The Problem: Your ready-mix sales fell by 75% in one quarter. It sounds extreme, but some U.S. concrete producers lived this nightmare more than 10 years ago. When business is good in concrete, it can be easy to forget how bad it can get.
The Plan: As any good gardener knows, you need a variety of plants with different growing cycles to maintain a lush garden year-round. Concrete producers should take a similar approach to distributing work across various construction segments. Most producers know exactly how much they sell of each product, and how their plants and fleets perform by region. They don’t necessarily track revenue by business line; for example, how many cubic yards of concrete or tons of aggregate are used in residential versus commercial projects.
The Solution: Companies can pursue this line of data through an enterprise resource planning (ERP) system. By tracking each order of concrete, cement, or aggregate by work type and zip code, the producer can develop a heat map of the volume and type of construction activity in each region.
It can also implement a specialized customer relationship management (CRM) toolset that will complement the ERP data. By tracking the “quote-to-cash” process, the producer will see specific opportunities in the pipeline as well as areas where projects may be drying up. A real-time, mobile component will capture and convey this so sales teams can pursue different types of work or adjust prices accordingly. Executives will be able to make more informed decisions and react quickly.
The Example: By using this technology, Titan Florida can compare results over past quarters and see how customers in different segments performed. If the executive team sees a certain segment decline three months in a row, it investigates the reasons causing the change.
Titan also relies on construction reports and economic forecasts from several sources, including PCA, Dodge Data & Analytics, and the University of Central Florida. AIA’s Architectural Billings Index (ABI) provides a nine- to 12-month outlook on new construction.
The next recession is inevitable. How will concrete producers know in advance? How will they respond? The producer’s ERP and mobile tools are now a strong component of Titan’s defense.
No construction segment is recession-proof, but concrete producers can use existing data to analyze how their backlog aligns with emerging construction trends. When the forecast shifts, they can strategically pursue specific projects to soften the impact of an economic downturn.