All posts by Tim Dwyer

Juan’s Ready Mix

Producer Profile

Juan’s Ready Mix
2016 revenue: $475 million
Locations: 85 plants
EBITDA: 10.4%

The expense of a ticket

Juan’s Ready Mix was concerned about the costs associated with IT support for the quote-to-cash process. The CFO reviewed the spending on IT support and made a list of the process:

 

• Hardware
– servers
– data center
– installation
– configuration
– switches
– routers
– security fees
– energy (power and cooling)
– maintenance and annual support
• Software
– Systems for dispatch
– DB
– security
– mix management
– quality control
– annual support
– other
• Connectivity
– Systems for dispatch
– installation
– configuration
– support fee
– T1
– trunk
– modem
– router
– wiring
– internet line between server locations and remote sites

• Servers, switches, routers, security fees

– installation
– configuration
– maintenance
– annual support
• Labor
– Employee support, maintenance and configuration of software and hardware
– Contractors for configuration, training, support and maintenance
– Training expenses

 

The CFO recognized that any equipment or software that was 10 years or older represented a tangible risk of failure, and planned to re-purchase these items. He calculated a reasonable, ongoing amortization amount for purchasing new equipment and software. In 2017, the producer delivered 602,410 loads at an all-in cost of $2,620,000. The IT “tax” on operations totaled $4.35 per ticket or 0.55% of revenue.

The cost of the Cloud

The CFO created a technology focus group to scour the marketplace for SaaS (Software as a Service) offerings to improve the quote-to-cash process. Given the extreme age and technical obsolescence of the core dispatch software, it was difficult to find suitable “plug-in” alternatives for functional areas such as CRM. However, several component packages were identified as well as a promising quote-to-cash offering.
The SaaS offerings were found to have several key features, first of which was Total Cost of Ownership (TCO). The pricing model was based on usage and thus scaled with the seasonal volume. Further, there was no need for servers, data centers, support software, or the hoard of staff required for support. Finally, and somewhat unexpectedly, data exchange and security were much better since the SaaS offerings were all based on modern tools.
As a result of the focus group’s findings, Juan’s Ready Mix began migrating away from outdated, client-server tools to modern, Cloud-based systems. The economics justified the change; but more importantly, the modern tools enabled Juan’s Ready Mix to improve business processes to reduce costs for the producer and its customers. Customers loved being able to see daily activity on mobile phones, salesmen could quote on tablets, and so much more.

Economic impact

Juan’s Ready Mix has started the process of switching from client-server based software to SaaS. The first target was an isolated group of five plants and included a complete transition to SaaS. The all-in costs of the SaaS, prior to staff training, amounted to $2.50 per ticket. This equated to a savings of $1.85, with the (invaluable) bonus of empowering better business processes. The CFO plans to complete the company-wide transition in 2019, anticipating a $1,115,000 savings, or 2.3% EBITDA improvement.

Some Concrete History

The Age of Concrete

Al-Khazneh, aka. The Treasury Monument in Petra

Proven to last thousands of years, concrete is currently one of the most popular building materials. While it’s been well studied with the Ancient Romans, they were not the first to use concrete. The Romans (~300 BC) may have used concrete in larger amounts and more regularly, but were certainly not the first.

Archaeological evidence of concrete use dates back to 5600 BC in Europe, 3000 BC in China and 2500 BC in Egypt. The oldest structures Archaeologists have found were built by the Nabataea traders using a type of concrete material to develop a small empire in the regions of southern Syria and northern Jordan around 6500 BC. They created concrete floors, fire pits, housing structures, and underground cisterns.

That Manual Panel…

That Manual Panel…

“The upgrade to a portable solution that offers complete control with a detailed record of everything was simple”

A manual push button panel is no longer part of the standard package offered by majority of batch control providers. When needed, more and more concrete batch operators worldwide load concrete manually using computer batch screen. There are many benefits to replace manual push button panels with computers. A manual panel adds complexity and unnecessary risk factors to your operations. Everything that can be done with a manual panel can be done more effectively with a smart batch control software.

Cost Factor

An electrical manual panel costs 5- 10 times more than a backup computer tower. Some may argue that it’s difficult to replace a computer in the middle of a busy morning. How about if replacing a batch computer is as easy as turning on a laptop – all you need to do is just to plug in the power cord?

Risk Factors

Okay, so nobody wants to imagine employees stealing from their own company… it is however, always good to be prepared. A manual panel increases the chance for employees to steal from the company. Without a manual panel, there is no way concrete can be loaded without turning on the batch computer. With our Pioneer batch control, everything is tracked, monitored and recorded. Managers can actually access the program via web browser in order to review inventory reports, assess batch performance, and adjust settings as needed, allowing business operations to run much more smoothly.

There is No Guarantee

An electrical manual panel is not a guaranteed backup – at best it’s a false sense of security for the event that your computer goes down. The solution for this scenario is to have a backup computer; A backup computer would be just a fraction of the price of a manual panel.

The Question You Should Ask

So next time when you need to purchase a batch control system, we hope you will ask if you really need to spend that much money for something you barely touch while you can have all manual control functions on a batch computer.

 

How Does Going Paperless Save Money?

How Does Going Paperless Save Money?

“The paperless office is possible, but not by imitating paper.” – Ted Nelson

Businesses of all sizes handle a variety of documents every day, from contracts and tickets to utility bills and inspection sheets. Printed materials are costly to produce and tend to take up lots of space in filing cabinets and folders. Here’s how going paperless with concrete ticketing software and other digital platforms can help businesses save money, space, and time.

Less Money Spent on Paper

Going paperless comes with a few upfront costs, but the long-term savings and profits make it a wise investment.

Studies estimate that companies still using physical documents spend an average of $80 per employee on paper each year. By transitioning to a paperless system, businesses across industries will reduce or phase out these expenses. Beyond the cost of paper alone, other fees including cost of labor to scan tickets, scanner expenses, carrier payments, and the charge from lost tickets (which registers even more with customers), are entirely eliminated, which should be taken into consideration.

Increased Efficiency

Going paperless can also save businesses money by increasing their day-to-day efficiency.

Organizing, filing, and searching through physical paperwork takes up a lot of time and energy. With digital documents/systems, employees can process valuable information with just a few clicks. When staff members waste less time and energy managing paper documents, they have more time to take care of business.

Without depending on paper for transactions, customer interaction is enhanced as well. Billing is easier and faster without waiting for the tickets, and customers are able to access their tickets in real-time, which reduces calls and business time spent to deal with customer inquiries.

The iStrada Platform Helps Concrete Businesses

Sysdyne’s iStrada concrete ticketing software sets a new standard for ready-mix companies looking to go paperless. By monitoring and tracking deliveries in real time and producing hot tickets electronically, iStrada allows concrete producers to invoice quicker and collaborate seamlessly with customers instantaneously. It also frees drivers from the stress of dealing with physical tickets, instead focusing on getting to the job safely and on time using custom routing and geofence features. Clients can also track their deliveries as needed and avoid having to contact dispatchers directly.

Sysdyne’s mission is to develop cloud technology solutions that revolutionize everyday business for concrete producers. Through iStrada and other solutions, Sysdyne helps concrete businesses go paperless to lower costs, improve services, and create efficiencies in their day-to-day operations.

If you’re interested in a consultation, call us today at 203-327-3649.