up profitable space. If demand shifts away from the material entirely, a BM company is left with a material that is no longer worth what it was paid to produce, inventory, and transport it.

For example, as car dealerships near the end of the year and have the opportunity to bring new, higher value vehicles with significant profit margins onto the lot, we begin to see “end of the year flash sale” marketing. Why? Because last year’s models are taking up space on the lot and they need to be sold to free up space for the new models with higher demand. Dealerships discount these vehicles, making for a reduced profit margin, all for the sake of freeing up space and to make more money on high-demand vehicles. You won’t see a dealership holding onto a 2006 model in order to get full price when they could have the latest model on the lot.

Striking a Balance Between Inventory and Sales

Whether you are a ready-mixed concrete (RMC) company, an aggregates supplier, a state DOT, or a pulp & paper plant, finding the balance and the “sweet spot” for BM inventory can be an ongoing challenge and the cost of doing it inefficiently or inaccurately can hinder the profitability of a BM company.

Digital Transformation: Get Onboard or Get Left Behind

Bulk material industries are going digital with or without you. If you don’t get on the Industry 4.0 bandwagon soon, you’ll be left behind – and you’ll be less profitable than had you taken the leap when you should have. We’ve all heard the saying, “if you are green, you are growing; but if you are ripe, you are rotting!” Organizations like yours are devoting time and money to saving time and money – it’s that simple.

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