Paving the way to success

Concretec is paving the way to success

In 20 years Concretec has grown from an empty grass field to one of NZ’s largest suppliers of pre-cast concrete.

Concretec is paving the way to success
<p><b>Concretec’s Productivity Story</b></p> <p>Since starting in 2005, <a href="https://www.concretec.co.nz/" target="_blank">Concretec New Zealand Ltd</a> has supplied an extensive range of precast concrete products to nearly 1,000 construction projects across the country, with a purpose built factory site south of Auckland with now over 130 employees.</p> <p>‘We've been fortunate to have the opportunity to build from scratch,’ says Justin Bragg, one of the two founders of Concretec, ‘after 10 years of business operation on leased premises, we had the opportunity to purchase land to create from scratch the ideal complex, which actually began as a grass field. With ASB’s support, we’ve managed to scale our business to be one of the largest single site precast concrete businesses in New Zealand’.</p> <p>But when you think of precast, don’t think slabs of bland concrete. ‘While we produce an extensive range, we are best known for architectural and structural cladding panels,’ explains Justin, ‘which are installed on the sides of buildings such as the new 3D concrete patterned and coloured towers at Sylvia Park.’</p> <p>Concretec’s productivity story hinges on investing in their infrastructure to increase capacity and capability, to easily supply several major construction projects concurrently.</p> <p>In late 2021 they opened their fifth factory dedicated to pre-finishing that reduces work time on a building site, which allows higher quality factory processes compared to a potentially more challenging building site with variable conditions and access. This accelerates build speed, and removes hazardous site activities such as working at height.</p> <p>The key benefits of funding new infrastructure were:</p> <ul> <li>The pre finishing allows both colouring (paint or stain) of the precast elements, and for panels inserting window complete with glass – all weather tight testing in a controlled factory environment.</li> <li>Upon arrival at the site, the building appears almost complete. The absence of scaffolding makes the construction site less obtrusive, giving the impression that the building is nearly finished.</li> <li>The pre finished elements removes some of the main productivity challenges on site of managing skilled labour and downtime with weather and other variables.</li> </ul> <p>These production methods offer significant advantages to both Concretec and the head contractors they work with.</p> <p><b>Measuring productivity</b></p> <p>‘We don't have a standardised productivity metric,’ says Justin, ‘because everything varies depending on the project. For example, we could be producing a straightforward flat panel that might require six labour-hours per cubic metre, or a complex panel the same dimensions with intricate reinforcement that needs twenty labour-hours per cubic meter. This complexity isn't comparable to mass-produced items like packets of Weet-Bix.’</p> <p>However don’t think that Justin doesn’t have his hands on the tiller. ‘Our key indicator of performance is gross margin, which we track consistently throughout the business. It gives us insight into the volume of work we're handling, our future prospects, and our profitability. When tendering for jobs we consider the gross margin per cubic meter, although this figure can fluctuate depending on market conditions and the nature of the projects we're bidding on.’</p> <p>Other productivity aspects include:</p> <ul> <li>Careful layout of the factories and work flows.</li> <li>The use of custom CAD process for drafting shop drawings.</li> <li>The use of uniquely&nbsp; customised software for planning purposes.</li> <li>Construction intelligence software <a href="https://acuite.io/" target="_blank">Acuite</a> which tracks and documents quality data throughout the manufacturing process. This ensures traceability and customers can review items before concrete is poured.</li> <li>Using cloud-based tools like Dropbox for information sharing.</li> <li>A focus on health and safety including safety management system <a href="https://safetyhub.co.nz/" target="_blank">Safety Monitor</a> to track certifications manage any employee issues, and support accreditation to ISO 45001.</li> <li>Using ISO 9001 quality management systems to minimise issues and re work, and apply continuous improvement.</li> </ul> <p>Another key productivity push was created by establishing their own reinforcing factory onsite. ‘Doing this ourselves means we’ve been able to integrate our capability vertically,’ says Justin, ‘significantly improving productivity and quality. Previously, we sourced reinforcing cages from external suppliers, which sometimes led to quality issues and logistical challenges in case of problems.’</p> <p><b>Being a frontier firm</b></p> <p>NZEIR and ASB recent <a href="/content/asb/documents/en/documents/business-banking/nzier-business-productivity-report.html">productivity research</a> points at the success of ‘frontier’ firms, those that either export, are close to exporters and larger companies, or have an ecosystem of support. Concretec, though not exporting, do have a number of frontier characteristics such as:</p> <ul> <li>Sourcing concrete and reinforcing steel from large suppliers like Holcim and Pacific Steel.</li> <li>Working with smaller structural fabricators for specialised items and technical companies like <a href="https://reidconstructionsystems.com/" target="_blank">Reid Construction Systems</a> who provide lifting solutions (someone needs to erect the concrete slabs in place).</li> <li>Liaising closely with <a href="https://concretenz.org.nz/" target="_blank">Concrete New Zealand</a>, the overarching body that represents the entire concrete industry, including masonry, ready mix, precast, cement, Learned Society, and reinforcing sectors. One primary focus of theirs is low carbon concrete and zero emissions by 2050, something that smaller businesses need industry guidance on.</li> <li>Using the Auckland Chamber for networking and accessing resources on HR.</li> </ul> <p>‘The barrier to enter our market is now quite high,’ says Justin, ‘so it’s unlikely new players will come along. So we need to work with all the current concrete businesses and organisations to future proof our industry.’</p> <p><b>Productivity threats</b></p> <p>‘One of the biggest challenges we face,’ says Justin, ‘is the lack of accountability and predictability in project timelines. Delays in project starts can disrupt our workflow and impact productivity. If the government wants greater productivity and improved GDP, a big step towards achieving this is simply prevent all the little bottlenecks that create a ripple effect of delays that stop projects going ahead on time.’</p> <p>Justin’s observations include:</p> <ul> <li>The need to improve the consent process and greater transparency in project planning to streamline process.</li> <li>Even the most efficient, productive, profitable company can suffer if projects stall due to delays. This unpredictability not only affects individual businesses but also impacts the entire construction sector, resulting in considerable economic losses.</li> <li>Consistency and predictability are vital. With reliable forecasts, businesses can make informed investments and streamline operations. Certainty in project timelines leads to a more stable workflow, ultimately benefiting the entire industry.</li> <li>More collaboration with city councils and implementing peer reviews can help tighten &nbsp;the approval process and ensure more predictable project schedules.</li> <li>Sometimes delays stem from minor issues, such as engineers not delivering drawings on time or waiting for an approval. However, the consequences can be substantial, affecting numerous stakeholders from concrete suppliers to construction companies.</li> </ul> <p>‘I don't mind if a project is going to start in 3 months, 6 months or 9 months, because we can plan for that and we fit in work around it,’ says Justin. ‘What we don't like is being told it’s 3 months and then it’s 9. It creates havoc with project planning, our people are sitting around on their hands, our sub-contractors are out of work, and we need to juggle cashflow’.</p> <p><b>In conclusion</b></p> <p>There are two main lessons from the Concretec productivity story.</p> <p>First, review your own industry workflows and dynamics of doing business to identify where you can make productivity gains. Concretec invested in capital projects to bring certain aspects of their business in-house to control quality and changed the way they delivered their end product.</p> <p>Second, it's essential to emphasise that timely execution and clear communication are paramount for achieving productivity goals. Even if a company is exceptionally efficient, delays and unclear communication can lead to significant downtime and wasted resources, ultimately affecting the bottom line. This highlights the importance of refining productivity processes continuously, especially in niche industries where every aspect is unique. </p> <p> </p>