1 / 29

Succeeding in Inflationary Times Practical Ideas for the Producer

Succeeding in Inflationary Times Practical Ideas for the Producer. Presented by Bill Ray of Precast Consulting . Succeeding in Inflationary Times Practical Ideas for the Producer. Agenda Precast Costs Precast markets Inflationary responses Cost Reduction That Works Cement

knox
Download Presentation

Succeeding in Inflationary Times Practical Ideas for the Producer

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Succeeding in Inflationary TimesPractical Ideas for the Producer Presented by Bill Ray of Precast Consulting

  2. Succeeding in Inflationary TimesPractical Ideas for the Producer • Agenda • Precast Costs • Precast markets • Inflationary responses • Cost Reduction That Works • Cement • Reinforcing steel • Fuel & transportation • Labor costs • Summary

  3. Who is Bill Ray Principal at Precast Consulting Background Business owner PCI certified producer General manager Sales exceeding $15 million Project manager Projects exceeding $ 10 million Chief fin. Officer Sales exceeding $150 million Education MBA University of Chicago BS Florida state Contact info: 770-979-3711. billray@precastconsulting.com Succeeding in Inflationary TimesPractical Ideas for the Producer

  4. Succeeding in Inflationary TimesPractical Ideas for the Producer Price History & Outlook • Cement • Short Supply – rationing • Regular increases every quarter 2004 • Price could exceed $100/ton this year • Steel • Price explosion early 2004 • Rebar over $0.40/lbs. Could go higher • Fuel • Sharp price rise starting 2002 • Fuel oil – Diesel exceeding $2.00/gal • Trucking costs up sharply • Uncertain outlook

  5. Succeeding in Inflationary TimesPractical Ideas for the Producer Responses that don’t work: • Do nothing – wait for prices to go down • Produce out of spec product – cut quality • Don’t raise your prices – concern about competition • Don’t know costs – uncertainty about impact on profits • Solve the problem with automation & capital spending • Don’t involve employees in the solution

  6. Succeeding in Inflationary TimesPractical Ideas for the Producer Proven methods that will offset higher costs: • Cement • Batch plant controls • Mix design • Improved management • Reinforcing Steel • Design review • Use of Synthetic fibers • New products • Fuel • Interruptible gas • Boiler efficiency • Delivery alternatives • Labor • Industrial engineering methods • Work group productivity

  7. Succeeding in Inflationary TimesPractical Ideas for the Producer Proven methods that will offset higher costs

  8. Succeeding in Inflationary TimesPractical Ideas for the Producer Cement Costs • Will cement reach $100/ton?

  9. Succeeding in Inflationary TimesPractical Ideas for the Producer Cement Costs • Batch Plant Controls • Aggregate Moisture Control • Pile rotation • Watering management • Bin moisture • Microwave moister meter • Chemical Control • Pre-approved “fixes” to batch problems • Mix design • 30% fly ash, slag = about $3/ yard • ½ bag cement due to better controls = $2/yd. • Most producers have $5/yard from improved control

  10. Succeeding in Inflationary TimesPractical Ideas for the Producer Cement Costs • Management • Place the batch plant under good management • Minimize organizational layers • Provide incentives for improvement milestones • Start a QC program if you don’t have one now • Begin a training program • Mix design for salaried supervision • QC methods for QC technician • Batch plant training for operators • Statistical Process Control • Standard deviation for breaks • Tools for tighter control

  11. Succeeding in Inflationary TimesPractical Ideas for the Producer Cement Costs – reduce mix $5/yd

  12. Succeeding in Inflationary TimesPractical Ideas for the Producer Reinforcing Steel • Will rebar double in price ? • Will the price pull-back actually happen?

  13. Succeeding in Inflationary TimesPractical Ideas for the Producer Reinforcing Steel • Design Review • “Feel good steel” • More bars, heavier bars than engineering requirements • Reductions of 5% are typical • Over-design product • Standard product exceeds stated engineering requirements • Submit a proprietary design • Bid an alternate to the standard design

  14. Succeeding in Inflationary TimesPractical Ideas for the Producer Reinforcing Steel • Synthetic Fibers replace steel mesh • Can be used in many underground applications • Widely accepted in septic tanks • Good application to vaults • Performance equivalence in manholes • Significant savings • Septic tanks 10-15% in production cost savings • Largest savings in labor • Increased plant productivity

  15. Succeeding in Inflationary TimesPractical Ideas for the Producer Synthetic Fibers replace steel mesh

  16. Succeeding in Inflationary TimesPractical Ideas for the Producer Reinforcing Steel • Higher steel price means new competitive standing • Short span bridges • Steel bridge beams are up sharply • Speed of erection favors precast • Shelters • Cost, availability of small buildings up sharply • Security, speed of erection favors precast. • Light poles • Sound barrier wall • Stay in place floor panel systems

  17. Succeeding in Inflationary TimesPractical Ideas for the Producer Fuel • Fuel costs affect curing heat • Fuel costs affect delivery cost

  18. Succeeding in Inflationary TimesPractical Ideas for the Producer Fuel • Most producers have large savings in curing • Interruptible gas • cost/therm is less • Dual fire boilers • Gas company will show you when to switch to oil • Boiler efficiency • Review curing curve, institute control • Inspection by boiler engineer • Insulate pipes, kiln • Improve R value of curing blankets

  19. Succeeding in Inflationary TimesPractical Ideas for the Producer Fuel • There are opportunities to save in delivery costs • Dispatch training, load consolidation • Route selection & load analysis • Many producers report 10% savings in vehicle costs • Charge for delivery distance • Most producers are delivering loads that loose money • Common Carrier Delivery • Under the crane delivery • Common carriers are more efficient • No back haul • 40% savings for qualifying loads

  20. Succeeding in Inflationary TimesPractical Ideas for the Producer Fuel - Training in routes & consolidation can save 10%

  21. Succeeding in Inflationary TimesPractical Ideas for the Producer Labor cost • Industrial engineering methods • Traditional IE job design analysis • New disciplines • Six-sigma • Lean Manufacturing • Cost savings 20% or more are typical • Work Group Productivity Improvement • Most valuable underutilized resource • Focus on developing skills, teamwork • Reduce turnover • Cost reductions of 10-20% are typical

  22. Succeeding in Inflationary TimesPractical Ideas for the Producer Labor cost – What’s Lean Manufacturing • IE discipline based on continuous improvement • Separate activities into value added and waste • Value added is any activity that transforms the product in a way that the customer will pay for it. • Waste is any activity that does not add value from the customer point of view.

  23. Succeeding in Inflationary TimesPractical Ideas for the Producer Lean Manufacturing – Steel shop example Typically over 90% of work is waste

  24. Succeeding in Inflationary TimesPractical Ideas for the Producer Labor cost – What’s Lean Manufacturing • Reduce waste through: • Standardized tasks • Workplace organization • Visual controls • Plant layout • Building quality in • Mistake proofing • Setup reduction • Focus on work team effectiveness

  25. Succeeding in Inflationary TimesPractical Ideas for the Producer Labor cost – What’s Lean Manufacturing • Lean is about making improvements in processes and teamwork, not by spending money on new equipment • Lean is not high tech – it is low tech • Lean is about great ideas that cost little or no money • Lean is about teamwork, working smarter • Lean is about making small continuous improvements

  26. Succeeding in Inflationary TimesPractical Ideas for the Producer Labor cost. Cost reductions of 10-20%/year are typical

  27. Succeeding in Inflationary TimesPractical Ideas for the Producer Proven methods that will offset higher costs • Cement • Batch plant controls • Mix design • Improved management • Reinforcing Steel • Design review • Use of Synthetic fibers • New products • Fuel • Interruptible gas • Boiler efficiency • Delivery alternatives • Labor • Industrial engineering methods • Work group productivity

  28. Succeeding in Inflationary TimesPractical Ideas for the Producer Proven methods that will offset higher costs

  29. Succeeding in Inflationary TimesPractical Ideas for the Producer

More Related