Central Precast Concrete brings its diverse plants under centralized control while keeping their individual strengths intact
Story and Photos by Ron Hyink
Change your leaves, keep intact your roots,” echoes French novelist Victor Hugo from the 19th century. The words sweep along like a gust of wind throughout northern California where the Sacramento and San Joaquin valleys converge just east of the San Francisco Bay area.
Change is in perpetual motion here, and Central Precast Concrete Inc. is forging changes of its own. Central Precast serves the northern California market with underground drainage structures and sound wall systems. With its corporate headquarters centrally located in Livermore, the company has plants in Lathrop, Milpitas, Morgan Hill and nearby Pleasanton. These individual plants were acquired by U.S. Concrete, and it is up to Don Humphrey, Central Precast’s general manager (pictured), to bring them under one roof, so to speak, while allowing them to maintain their own unique strengths.
“It’s a tough balancing act to keep what was good about these individual companies and at the same time get them to think, act and operate as one company that’s in alignment with our values,” explained Humphrey. “Each company that we bought had a different personality and culture,” he said, and it has been Humphrey’s challenge to bring them under U.S. Concrete philosophy. “It doesn’t happen overnight.”
One of the things Humphrey did was to centralize all locations under the Livermore corporate offices. “That centralization caused so many changes in our business,” he said. Prior to that, each plant operated independently, as if it were its own company. Each had its own sales staff, its own purchasing personnel, its own production schedule, its own dispatch department – in effect, each had its own system for running its business. “When we went to a centralized business model, all of that changed. The challenge is that we can’t have each of them doing their own thing, because then it doesn’t all fit together as one piece.” Humphrey described it as a jigsaw puzzle that has to be put together. “And all of it needs to be seamless for the customer.”
Centralization meant bringing sales, purchasing, inventory, accounting and management to the Livermore office. Each plant manager is responsible for everything that goes on at his facility. “They need to own that business and run it as if it’s theirs and embrace U.S. Concrete philosophies at the same time,” said Humphrey. “The plant managers are ultimately responsible for quality, safety, production, employment and labor relations, cleanliness, environmental – they’re responsible for it all.” These very areas fall under a still-developing set of Best Business Practices to bring even more unity among the plants.
A new computer software system customized for Central Precast is another step toward unity – or perhaps a giant leap. Humphrey began to realize that each plant not only had its own unique personality, but each one was manufacturing its products slightly different by using its own measuring standards, manufacturing processes and even using different terminology. For example, production drawings were unique to each plant. “But we’re standardizing all of those so that when production drawings are done by the sales people in Livermore, it doesn’t matter which plant it’s going to – any plant can make it. That’s part of the change that’s going on in our business of really standardizing the inner workings of how and what we do.”
The new computer system was a laborious undertaking that took more than a year to bring up to speed before the previous system could be unplugged. Most business software manages only a few aspects of the business, such as accounting or inventory, but Central Precast required a package that could handle all operations at all of its plants, plus sales, inventory and accounting. “We built all of our business from the ground up in the new system,” said Humphrey.
Some of the biggest challenges came from various structures that customers require due to local and state specifications, which often include a number of variables. Central Precast is dealing with more than 100 different public agencies, with each wanting it their way. “When you add all these different variables together, it becomes a very complicated structure – as complicated as a concrete structure can be,” said Joe Barden, Central Precast’s purchasing and inventory manager.
Once the new system had been developed, the company ran the old and new systems parallel for one month to make sure the new one proved to be reliable. Barden said it took 14 months to integrate all Central Precast locations. “We had to make it work right across all locations – from purchasing and accounting to sales order entry and manufacturing – and then flip the switch and make it work,” he said.
The switch was flipped April 1, and the old system was unplugged, officially bringing all plants together as one production team. “This gives us a format to make sure that they’re all the same,” explained Barden. “We call the parts the same, dimension them the same, we cost them the same, so uniformity in how we conduct our business is probably the biggest benefit.”
The bottom line for all of their efforts is the customer. “Our job is to take care of our customers – get them the products when they need them and get them the right products,” said Humphrey. The customer, he said, will go to the precasters who can provide the products quickly, within specifications and of good quality. “And that’s one of the things that can’t change as we go through all of these internal changes.”
Until about a year ago, Central Precast customers were primarily involved in the new residential construction market for medium to high-end homes. But now that the area is becoming saturated with people and room to build is running out, that particular market of underground drainage products has cooled considerably, prompting contractors to go for the commercial jobs. Larry Gielenfeldt, director of marketing and sales, explained that the economic slowdown is causing shifts from one sector to another sector and from one geographic area to another area in the construction industry. “Now that the housing market has slowed, they still have to build the Home Depots and the Walgreens and the Wal-Marts, and so those shopping centers are moving in now behind the housing to service those people who moved into those areas where there was nothing,” explained Gielenfeldt. Following close on the heels of those retailers come restaurants and schools, he said.
“As the housing has slowed the last year or so in California, we’ve shifted some of our emphasis, as our customers have, to the public works sector,” said Gielenfeldt. The good news is that there will be good funding for public works, thanks to California voters recently passing a $19 billion bond measure to improve and expand transportation systems. Gielenfeldt explained that there are a lot of deteriorating roads in northern California, so he expects CalTrans to repair and widen them, which again will require new underground drainage products.
Transportation itself is another casualty of overpopulation. Not only is it harder for employees to get to work on the congested freeways, but outbound deliveries of precast products as well as inbound deliveries of supplies all experience significant delays. More time spent on the road equals fewer deliveries per day, and that equals a less-than-optimal bottom line.
“Traffic is a major, major issue in the San Francisco Bay Area,” said Humphrey. “You really have to look at where your delivery trucks are going, what time they’re going, and it’s really tough to work around the traffic. You do the best you can.”
Humphrey said the company also has to look at the time required for employees’ commutes, where they can afford to live and where the plants are located. To help ease the pain and frustration of rush-hour traffic, his plants start up as early as
5 a.m. and most employees are out by 3 p.m. “That helps our team members with the commute so that they aren’t caught up in the traffic as bad.”
Acquiring the facility in Lathrop, the easternmost of the Central Precast plants, has taken some of the sting out of the commuting and delivery woes, because it is a little farther removed from the densely populated areas and heavy traffic. “Our long-term goal is to have Lathrop service most of the valley and Sacramento,” said Humphrey.
After all is said and done, though, Humphrey acknowledged that long commutes are a way of life in most of California, just as his father before him had to commute two hours each way into San Francisco from Santa Rosa. But most people are sticking to their roots; only their leaves are changing.