Aggregates Manager Digital Magazine
Issue link: http://read.dmtmag.com/i/878969
18 AGGREGATES MANAGER / September 2017 T here is no such thing as too much communication when developing a production forecast. "'Over communication' is very important from a sales perspective," says Steve King, executive vice president of sales and business development at Ozinga Materials & Logistics, noting that he checks in with sales and production to track actual sales of specific materials against forecasts and adjust accordingly. Everyone needs to understand the demand signal, whether it's the end customer or the distribution point. This is especially important because of the extensive network of logistics that must be coordinated at OM&L, which include water, rail, and truck shipments, as well as mobile and contract processing. "Everyone needs to be aware of anything that may cause a problem, such as too much or too little inventory, and understand the sensitivity of each request to make sure we are meeting the customer's needs," King says. "We accomplish this through both formal weekly, quarterly, and annual team meetings and informal communication — text and phone calls." Informal communication is an effective way to share hits and misses. A hit may be a project that the company wasn't expecting to get or a higher-than-antici- pated production reap, while a miss may be unforeseen equipment breakdown or a service failure. "You need to pay attention to the little things," King says. "If you do those things well, it all pays dividends throughout the process." Everyone needs to discuss how things are going and share observations, such as what has been run through the pit and what may need to be adjusted. This communication better serves customers and enhances the business as a whole. "Communication, and over commu- nication, will ultimately help us with the production planning process," King says. "It enables us to be able to meet, and hopefully exceed, the needs of our customers." E ffectively planning for production is not a one-size-fits-all ap- proach. Geology and geography factor into developing a production fore- cast, but it's also about understanding what your lifeline is, whether that may be housing starts or state DOT projects, says Ed Van Poucke, chief operating officer for Ozinga Materials & Logistics,. Individual construction projects don't typically influence material forecasts, particularly if the project requires a mainstream product, but a customer need for a non-mainstream product may require planning. Another exception would be if need could arise based upon micro versus macro factors, as was the case for OM&L with the I-90 Tollway project in Chicago. "If you can predict everything in the market is going to get sucked into a project, places normally served out of that project would move to different areas," Van Poucke says. "Prices would tend to rise for the duration of the project. If we saw places running out of material, we would adjust and figure that into our planning process for pricing and production." Accurately predicting materials de- mand is also about developing customer relationships. "It's difficult to check in with every customer all the time, but you need to stay in touch with them regular- ly," Van Poucke says. "You should have a good idea of what is going on in their business without being a nuisance." He says his customers will call to tell them about special upcoming needs so they can plan for a specific volume. "This is a real relationship-based process," Van Poucke notes. Otherwise, it can be diffi- cult to get numbers to use for planning, especially since some companies can be skittish about sharing this information. "As you develop good, trusting re- lationships, they learn that the better they can help predict things with us, the better we can help serve them," he says. By understanding the changing market needs, it's easier to stay well stocked and ready to respond. T o balance the overarching needs of sales and production in a forecast, both groups need to understand that they are after the same goal — profitability — and physically sit down to communicate. "There is a natural stress between production and sales," says Joel Galassi- ni Cemex regional president – Texas Re- gion. "It seems like sales always wants to sell more of the products that are difficult to make, and production wants to produce the products that are easy to produce. Left unchecked, animosity can form between the two departments." The physical nature of the conversa- tion reduces animosity that can occur on calls or an email string, he notes. Both groups should come prepared. Sales should develop a forecast by product, and the production team should provide accurate inventory information."- By making both groups accountable for producing something, everyone tends to have some 'skin in the game,'" Galassini says. "It cannot be a situation where one group presents to the other and then gets beaten up the entire time. This will quickly create a dysfunctional team." A plant can be overwhelming with the numerous products that can be produced. "I have found that it is a lot easier to understand what the bottle- neck product is," Galassini says. "Once this has been identified, then produc- tion planning becomes a lot easier to determine." Identifying a bottleneck enables sales and production to have a more mean- ingful conversation about the effects of the planned production. "The two groups can determine if that sales portfolio is desirable in light of the other products that have to be produced and the hours required to operate the plant," Galassini says. "The two groups talk at least twice per month, dealing with facts, not emo- tion. These conversations build overall trust, and together, the two groups can often find great solutions to problems once thought too difficult to tackle." Voices of Experience Steve King Ed Van Poucke Joel Galassini