Why Dispatch Optimization?

1. Why Dispatch Optimization? Dave Donaldson Command Alkon Incorporated ddonaldson@commandalkon.com (205) 879-3282 x1203

2. Session Objective • This session introduces the concept of Dispatch Optimization and the benefits it can provide your organization. This session is designed for anyone in your organization interested in better understanding the real challenges behind achieving more cost effective use of your dispatch resources. Why Dispatch Optimization?

3. Optimization The Next Generation Dispatch Tool Why Dispatch Optimization?

4. Optimization The Next Generation DispatchDecision Tool Why Dispatch Optimization?

5. Advancements in Central Dispatch Why Dispatch Optimization?

6. Some Things Have Not Changed • The job requirements have not changed dramatically during any of these generational leaps • Service the customers’ needs as best you can • Do it with the least amount of cost • Do it while dealing with: • Multiple trucks • Multiple plants • Multiple materials • Multiple employees • Multiple customers, etc. Why Dispatch Optimization?

7. Managing Resources • A typical ready mix customer has millions of dollars invested in these resources (trucks, plants, etc.) • If these resources were invested in the stock market, dozens of financial experts would be used to get the greatest return from these investments • The luxury these experts normally have is the time to study, consult, advise and act upon developing market trends • A dispatch office does not have that luxury Why Dispatch Optimization?

8. A Day in Dispatch We are late on two orders…which one do I ship next? Plant 4 just shutdown…they say it will be about two hours before they are fixed Paul needs you to call him ABC Construction needs 3 more yards Truck 41 needs to go to the shop when it returns Reynolds is saying that we gapped them this morning Pat can’t get into the Air Force Base because he has not been cleared for a security pass! Mike is asking what plant he needs to return to The 250 yard order for tomorrow just cancelled!!! Why didn’t Taylor Engineering didn’t get their first load on time this morning? Pete said he needs to get off by 4pm Mike is almost on overtime Has anyone seen Bill…he was supposed to be in service 30 minutes ago Don’t start order 12 until order 6 has finished Why Dispatch Optimization?

9. Dispatch Challenges • High stress situation • Everything keeps changing…the ‘plan’ needs constant re-evaluation • By the end of the day/week, dispatchers are fatigued • Angry customers provide immediate feedback thus over-influencing dispatch decisions • The reward: to be second guessed about the decisions made Why Dispatch Optimization?

10. Where’s the Emphasis? • Dispatchers take care of customers…and themselves • No one ever got yelled at for over-servicing a customer…in fact, this type of behavior is often encouraged or reinforced • Takes on various forms: • Calling in more drivers than needed • Calling in drivers earlier to insure first round is on time • Holding trucks at the end of the day…just in case • Shipping trucks as soon as they hit the yard • End Result…more costs than needed to provide the service level committed Why Dispatch Optimization?

11. Why Dispatch Optimization? • How can we help this guy? (and in turn help the company manage its resources more effectively) • We can help him make better decisions! Why Dispatch Optimization?

12. Balancing Act • Plants to open • Drivers needed • Driver call-in order • Changing orders • Drivers late arriving • Trucks sitting in yard • Customer pouring slowly • Trucks stacked up • Plant breakdown • Importance of orders • Trucks waiting onsite • Driver overtime • Accident delaying trucks • Etc…. SERVICE COST Why Dispatch Optimization?

13. COMMANDoptimize Realtime Optimization: Optimizing your current & future delivery plan every second of the day Why Dispatch Optimization?

14. Not A New Concept • Many companies outside of the Ready Mixed Concrete Industry have used optimization for years… Logos trademark of respective company Why Dispatch Optimization?

15. Truck Req’ts Schedule Req’ts Order Req’ts Map Pages Real-Time Solution • Changes • Quantity • Time • Rate • Status • Breakdowns • Delays • Etc. Mix Availability Driver Callin COMMANDseries or Integra Why Dispatch Optimization?

16. Truck Req’ts • Updated Plan • Capacity Plan • Real Time Schedule Schedule Req’ts Order Req’ts Map Pages Ticketing Tracking Scheduling Real-Time Solution Optimization Engine • Mix Costs • Plant Speeds • Priorities • Job Restrictions • Driver Availability • Etc. • Costs • Service Penalties • Priority • Changes • Quantity • Time • Rate • Status • Breakdowns • Delays • Etc. Mix Availability Driver Callin COMMANDseries or Integra Why Dispatch Optimization?

17. How does it work? • Distribution factors assigned a “cost” • The costs include delivery, production & service • These costs set by you • The ‘best plan’ is the lowest cost solution • Including the ‘Service Factor’ • Truck Costs • Driver Costs • Plant/Product Costs • Lateness Cost(What is the cost of bad service?)(What real costs will be sacrificed to achieve ‘desired’ service?) Why Dispatch Optimization?

18. What’s the Potential Impact? • NRMCA 2011 Industry Survey • Average Cost Per Yard for Typical Producer - $ 95.74 • Lots of focus on fixed costs • Remaining pieces are 79% • Variable costs • Dispatch decisions greatly influence the final cost • Directly affect Bottom Line Why Dispatch Optimization?

19. Delivery Costs • Greatest Impact Normally • Constant focus on variable costs AND service • Focus on Nonproductive Time • Start-up • Clock In • In Service • First Ticket • Shutdown • Last ‘At Plant’ to ‘Clock-out’ • Overtime Hours • Hours of Service • Round Trip Times • Job Wait Time • Pouring Rate • Trucks Onsite/On Road • Plant Waiting Time Delivery $19.14 Why Dispatch Optimization?

20. Plant & Material Costs • Plants • Plants needed • Start-up cost • Hourly cost • Plant loading speeds • Materials • Constituent/mix costs • Included in the equation with other costs • Do your shippers know the cost of all mixes from all plants? Plant $6.35 Material $50.47 Why Dispatch Optimization?

21. Bottom Line Results • Minutes become Hours • Reducing time spent in non-productive activity • Start-Up Time • Time to first ticket • Deadhead Time • Job Wait Time • Plant Wait Time • Shut Down Time • Plant/Material costs have amazing impact with some customers • Real time adjustments • Planning for the next day Why Dispatch Optimization?

22. What Results Can Be Achieved? • Decrease Variable Costs • Driver Hours • Truck & Plant Costs • Material Costs • Reduce Fixed Asset Requirements • Improve Customer Service • Increase Dispatch Efficiency • Better Incident Handling • Focus on the exceptions • Others include (harder to quantify) • Reduce Shipper Training Time • Reduce Shipper Turnover Why Dispatch Optimization?

23. Hear Directly from Current Customers • Wednesday, 2pm(St. Croix A) • Dufferin Concrete • Syar Concrete • Kuert Concrete • Thursday, 1pm(St. Kitts) • Prairie Materials • Harrison Construction Why Dispatch Optimization?

24. Highlights from Customer Presentations • Customers experiences are different • But there are some similarities • Operations from 30 trucks to 300 trucks can benefit • Savings don’t always come from the same areas • Customers are seeing a positive bottom line result • Successful implementations are not done overnight • There are challenges to success Why Dispatch Optimization?

25. Implementation Methodology Why Dispatch Optimization?

26. Status and Roadmap • 21 Operations with Optimization • 20 added Optimization to existing dispatch • 1 from Day 1 with COMMANDseries • Operations currently utilizing Optimization include: • Largest: 320+ trucks / 25+ plants • Smallest: 30 trucks / 3 plants • Success has resulted in additional rollouts in same companies • New customer implementations underway • Future Development Why Dispatch Optimization?

27. What is needed? • Software • COMMANDconcrete or Integra • Map Order Entry • Truck Tracking • COMMANDoptimize Module • Hardware • Statusing system • GPS with Autostatusing preferred • Dedicated Optimization server Why Dispatch Optimization?

28. COMMANDoptimize • The Next Generation Dispatch Tool • Balance Service AND Cost • Gain Competitive Advantage • Manage by Exceptions • Results Are Not Theoretical • Savings Translate Directly to Profitability • Immediate returns in current market… and better prepared for what is to come Why Dispatch Optimization?

29. Thank you! Questions? Why Dispatch Optimization?

30. Please Complete Your Evaluation • Be sure to circle the session you are evaluating on the back of your card • Optimization Track • OPT-001 • “Why Dispatch Optimization?” • All breakout session materials can be accessed at:www.commandalkon.com/cc2013/update/index.htm • Thank You! Optimization Producer Perspective - Kuert Concrete

31. Antitrust Statement It is vital that all Command Alkon meetings and activities be conducted in a manner consistent with full compliance to both the letter and spirit of the antitrust laws.                 Agreements among competitors that unreasonably restrain or limit competition are unlawful under the antitrust laws and violators are subject to criminal fines and incarceration, civil fines and private treble damage actions.  Examples of such illegal agreements by competitors are agreements to fix or stabilize prices, agreements to allocate territories or customers, and agreements to limit production or output.                  Accordingly, it is inherently risky and potentially improper for competitors to discuss at Command Alkon meetings or activities, or otherwise, the subjects of prices, terms and conditions of sale, markets, individual customers, individual company costs, and other elements or factors that may affect competition.                 It is important to bear in mind that those in attendance at Command Alkon meetings and activities may include competitors.  Any discussion of sensitive antitrust subjects with one’s competitors should be avoided at all times before, during, and after any Command Alkon meeting or activity.  If at any time during the course of any meeting or activity, the Command Alkon employees believe that a sensitive topic under the antitrust laws is being discussed, or is about to be discussed, they will so advise and halt further discussion.  Attendees at any meeting or activity should likewise not hesitate to voice any concerns the may have in this regard. Optimization Producer Perspective - Kuert Concrete