Serious pull

Trucking costs are a much-overlooked area of winning asphalt paving bids. The companies that are focused on this are winning more work and making more money. Why, you ask? This is the No. 2 cost of laying asphalt, that’s why. Costs of laying asphalt are:

1. Cost of materials = 70%
2. Cost of trucking = 15% and growing
3. Cost of plant production of asphalt = 10%
4. Cost of laydown operation = 5%

How much time do you devote to controlling costs in areas other than trucking? How many of your people tell themselves, “We contract out trucking so we can’t really manage these costs like we can our own?”

When we started asking our paving customers what their cost of trucking was we found some significant issues. In some cases there was a general lack of understanding of current cost. There was a definite feeling that there was nothing that could be done to improve the operations. Methods known were not pursued. Lastly, there was a lack of effort to achieve continuous improvement.

We examined factors that have increased trucking costs over the past few years and found increased fuel and fuel tax, much higher equipment cost, increased licensing fees and exponentially increasing insurance costs. Regarding labor, we discovered higher labor cost while regulations have increased (limiting the number of hours a driver can be on the road), a lack of driver training, delays in the trucking cycle and congestion and higher driving costs.

The cost of diesel fuel was $1.55 per gal in January 2004, $2.46 in January 2006 and $3.05 in October 2007. This is a 97% increase since January 2004. What do we need to do about this?

• Control excess idling (check engine manufacturer’s recommendation);
• Maintain truck performance;
• Ensure proper tire pressures;
• Shorten the haul cycles; and
• Find the most economical haul route.

Truck acquisition costs have experienced double-digit price increases over the past few years. Truck manufacturers by model year have been:

• Freightliner 21%
• Paccar Corp. (Kenworth-Peterbilt) 19%
• Volvo-Mack 17%

Last year alone, the average increase was 16% across the board as Tier III engines and the escalating cost of steel hit full stride in price increases that got passed to the contractor.

Waste away

With all these costs increasing, what are we doing to control this? Given my background in manufacturing, I looked at this as a production cycle and tried to apply the new lean manufacturing techniques we utilize at Astec Industries to the process. Simply put, lean manufacturing is the elimination of waste. You look to eliminate the waste you see in your production cycles and push them out of the value-added stream. Customers do not want to pay for trucks waiting to be loaded or unloaded at the plant or the jobsite. They do not care if your trucks are stuck in traffic. They only see value when the wheels on the truck are turning hauling asphalt.

What are the seven elements of waste as defined by lean manufacturing?

• Overproduction;
• Transportation;
• Motion;
• Waiting;
• Unnecessary processing;
• Inventory; and
• Defects and rework.

How do we attack the seven elements of waste to assure maximum value added for our customer and best overall bid amount?

• Sort and remove unnecessary items;
• Simplify work procedures;
• Standardize work procedures;
• Sweep and clean work areas;
• Stick to process, follow up, continuously improve (requires much discipline); and
• Be safe. Eliminate loss time due to unnecessary accidents.

For example, we are going to assume a process exists for delivery of mix from the plant to the paving operation. First of all, it is important to get someone’s name on this process. Do we have a young engineer or an ambitious truck driver who will take over management of the fleet? We need to designate a leader of this group who will give it direction.

Second, our go-to person will occasionally ride with the truck drivers to evaluate areas for improvement and set goals for each driver each day by having a map delivered with the most efficient route (not to be deviated from).

Overproduction

How do we assure we have the correct number of trucks on the job? We need enough trucks so that the silo at the plant is not full all the time, and not too many trucks (overproduction) so that the silo is empty and all the trucks are stacking up out at the paving site.

First, we will determine the route and time it takes for a round trip (see “Transportation” below). Then we need to determine the correct number of trucks given the haul route and time needed to deliver 240 tons per hour. At Roadtec.com under “Training” you will find a Microsoft Excel spreadsheet titled “Paving Calculator” that will assist you with plugging any delays into your routing on an hourly basis. This way you can perfect the number of trucks needed during different times of the day. Always allow yourself access to some additional trucks during peak traffic periods of the day. (Have them haul rock during midday, or use part-time drivers for a short shift in the mornings and afternoons.)

Transportation

Next, we must map the routes, looking at elevations to be climbed versus most efficient routes that can be mapped. There is good routing software today that makes this easy. Garmin makes an approximately $100 package that is very effective, and there are many web-based solutions that are free to download daily. Take time to have someone lay out an expected route that needs to be traveled. Take into account traffic congestion, elevations to be climbed (while the truck is loaded), school traffic, etc. If everyone travels a different route to the paver and back again, how can you expect a uniform, consistent, smooth delivery of trucks to the paver and returning to the plant?

After you have a good route established, you should drive it once to assure you have not missed anything. Make sure you have written a “living document” of up to seven simplified work procedures. An example of a living document is as follows: “All truck drivers will receive a standard mapped or written route to and from each and every jobsite. It is expected all drivers will follow this route to create a complete, consistent and uniform flow of material to and sometimes from the jobsite (in the case of a double haul). This timing is critical to the success of our daily operations.”

Motion

In the elimination of unnecessary motion, we must further use our elements to reduce waste. An example of a simplified work procedure here could be to make sure that drivers do not get out of the truck at the jobsite or at the plant unless absolutely necessary. Truck drivers outside the truck at the jobsite can mean safety issues, which definitely create waste. Keeping truck drivers in the truck at the plant with automatic truck bed spraying, automatic truck bed tarps to cover and uncover the load, ticket printers located within arm’s reach of the driver-side window of the truck and automatic truck sampling all contribute to reducing the trucking cost by keeping the truck wheels turning. Remember, we don’t create value for our customer unless the wheels on that truck are turning hauling to or from the jobsite. Truck drivers outside of the cab are all wasted motion. Keep all areas clean inside and outside the truck. A cab cluttered with old maps, magazines, newspapers and sandwich wrappers only creates confusion and safety hazards for the driver. This too creates wasted motion inside the truck, which can create delays in trucking, lost routes, loss of concentration, etc.

Waiting

In addition to the wait times listed above at the plant, how many of you start all your truck drivers at the same time each morning? This creates hours of wait time as they queue up to be loaded at the silo or plant. Queue each driver to start per the recommended time per the production rate of the plant and the usage of material at the paver. If you have a 240-ton-per-hour plant running for a 10-hour day of paving, with 85 minutes of cycle time, and trucks hauling 20 tons per truck, you need 17 trucks. With the 85-minute haul time divided by 17 trucks, you should start one truck every five minutes for the first 85 minutes each morning. In our example, if you save half the cost of 17 trucks for each first full cycle each day, you will save (85 minutes x 17 trucks x $1 per minute ÷ 2 = $722 savings) every day by just staggering the start time.

How do we reduce the waiting times in all functions? That is our assignment.

Unnecessary processing

Having too many trucks on the haul is a good example of unnecessary processing. You may start the day with additional trucks due to congestion in the morning, but as soon as you have a silo that is starting to look empty, then it is time to put one or two trucks hauling rock in town or divert them to another area where they can be efficient.

Maximize haul weights by using scales at the plant. Don’t send 20-ton trucks out with 19 tons on them repeatedly throughout the day. Hauling without a full load is unnecessary processing. Buy trucks with less net weight so they can haul more gross weight.

Managing inventory

How do we keep the trucks from waiting in line at the plant to be loaded or waiting at the paving site to be unloaded? Watch your silos—if they are always running empty, you have too many trucks on the haul; if they are always full and you have to stop the plant, you need more trucks. Again, silo management is very important to efficient operations.

Managing inventory at the paving operations by creating a jobsite storage capacity (material transfer vehicles, hopper inserts, windrowing) at the paving operations can release the trucks quicker and keep them hauling rather than keep them attached to the paver to unload or queuing in line to be unloaded.

End the day with a full silo. This creates a good jump on the next morning’s job. It smoothes the labor cost throughout the day and creates time to perform maintenance on the plant in the afternoon. Remember, 95% of all plant breakdowns occur at start-up in the morning. Give yourself some time to address start-up issues while pulling from a full silo in the morning.

Defects and rework

Lost trucks, trucks deviating from the planned route, rerouting due to unplanned traffic jams and not planning the correct number of trucks the day before—all are defects that create rework. Avoid these at all costs with proper planning and execution.

A top bottom line

In summary, remember first to put someone in charge of the truck drivers (get a name on it!). Calculate the correct number of trucks needed each day and for each time of the day. Stagger start times of each truck. Double-haul millings when possible on mill-and-fill jobs. Keep the truck drivers in the trucks with the wheels rolling. Take a ride with the truck drivers yourself to look for ways to eliminate costs. Write simple standard work procedures for truck drivers to follow. Stick to the process of attacking the seven elements of waste (requires discipline). This continuous improvement process is producing better bottom lines for many contractors today.

I know people who have reduced their costs of trucking from $4.50 per ton to approximately half of this by managing the trucking operation most effectively. Think about this: How many tons of asphalt did your plant produce last year? If you could have made another $2.25 per ton by reducing the cost of trucking, what would that have done to your bottom line?