The Right Time to Purchase a New Batch Plant

By Max Hoene and Charles Watkins

A top priority for any manager is to identify ways to make their precast operation more efficient – less waste, less labor, less cost.

A laser focus on efficiency can establish a company as the low-cost, high-quality producer in its market, which positions the organization to become stronger, win new business, grow market share and become more resilient.

Consistency is key to making excellent quality precast concrete products. However, the economy, like so many other variables, is far from consistent. Just look back at the last few years.

When business is hot, operations and activity tend to become reactive with an “all-hands-on-deck” mentality in order to keep up with demand, oftentimes revealing the constraints in a system that limits further success.

Conversely, in a down economy, businesses find themselves unprepared to run lean and efficient in order to “survive the storm,” let alone improve processes or grow their market share.

The past two years showed a series of unprecedented global events with many companies experiencing both of these opposing scenarios.

Similar to the long service life common to a variety of precast concrete industry products, producers must maintain a long-term mindset for businesses to thrive. It is easy to live in the day-to-day production world that involves constant monitoring and adjustments of mix designs, repetitive processes, wasted movement and too many products that go to the boneyard rather than a flatbed trailer. Successful precast producers, however, make time to focus on what they can influence and improve by balancing and assessing context of current operations with taking action to achieve future goals which includes investing in the future.

This way, a precaster intentionally positions the company to reach its facility’s full potential.

Growing market share and increased sales are critical to a producer’s success. Doing so boils down to qualities such as increased output at competitive pricing, improved quality and adding value for customers, which points directly to the production equipment used in making concrete products.

Capital equipment improvement must have a return on investment (ROI). It is a big decision, and making the wrong one could result in pain and inefficiencies for many years. However, making the right decision pays dividends for years, even decades.

So when determining the right time to purchase a new batch plant, remember that the investment pays off over time – the return is rooted in reducing waste, labor and production cost.

IDENTIFYING THE ISSUES

Common catalysts for producers inquiring about a new plant include the need to:

• Diversify the product line (different mix designs, concrete types, production process).
• Improve concrete quality and consistency.
• Implement effective moisture control.
• Increase production volume.
• Maximize automation and efficiency (reduce labor requirements).
• Decrease plant down time.

These initial discussions often include three big questions:

• Is now the right time to make an investment in modernizing plant equipment?
• Where does investment achieve the greatest return?
• How to relieve the pressure on unit cost that is eroding profits?

A batch plant assessment, whether with the help of an industry expert or beginning with an internal self-evaluation, is a great starting point. The goal is to identify issues and constraints, then find the best solutions, generally developed with the expertise of the equipment supplier, that fits within a given budget and timeline.

For plants with serious bottlenecks, it may be worth assessing whether relocating the entire precast plant would provide the best path toward enhanced productivity and efficient workflow. In other cases, it may only require replacing one critical component, such as a mixer or a control system, to update and modernize the plant.

Any management decision needs to analyze the benefit of eliminating production constraints, reducing labor cost, increasing plant output capability or potentially developing profitable value-added offerings for a given market.

Project the efficiencies and benefits through cost savings and increased net profit. If these exceed the investment in an acceptable time, the answer is a clear yes.

REAP THE BENEFITS FOR YEARS TO COME

Today’s batch plants enable precasters to run operations with an unattended control room while still reliably delivering consistent superior-quality concrete without constraint. This is a notable example of a time and labor efficiency upgrade.

Another example resulting from a new plant is the increased concrete output, via faster batch cycles, delivering fresh concrete to the production process at a rate that meets or exceeds demand. How much would a mixer that exceeds your production demand and provides fresher concrete faster help your production and profitability?

A new batch plant also may allow many facilities to produce newer, more complex types of concrete such as self-consolidating concrete (SCC) or ultra-high performance concrete (UHPC) for the first time because of the precise control of the mix designs.

An underrated example is the look and feel of a new plant. This includes space-saving within the production facility, leading to optimized floorspace and creating an efficient production environment. New equipment also boosts worker morale who perform better in a clean, modern plant environment. Worker retention, which is an ongoing challenge today, is improved.

Bottom line: A new batch plant can make it possible for a producer to establish their company as the low cost, high quality precast producer in their market via:

• Lower plant production costs, improving productivity with less labor and less waste.
• Achieve higher production goals.
• Bring quality to the forefront.Increase profitability.
• Boost overall competitiveness.

Consult a batch plant supplier for more ideas, best practices and better solutions for a precast factory. The end result often is enhanced process efficiency and more consistent high-quality products that lead to satisfied customers, repeat business and the ability to remain agile in order to capitalize on ever-changing market shifts. PI

Max Hoene is a senior advisor at Advanced Concrete Technologies. Charles Watkins is the ACT sales and engineering manager at Advanced Concrete Technologies.