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Blog September 2020 Updated July 2023

How to create value in your building materials company

As the way we live and work changes, the building materials industry must adapt. Specifically, companies need to re-evaluate their business models. Part of any business model focuses on where and how value is generated within the organization.

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Martijn Schimmer

Martijn Schimmer

Intelligent Optimization Solution Advisor

As the way we live and work changes, the building materials industry must adapt. Specifically, companies need to re-evaluate their business models. Part of any business model focuses on where and how value is generated within the organization.

In today's environment, business models must focus on creating value through operational performance. To achieve this, digital transformation is vital.

Digitisation connects every link in the building mate

rials value chain. The systems are interconnected. The information is not stored in isolated systems, but rather converges to give you a true perspective of the operations and any other matter that you want to know about your company. It's not about process improvements. It consists of changing the way you do your business. With accurate and actionable data, your business can gain agility and achieve better results.

In a 2016 Roland Berger report, 100% of surveyed building materials companies in Germany, Austria and Switzerland stated that they had not “exhausted their digital potential”. Clearly, in the building materials industry, they know they need to make more progress. Generally speaking, building materials companies focus their digitisation efforts on production and distribution. The report does not indicate why these companies consider that they need to expand their digitisation, but what is clear is that they are not generating the value they expected. If not, they would be satisfied with his performance.

From our experience, we think we know what is happening. Some companies are not embracing all available technologies, while others are working with legacy systems.

Legacy systems create roadblocks

The 2018 AMCS Digital Transportation Barometer survey uncovered some issues facing recycling and waste management companies, one of which is that legacy systems pose the biggest challenge to a successful digital transformation.

Legacy systems have several problems. One is that they are out of date, making them difficult to manage. They require frequent maintenance and current solutions cannot be integrated into older systems without investing time and money - an impractical option when you want to cut back on unnecessary costs. Many building materials companies end up supplementing legacy systems with paper processes.

This is not digitising. And working like this does not generate value. In fact, it has negative effects on the company. Without integrated systems, the information remains on the servers of those obsolete and retouched applications, inaccessible to employees of different departments. Those systems cannot communicate or share information. The automation of the process can be slowed down, rather than accelerated.

This is how it is learned that systems integration is the first step to generate value.

How to transform operational performance

The smartest thing to do is to use cloud-based systems, such as ERP and associated modules. No initial capital investment required - scale with you; It does not require maintenance either: it is something that the supplier does efficiently.

But what cloud-based solutions can improve your business performance and therefore generate value?

Building materials logistics includes a number of very complex supply chain demands, as well as tight time frames. For example, in the ready-mix concrete sector, it is required to know the location of trucks minute by minute. It is necessary to calculate the times of load and driving, taking into account problems of circulation. There may also be waiting time, which you should try to minimize to increase efficiency. And, of course, you need to react to changes in order quantities and ad hoc orders.

Digitisation automates all of these processes. No mistakes or miscalculations. Quickly and efficiently, allowing your team to get it right the first time. Your customers will know that you understand their needs. Difficulty for your non-digitized competitors is easy for your business. That is, you can perform where others cannot.

Imagine that you had the possibility to record everything that happens during the day, be it a concrete, cement or aggregate distributor. A mobile device in your truck records everything in real-time and sends the information to the operations manager's office. He can check what is happening and respond, re-optimising the rest of the day's planning.

For ready-mix concrete, this real-time optimisation process would improve your number of loads per vehicle by up to 25%. For any building materials company, re-optimising the day's planning allows for adaptation to customer needs.

Another digital tool. Multiple stops are common, especially in the cement industry. Establishing the logical sequence of deliveries is time-consuming. The route optimisation tool automates this process for your business, providing drivers with the most efficient routes. Your company adheres to tight time frames (and at the same time reduces CO2 emissions), which shows its reliability. Hence, clients trust and turn to their services, which creates more opportunities and generates value.

With digitisation, the documentation is electronic. Everything, including certificates, photos, and signatures, can be easily accessed using a mobile device. Drivers don't have to rummage through documents. For third-party carriers, who often combine multiple jobs, it is a huge benefit that allows them to better serve customers. Again, we add value.

Transport optimisation can control the cement distributor's stock levels, so they never run out of stock and can fulfil orders. This is another example of how to take advantage of opportunities and meet customer needs.

It is also a great benefit for aggregates or aggregates. For example, the transport of some materials in certain areas requires a certificate of authenticity of the type of material and its origin. The ability to have documentation accessible when needed is essential to streamline your operations.

Contact AMCS

Digitisation provides wonderful efficiencies and brings transparency to your operations. It is not the future. Digitization is the present. It is transforming the construction sector. If you want to perform at optimal levels, you must also transform your business.

At AMCS, our extensive knowledge of industry and digitisation enables us to help you create more value. Contact us today. We will be happy to answer any questions.

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