Why The Ready Mix Concrete Industry Must Modernize for the Future

At Stockpile Reports, we are deeply invested in providing precise, fast, and reliable inventory solutions to the bulk materials industry. We recently announced our newest solution, Stockpile Reports for Logistics, a near real-time auto-replenishment inventory solution. Our Logistics solution uses low-cost fixed cameras and Stockpile Reports’ pile modeling system to provide near real-time inventory levels, dramatically improving the way that ready-mixed concrete (RMC) companies measure and track their inventory, driving efficiencies at all their plants.

Numerous trends in the RMC industry will require digitization of core functions of businesses to remain competitive, reduce write-offs, eliminate risks, and become more profitable than ever before. Digitizing core functions of an RMC company may sound daunting because where do you start? But remaining in the “wait and see” zone isn’t an option any longer.

There is a major, fast-paced move towards digitalization sweeping the market today. At the core of this digital transformation are technological solutions aimed at improving, enriching, and maintaining functions of businesses alike.

Not Digitizing Core Functions is No Longer an Option

Experts suggest that the construction industry is one of the fastest growing industries in the U.S. and is expected to have one of the largest increases in real output, reaching nearly $1.2 trillion dollars by 2020.

RMC manufacturers must become agile and reallocate their workforce to production tasks to meet the demands of the construction industry.

In order to accommodate for growth and make this shift, manufacturers will find themselves digitizing previously manual tasks, such as inventory counts, to free up their workforce. They will find themselves relying on real-time data to improve their internal processes, like order processing, and inventory and production control, to harness even greater efficiencies.

Alternatively, if manufacturers choose to ignore change and continue to do business as usual, they will likely find themselves outbid by competitors. Lagging behind in digitization will create an increased level of frustration and tension between production and management, or even worse, cause the manufacturer to knock on the door of exiting the market altogether.

Failure to digitize and keep up with the fast-paced technological advances that are occurring in the industry could be detrimental, if not fatal. On average, over 30 percent of plants existing in one Economic Census will no longer be operating five years later when the next census is taken. This level of change might strike some readers as high, but it is within the typical range observed across four-digit manufacturing industries.

Digitizing Decreases Write-Offs

No one wants to talk about the end of the year and the impending write-offs that are looming over everyone’s heads. We all know it’s coming, but we are all pretending like maybe it won’t be as bad as last year.

Inventory write-offs, especially large, recurring write-offs, can indicate that an RMC plant has poor inventory management. The plants may be purchasing excessive or duplicative inventory because they are uncertain what they currently have on hand, need to reorder, are using existing inventory inefficiently, or all of the above.

To avoid ordering too much or too little inventory, companies are able to automate the entire process by continuously monitoring stockpile inventory levels. Stockpile Reports for Logistics utilizes affordable fixed cameras to monitor inventory levels in near real-time and reorders inventory when needed. Orders are placed automatically when stockpile levels drop below a customer-defined threshold, eliminating human-error entirely.

Bulk material companies can trust that their inventory levels are being precisely and consistently monitored to increase production, eliminate risk and human-error, avoid stock-outs, and drive efficiencies to record levels.

Digitizing Frees Up Thousands of Man-Hours per Year

RMC companies should also consider digitizing their inventory measurement process completely. What if an RMC company could measure their stockpiles via a drone, airplane, or iPhone, then view the results of the measurements through a user-friendly dashboard, freeing up thousands of man-hours per year? Well, it’s not too good to be true and it’s easier than one might think.

Based on established SOP’s (Standard Operating Procedures), RMC inventory is typically counted at the end of a given time period and costs of goods sold are recorded based on the difference between the available inventories and the ending inventories. RMC plants often do daily inventory checks to confirm replenishment orders and perform monthly inventory counts to reconcile delivery tickets with finance.

Digitizing inventory measurement and management creates transparency between leadership and production, reduces risk, eliminates human-error, provides insight into areas for improvement, and allows for the reallocating of man-hours to revenue generating production tasks.

Digitalization Increases Productivity

According to a Market Research Future raw research report, the RMC industry is expected to grow at a CAGR (compound annual growth rate) of 8.02% from 2017 to 2023. This growth is attributed to many factors including an increase in population and the associated need for residential homes, commercial buildings, retail spaces, and infrastructure such as roads and highways, etc. to support the population growth.

If a plant digitizes its inventory measurement and management processes, including automating the ordering of materials, it can reallocate workers to revenue generating production and delivery tasks. Closely monitoring these KPIs is critical to improving profitability and remaining agile to the demands of the construction industry.

More, More, More!

As RMC producers begin to digitize their operations and material tracking, they begin to reap the benefits of efficiency. They are able to produce materials more efficiently and meet the demands of the marketplace without cutting corners.

RMC producers are not just manufacturers, they are logisticians: they deliver, typically on short notice, a perishable product to time-sensitive buyers in multiple locations and they need to do it efficiently to avoid inventory loss and remain competitive.

Automating previously manual tasks can free up resources to produce more and deliver more and do them both more efficiently than ever before.

Automation and Digitization Are Knocking

With Stockpile Reports for Logistics, you will have the power to easily automate all your material reorders and eliminate tying up all your man-hours with inventory counts. Gone are the days of daily inventory checks, monthly and quarterly inventory counts, and large, recurring write-offs.

Automation and digitization are taking the industry by storm. It’s a huge shift that is taking place in many industries but particularly in the construction and building material industries. Companies are taking on digitizing core functions of their businesses to harness efficiencies, which will prove to be critical in the immediate future and well into the next decade.

It’s time to step into the ring and improve your bottom line. Are you ready?


Sign up for our newsletter and received updates on our latest offerings, blog updates, and announcements.