Late last year the National Precast Concrete Association released its 2018 Precast Industry Benchmarking Report, a report based on a survey of membership that describes the state of the industry and offers performance metrics for precast concrete manufacturers. This is a valuable resource for the industry and one we purchase every year. The 2018 report includes interesting data that we found very consistent with reports we have heard in our own discussions with precast producers. One glaring statistic jumps out as an immediate opportunity to grow profits.
The typical precast producer discards 1.0% of its production due to errors. This doesn't sound that bad but it actually amounts to a loss of more than $85,400 in net profits, as shown below (all numbers are from the 2018 Benchmarking Report based on 2017 performance):
Put another way, eliminate waste and grow your net profits by 7.4% without adding a dime to your revenues.
One of the primary reasons why customers want to engage product tracking is to reduce waste. With it, every repair issue is identified and the appropriate person is notified so repairs can be made immediately:
Defective product is noted in post-pour inspection;
Inspector does not approve, notes as 'Needs Repair';
Product is automatically included in a Non-Conformance Report (NCR);
NCR is automatically emailed to person responsible for repairs.
This avoids the most common reason for discarding products (as we hear it): Repair needs are not recorded accurately or are forgotten, requiring a new product to be manufactured in a hurry shortly before shipment.
If a producer cuts his waste in half with product tracking, he will pay for the cost 3-times over while benefiting from the other cost-saving benefits of electronic QC records, inventory location and management, and electronic shipping records.
Elimination of waste in all forms is the next frontier for growing precast profits. This is why many leading firms like Smith-Midland Corporation are embracing Lean Manufacturing, a culture dedicated to routinely weeding waste from every process. If you would like to learn more about how Lean Manufacturing can help increase profits at your plant, check out our web report: 17 Ways Lean Manufacturing Increases Profits and Wins Bids for Concrete Manufacturers.
Would you like to learn more about product tracking? Download the Idencia Concrete Product Tracking deck by clicking below.
If you are going to The Precast Show, make sure to visit us at Booth #590!
Our mission at Idencia is to elevate the productivity of concrete manufacturers. We offer precast RFID tracking solutions that improve productivity and offer value throughout the value chain. As a cloud-hosted product tracking system that is seamless between manufacturers, contractors and asset managers, Idencia adds information value to all, eliminates redundancy and saves time.