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Kanban inspiration for US concrete contractor

30 November, 2005

This case study is based on a private contractor who bids on projects from the City and County of San Francisco, the Public Utilities Commission, as well as the Water Department in the U.S..

(See also: What is Kanban)

Most of these jobs include concrete of a well-defined and widely-used kind (we call it 'commodity concrete') though quantities are usually small in comparison to what is needed for residential or office building projects.

As one can imagine, the City imposes limits on working hours in order to avoid congestion during peak traffic times, excessively long closure of a road for vehicular- or of a sidewalkfor pedestrian traffic, undue inconvenience of road users, and complaints about noise from citizens or area residents.

In addition, contractors must obtain a work permit (or working tag) from the city in order to work at a specific location.This contractor’s main concern has been the tardiness of deliveries made by batch plants.

Because most of these jobs have restricted working hours, punctual delivery of concrete is of paramount importance. However, because each order is small (a few cubic yard at a time), this contractor cannot get any plant’s attention.

When plant trucks arrive late to his jobs, he loses that time for the concrete to set and may therefore not be able to open the site to traffic when needed. To achieve on-time performance, this contractor has acquired a fleet of small (5 to 7 yd) revolving-drum trucks as well as dump trucks (used to fill ‘potholes’ with concrete) to meet his projects’ concrete transportation needs.

The latter trucks are not so good as the former for transporting concrete as the mix may segregate. This contractor has its trucks pull into any batch-plant during operating hours and orders concrete.

The contractor-owned trucks simply join the line of plant trucks waiting to beloaded. The driver then goes to the operator’s walk-up window and orders the needed mix design and quantity. The batch plant fills these trucks in the same way as it fills its own, in a first-in-first-out manner.

The contractor then gets billed on a regular basis for exact amounts loaded. At the site, the driver works with the crew in placing concrete. Providing one’s own ready-mix trucks does not mean that the unit price of concrete is any cheaper but it overcomes many scheduling hassles.

No advance order needs to be placed to reserve plant capacity as only a few cubic yards of commodity mix are needed each time. By taking control over the transportation process and using trucks as kanban each time concrete is needed, the contractor’s crews can work at their own pace and not have to fret over when concrete would arrive.

This kanban system works well especially on these projects where timing of need is not dictated exclusively by the contractor, but, as is the case here, also to a significant extent by the owner. This contractor thus controls what is otherwise a system variable controlled by an up stream supplier, namely the batch plant’s delivery of concrete.

As a result, the contractor can better schedule his work and be more reliable in making project due dates. Should one batch plant not be available to serve his needs, he can easily go elsewhere (though the number of plants covering any one geographical area is usually limited).

The contractor pays for this ability. He now needs to have capital tied up in trucks and is responsible for hiring and training drivers. Because he has a fairly steady need for concrete from one project to the next (contrary to many other contractors who need concrete only for one phase of their work) he can keep them gainfully employed.

Source: Lean Construction Institute

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