7. Minimizing Rejected Loads

Andrea and Griffin discuss how we can reduce the frequency and severity of lost loads. Also, Steve Carton is a wizard.

Transcript

SPEAKER_00 0:09

Welcome to Load It, the Hahn Ready Mix podcast with Andrea Meyer and Griffin Hahn, and of course producer Lexis here.

SPEAKER_01 0:16

Hey everybody. I th I feel like that was that was the smoothest one yet.

SPEAKER_00 0:20

Yeah? It's getting faster, but I don't know, faster is always better.

SPEAKER_01 0:24

Yeah, it felt it felt more Smooth. Great.

SPEAKER_00 0:28

I've been working on it.

SPEAKER_01 0:29

Awesome.

SPEAKER_00 0:34

Yes, yes. A lot of preparation goes into this.

SPEAKER_01 0:36

Yeah. Lex is really enjoying this conversation.

SPEAKER_02 0:39

He thinks he's very exasperated. He wants to start over already. I can tell.

SPEAKER_00 0:44

Don't cut this, Lex. Whatever you do.

SPEAKER_01 0:46

Not allowed to cut it. I'll just do the intro myself next time. All right. Good luck. Yeah. Yeah. So what's new?

SPEAKER_00 0:55

What's new? This is the beginning of softball season for my kids, and it's also uh elementary school talent show week. So a lot of of really exciting stuff happening for me.

SPEAKER_01 1:05

What about you? I heard you were very excited about the talent show.

SPEAKER_00 1:09

The talent show is going to be awesome. I can't wait.

SPEAKER_01 1:15

Similar soccer started last night for uh my son. So we'll see how that goes if he'll pay attention to the game and not chase butterflies around the field or whatever else.

SPEAKER_00 1:25

Aaron Powell Are you a quiet sideline parent or are you over involved?

SPEAKER_01 1:29

What do you think I am?

SPEAKER_00 1:31

I can't picture you sitting by quietly, but uh it depends on the sport.

SPEAKER_01 1:35

Like when you when my son played T-ball last year, couldn't have been less engaged. I don't even think I watched him hit because I hate baseball. But soccer, yes, very, very involved. Very active. He sits with all the soccer moms as they scream. Yes.

SPEAKER_00 1:55

The coaches aren't gonna ask you to like stop you on the back of the phone.

SPEAKER_01 1:57

You need a baritone in the in the chorus of the soccer moms there. So yeah.

SPEAKER_00 2:02

I'm sure they love that.

SPEAKER_01 2:04

Yeah. Well, cool. Well, what are we gonna talk about today?

SPEAKER_00 2:07

Today we are going to hit a topic that is close to our hearts here at Han Ready Mix, rejected loads. We take them very uh very personally, they cut deep, and it's something that we talk about every day. So we thought that would be a great topic for the podcast.

SPEAKER_01 2:22

Yeah, absolutely. And you know, rejected loads are in in in some cases a little bit of the cost of doing business in this industry. There are things that we have a lot of heavy machinery that just frankly, sometimes it breaks down. That's not anybody's fault, and that's not completely avoidable. But anything we can do to minimize them, every incremental improvement pays huge dividends. So that's why we focus on them so much.

SPEAKER_00 2:50

Absolutely. Well, let's start at the very, very beginning and just kind of define what we can what is a rejected load.

SPEAKER_01 2:56

Yeah. So the way we look at it is any concrete we produce that we intend to get paid for or invoice, right, that uh we are not able to invoice. So that would be that the slump wasn't correct, or the truck didn't make it to the job site, or the plant broke down in the middle of production, so that was we're not able to put it in the truck. Could be it's out of time or out of the temperature's wrong, or you know, there's a myriad of reasons why for whatever reason the customer can't use the concrete and it is you know on our on us, it's our issue. And so we track those on what percentage of uh those yards that we produce we're not able to invoice for and what the root causes are and try to address those root causes to eliminate them in the future.

SPEAKER_00 3:43

Aaron Powell Okay. So basically it's product that we've made that we can't sell.

SPEAKER_01 3:48

Yeah. And we don't like we do a lot of donations. We don't include anything like that in there because we're we're intending to give that away. But no, this is for things we we want to sell, but for whatever reason we we can't.

SPEAKER_00 4:00

Okay, so what's so bad about rejected loads?

SPEAKER_01 4:03

Well, obviously there is the cost of the materials and time, right, on our end with um the truck sometimes driving to the job site before we realize that there's something wrong with the load of concrete. Um, the cost of the materials themselves is pretty immense. But even bigger than that, and more important in my opinion, is the impact to our customers, right? So if we have a rejected load, that might mean a cold joint or more serious problems on a job site, or simply just our customers waiting on us. And we're very focused on making sure our customers have a great experience with us. And so if they're waiting on us because a load wasn't right, wasn't in specifications or wasn't what they ordered, that's a major problem. So, and and sometimes there can be rectifications, like if there is a cold joint or there's some other problem coming from a gap or that concrete wasn't there when it was supposed to be there, you know, then those associated costs can can get exacerbated and and kind of exponentially grow. And I also think it's sometimes hard to define, you know, what success looks like for us on a day-to-day, right? Things go well, things don't go well. This gives us like a metric. Like if we don't have any rejected loads, most of the time that means it's a pretty good day. So it it's it's an easily trackable metric for us as well.

SPEAKER_00 5:22

Absolutely. I like what you're talking about there with the time. It's easy to to quantify, you know, the the cost of materials that we lose, but our most valuable resource is our customers' time and our time. And I think that's the biggest impact that we see when we have a rejected load.

SPEAKER_01 5:36

Yeah. Also, the the other thing I should have mentioned is there's times where there's material shortages. And if we are not using all those materials, like so it's one thing to the cost of it, but you know, if there's a fly ash shortage and we have we lose a load of flow will fill that's full of fly ish, it's like, gosh, that's a really big deal because we need that for other other jobs. So if we're gonna have to replace that load, then we don't have as much of that material. So sometimes, or if we bring in specialty materials like lightweight, it's so much more critical. So we don't order excess, a lot a lot of excess for that.

SPEAKER_00 6:06

Yes. Okay. So you've talked about this a little bit already, but let's go back through kind of what the causes of rejected loads are, how we categorize them.

SPEAKER_01 6:13

Aaron Powell Yeah. So we have a number of we we have a number of categories that they include uh air content being out of tolerance, batch error, contamination, which basically means like if we put rock in the sand bin, either the the plant has a mess up or the loader or or there's contamination in the pile. We have dispatch error, driver error, plant breakdown, slump, uh time is basically what the truck can time out on like a DOT specification. A lot of times that that would come up. Uh truck breakdown and temperature. Um and then we have kind of another that it's um kind of a catch-all for really oddball stuff. So those are the different categories that we we kind of track. Last year, when I look at the data, there were really kind of five causes that were the most prevalent. The first of which was batch error, which was about, let me look, 230 yards of batch error concrete last year that we uh unfortunately were not able to sell. And then right behind those, uh truck breakdown and plant breakdown were very similar amounts of concrete. And then fourth was driver error, and fifth was slump. So a lot of times slump normally that means we're too wet because we're too dry. Normally we can add water, right? So those are our five biggest drivers of that.

SPEAKER_00 7:32

Aaron Powell Yeah. So what I'm hearing you say there is that literally everyone in the company potentially can play into a rejected load or avoiding a rejected load.

SPEAKER_01 7:41

Absolutely. Absolutely. Yeah.

SPEAKER_00 7:44

All right. Well, let's talk about that then. How do we do better? How do we prevent rejected loads?

SPEAKER_01 7:48

Aaron Powell So I like to think about this from a standpoint on those individual roles, right? The breakdowns in particular, like I said earlier, they're gonna happen to a certain extent. So when we address breakdowns for truck breakdowns, that's you know, the mechanics are making sure that they're thorough and getting any time the truck is in the shop, getting everything addressed that they can find that's wrong. And then for drivers, it's making sure that we do thorough pre-trips, we're doing them right, we're checking everything that needs to be checked, checking the oil every morning, all those things. That can help.

SPEAKER_00 8:21

We call that a daily vehicle inspection for that.

SPEAKER_01 8:23

Right, exactly. Well, and and so doing that right is critical.

SPEAKER_00 8:27

Yes.

SPEAKER_01 8:27

And and that can help save a rejected load. If we can catch something before we put concrete in the truck that's wrong with the truck, then we can get it addressed when it's not going to cost us a load of concrete. On the plant breakdown side, you know, that's uh the same thing with the plant maintenance team when they're working on something, making sure that they're finding any issues that are there. But then also the preventative maintenance that the plant managers and the loader operators do, greasing everything and just keeping an eye on where things might be going wrong. And sometimes even with a plant, like if you're working in a plant, you can hear it as it's operating, like something isn't right, and getting that addressed as soon as possible. Looking at some of the other causes, the big thing is I think paying attention to the details, right? So for batchers, that's looking at every single ticket that comes across. What's in this mix? Does it look right? How much water trim should I should I take out? Simple things like is the truck under the plant properly, right before we before we start loading? It's not unheard of for us to dump a load of concrete on the ground. That can't sell that yard, right? And for drivers, a lot of times paying attention to details is is simple stuff that we talk about all the time. Check your ticket, know where you're going, look at your load, make sure your water valve is in a closed position before you pressurize your ticket.

SPEAKER_00 9:44

Please, please. Yeah, that's check the water valves.

SPEAKER_01 9:46

That is like if we if we went into more granular, more detailed, the water valves are the biggest deal where they're they're stuck open. You know, a lot of times it's in the winter and we're we're flushing the water uh lines, and then they pressurize the tank and we throw a whole load or a whole tank of water into the load, and obviously it's garbage at that point. So keep paying attention to those details is a big deal. And then I think not panicking, uh, and this might be most on the driver's side, or sorry, on the batcher's side. Errors come up periodically in the batch panel, and it can be easy to just quickly click click through or try to fix the problem. And sometimes we make it worse. So just slowing down when that happens and making sure that we're we're not panicking and trying to open up gates and things like that, or uh unless we know what we're doing, and and always there's you know, Darren is a great resource to help with those things if that comes up. So and then one that is may not prevent a rejected load, but it would be really important for mitigating the consequences of it is catching the issue at the plant. If we can find, let's let's say concrete is batched too wet. You looked at your load and you go to the plant manager and say, hey, this is too wet, we can dry that load up at the plant, and then we A won't lose it, or B, if it's if it's unsalvageable, if something is wrong, you know, let's say we had bin contamination or something, we can get a new truck loaded up quickly, and the customer may never be aware. If we were loading a few minutes early and we can load the next truck up, reload it, you know, they may never be affected at all. And we don't have the cost of time of driving all the way to the job site to figure out that we have an issue. Um that's a best case scenario. If we're gonna have a rejected load, we want to know about it at the plant, and we want to mitigate the time impact for us and our customers with that.

SPEAKER_00 11:40

All right, well, that's a pretty thorough discussion of rejected loads. Is there anything you wanted to say that we didn't get to yet?

SPEAKER_01 11:46

Um so yeah, just kind of some high-level statistics from last year. So last year, our rejected load percentage. So of all the yards we produced, uh, we had a rejected percentage of 0.45 percent, so less than half of 1%. The industry average that I've seen from the NRMCA is right at that half a percent. So we're slightly under that. Um, and that's actually major improvements from where we were like during the bridge project, because the the specifications were so strenuous that we were much higher than that at that time. So we've been uh made great progress over the last couple of years. We've kind of set a target of 0.4 percent that we want to get under that. So it would, you know, it's not a huge difference. We want to improve on last year by 0.05%, right?

SPEAKER_00 12:35

Still takes a lot of effort to get there.

SPEAKER_01 12:36

It does, it takes a lot of effort to get there. And thus far this year, we're writing at 0.48%. So uh move slightly backwards, but we tend to have more in the winter times. Right. Uh, because there's just more things that can go wrong. Yeah, so that's that's kind of the the thought process. If we can if we can keep it in mind, again, just pay attention to the details and realize that there's there's real costs for us and our customers when when we lose a load. And everything we can do, every load we can save, it really makes a big difference. Oh, I the other thing I wanted to bring up is the just the material cost and time on our side. So it's not even including if we need to help a customer out with the situation, rejected loads from last year. That that totaled$175,000, right? That's what we estimated that that that cost us. So, you know, that's almost uh a new truck, right? That we could have bought with that, or um bonuses we can pay out and and things like that. So there's a there's a lot of better things we'd like to spend that money on than rebatching concrete. It's important.

SPEAKER_00 13:39

Absolutely. And it takes everyone's effort, everyone's head in the game all the time to make sure that we don't overlook something.

SPEAKER_01 13:44

Yeah. So some of the things that I would also say on a positive note is on a few of these, we've really improved over the years. For example, air content percentage is pretty negligible on how much we've lost with air. And that used to be a major fight that we were chasing that around. So we've really kind of nailed that down. Dispatch error has also been a lot better over the last few years than it was historically. And, you know, in general, like I said, everything is trended in a positive, a positive direction. Driver error as well. Uh a couple of years ago was, you know, I'll put it this way we had 200 yards less driver error rejected yards last year than we did the year before. Right. So that's a big deal. Great.

SPEAKER_00 14:29

I don't know. Do we keep track of uh rejected loads caught at the yard versus what gets to the customer or not?

SPEAKER_01 14:35

Uh we don't. It feels like that's gotten a lot better.

SPEAKER_00 14:38

Like we we almost celebrate when we get a rejected load that's caught at the plant that we didn't send that to the customer. And I feel like we hear about that more often now.

SPEAKER_01 14:46

We could. We certainly could. We could we could keep track of that. That that's that's important. You know, and and I guess it should also be said that the the worst case scenario for concrete that has some kind of issue is that we actually put it in place, right? So as much as we want to reduce rejected loads, a rejected load is much preferable to um for some reason deficient concrete that we have to tear out. Thankfully, we do very, very little of that. But if we know something's wrong with the concrete, we don't want to avoid the rejected load by putting it down and hoping it's gonna be okay. That's not how we do it. So that's just an important caveat to keep in mind.

SPEAKER_00 15:21

God, well, I hope everyone found this to be really interesting and find a way that it applies to their specific job. I think everyone can. I also think we should do some follow-ups on this, like maybe quarterly throughout the year or monthly, maybe just tell everybody where we are so they can see how we're doing.

SPEAKER_01 15:35

That's a great idea. In some other company news, we have uh something exciting. So you may be aware the Fortigators are basketball national champions.

SPEAKER_00 15:44

I knew we weren't gonna get out without it.

SPEAKER_01 15:46

You tried to like sneak around it at the beginning. More pertinent for us as an organization is we have a little bit of a dynasty happening here in the company. So Steve Carton, not only is he on his second championship of the company March Madness pool, the year before his first time he won it, he got second. So he's been in the He's an expert. Yeah, he's like a wizard or something.

SPEAKER_00 16:10

Maybe we should use his bracket in like an actual Vegas scenario.

SPEAKER_02 16:16

Just leverage the whole company.

SPEAKER_00 16:18

Yes, yes, put a bunch of money on Steve's bracket next year.

SPEAKER_02 16:22

Oh boy. All right, Steve, that's a lot of pressure.

SPEAKER_00 16:26

Start working on it now.

SPEAKER_02 16:27

Yeah. Oh geez.

SPEAKER_00 16:28

I have a couple things. Um, first, very exciting. The podcast is now available on the tablets in the driver's truck. So they should be able to click that link and hear this podcast anytime. And also another tablet update is digital fleet expanded the ticket details that are available. So you might see a new link. I think it's on the bottom of the ticket screen where you can click that link and see uh basically everything that is on the printed ticket. So I hope everyone checks that out and gives us some feedback so we can continue to make those kinds of improvements.

SPEAKER_01 16:58

Yeah.

SPEAKER_00 16:58

All right. Do we have any loaded questions this week?

SPEAKER_01 17:01

Unfortunately, we do not have any loaded questions this week.

SPEAKER_00 17:05

So sad. To continue the loaded questions segment, we need people to participate. So please send in your loaded questions. There is a link, actually, uh, where I listen to the podcast, there's a link that says text us, and I tested it out, and we actually do get that message. So you can text us directly. I did.

SPEAKER_01 17:23

Is that the one that said where does this go?

SPEAKER_00 17:26

Yes.

SPEAKER_01 17:28

I never got that one. Okay.

SPEAKER_00 17:30

Comes to me. So send your loaded questions to me via text us through the podcast app. Okay, one last thing. We are still looking for one more contestant for the truck rodeo.

SPEAKER_01 17:39

Yeah, it's the Iowa Ready Mix Concrete Association truck rodeo over in Des Moines, and it is a ton of fun. Steve Kellenberger signed up. So we've got one.

SPEAKER_00 17:49

So if you're out to prove you're a better driver than Steve, this is the time to do it.

SPEAKER_01 17:52

Oh, yeah. The throwdown. Yeah.

SPEAKER_00 17:55

If you're interested, talk to Darren Fick, he's the one who's coordinating it. All right. Thanks for listening to Loaded the Han Ready Mix podcast. Please remember to subscribe wherever you're listening, and we look forward to talking to you again next week.

SPEAKER_01 18:06

Thanks so much.