Against All Odds

Jefferson Concrete Goes Over the Top

by Richard Ries

Think you face challenges?

Consider what Jefferson Concrete in upstate New York has to deal with. They're located in Watertown, a little burg with fewer than 25,000 souls. To the west is water, 7,500 square miles of it, in Lake Ontario. To the north, Canada. To the east, the sparsely populated Adirondack Mountains.

Winters can be brutal. December, 1985, for example, brought 119 inches of powder, giving Watertown a much deeper appreciation of the term "lake-effect snow."

It's not all bleak. Head south and you find population and a market for your products. But you have to beat the businesses from Syracuse to the punch.

How did Jefferson Concrete survive and thrive in this business climate?

One word: diversification.

"We take advantage of the total variety of marketplace in this area," says Mark Thompson, vice president of administration for the company. "We have to. We certainly don't have the population base up here to stimulate a lot of further growth without diversifying into these other product areas."

What other product areas? Everything from flower pots to field latrines, from burial vaults to cattle passes. During our interview, Mark and the company's vice president of manufacturing, Tim Queior, compiled a list of product categories and offered comments on each.

Burial vaults would seem to be a steady business, and for the most part they are. But Tim points out that the trend towards cremation is cutting into that business.

Agricultural products include everything from horizontal silos to cattle pass-throughs that are installed under roads. A growing segment of this market is manure lagoons.

Although this market is fairly stable, change is occurring here, too. As in most areas of the country, agricultural land in Jefferson Concrete's service area is being lost to housing developments, shopping centers, office buildings, and roadways to connect them all. The movement away from family farms and toward fewer, larger corporate farms is another factor.

The agricultural market is also controlled by intense price pressure; farmers just don't have a lot of money to throw around. Reminded of the old saw that the farmer is the only person in business who buys at retail and sells at wholesale, Mark laughs ruefully and says, "That's too true."

Infrastructure items are doing well for the firm. Some of these products go to utility companies and include utility vaults, transformer pads, and light pole bases. Others are intended to help meet Environmental Protection Agency requirements. These include catch basins and holding ponds for stormwater runoff, oil and water separators, and grease traps.

Wastewater systems include residential septic tanks, commercial septic tanks, and custom systems to 70,000 gallons. Tanks for these systems can be 14 by 32 feet in size.

Precast curbing and gutters, barriers and parking chocks are some of the smallest items produced for this market. Some of the biggest are culverts and bridges.

The infrastructure market has been doing especially well since New York state passed a bond issue last year. Since then, demand for manhole and drainage products has increased significantly.

A precast basement wall system licensed from Kistner Concrete is one of two areas where Jefferson Concrete has seen rapid growth. Precast wall systems are becoming increasingly popular due to the ease and quickness of installation. There's no additional time or labor spent on insulation or furring the wall (although a moisture barrier must be added on site). Also, since these types of systems are produced in a controlled environment, production continues regardless of weather, which is a high selling point in upstate New York.

Military equipment is the other area of increased activity. Nearby Fort Drum has been on an expansion program for some time, and Jefferson Concrete has been there to capitalize on that growth.

Products for this market are as diverse as the military itself, and include everything from latrines to retaining walls, the longest of which was over two miles. Specialty products abound, such as the dummy land mines. One team of soldiers practices placing the dummies, while another practices finding them.

Perhaps the most unusual products built for Fort Drum are the target coffins. These house cutouts of soldiers, jeeps, and other targets, which are raised and lowered by an automated, computer-controlled system. The site is used for practice not only by infantry, but also by tank troops. "It's a giant arcade," says Mark.

Working with the government is hardly a bonanza. There are long lines of hoops to jump through in the form of paperwork. The limited production numbers mean there's no economy of scale. And how much would you invest in the military market while base closures are continuing?

Why bother with Fort Drum at all? Again, in a limited market, you have to make the most of what you have available.

End-user products for the residential market is an area poised for growth, according to Tim. These include benches, picnic sets, patio blocks, and similar items. One surprisingly strong segment is that of retaining wall blocks. Homeowners are building these walls for both drainage control and landscaping reasons, and the demand has really taken off.

"This diversification has been our saving grace," says Tim. "If the agricultural market is booming for a little bit, we're there. If municipal work takes off, we're there. If it's a military project, storm and sanitary, whatever, we're there."

Jefferson Concrete also installs virtually anything they pour. Part of the reason for this is to create another revenue stream. But more important is the ability to make sure products are handled properly. "Concrete is very durable," says Tim, "but we feel it's the most abused building material out there. We feel that by handling our own products there's less damage." Mark adds that many contractors lack the equipment and expertise needed.

Imagine a scene where a contractor is wrestling an item into place using brute force and lots of four-letter words. The piece dangles from a backhoe, swinging back and forth like an angry gorilla in a cage. The backhoe operator, who can move dirt with the best of them, is struggling now. He finally lowers the piece into the right spot, more or less. Now the contractor resorts to beating on the concrete with a sledge hammer and an assortment of two-by-fours until it drops into its final position.

Now imagine a well-trained crew who place more precast concrete in a week than most contractors do in a year. Imagine them finessing the piece into place quickly with the right tools, the right equipment, the right techniques, and with no damage. Who do you want putting your products into service?

Finding the right people for that crew and for production work isn't easy, especially in upstate New York. Forget about waiting for someone to come along with years of experience, says Tim. He notes that fewer than ten percent of the people they've hired had a background in what they would be doing for Jefferson Concrete. The trick is to find the right people and then train them well.

How do you find them? Tim looks for a farming background. "Those people know the meaning of hard work, of staying at something from sunup to sundown." They also have good mechanical skills.

Once the person is hired, training begins. Much of it is done in-house, and much is done outside the shop. For that, Tim and Mark rely on vendors and associations. Tim points out that Jefferson Concrete's level of training and certification is much higher than that required of vendors for New York's department of transportation. There's also cross-training of employees, driven by the belief that employees who understand one another's jobs work better together.

Why this emphasis on quality employees? Tim and Mark see it as the logical means to an end, which is quality products. "The strength of concrete is measured in psi," says Tim, "but we know the real strength comes from our employees."

Jefferson Concrete faces the same risk with its investment in quality employees as any other company: what happens if they leave? According to Tim, few do. Mark points out that the company offers bonuses, good benefits and a comfortable work environment. Although wages are at the lower end of average for the industry, ample overtime makes for big paychecks.

The company has also found ways to work more months of the year. The Thermal-Krete wall system helps, as does the goal of using slow times to stockpile regular inventory. As a result, only a half-dozen or so of Jefferson Concrete's 35 to 40 employees get laid off in winter, and then only for a few months.

"The bottom line," says Mark, "is that we offer our employees continuity and longevity. That keeps them here."

Competent employees are just one part of the quality equation. The other is good equipment. Jefferson Concrete had the opportunity to make a big commitment to new equipment 10 years ago, although managers with a different outlook might have seen the occasion as more of a disaster than an opportunity.

In November of 1987, a catastrophic fire swept through the facility. It was at the height of the buildup at Fort Drum, and the company was already scrambling to keep up with demand. Although few suitable building sites were available, the owners found one and in June, 1988, moved into their new, 25,000 square- foot digs.

Part of the new operation was a fully automated, computerized production system. "It has worked beautifully," says Mark. "There are no negatives [to automation]."

Tim illustrates the quality of their products with some figures from a job done for the New York DOT. The NYS DOT required core sampling every 75 cubic yards. In the 16 required samples, average air content deviation was less than 0.3 percent. In fact, in the five years since NYDOT began sampling, Jefferson Concrete has been first in the state for quality every year.

Good people and quality products don't guarantee a healthy company. If you're just trading dollars with your customers or, worse yet, losing money, all the quality in the world won't keep the doors open.

"You have to stay on top of things," Mark says. He recommends reviewing a monthly profit and loss statement. "Doing it quarterly or twice a year or once a year isn't enough. By the time you discover a problem, it may be too late to correct it. At the very least, you've already lost money."

Both men emphasize the importance of controlling costs, starting with payroll. Isn't that odd advice coming from a company that prides itself on providing lots of overtime?

"It's cheaper to pay overtime than to train workers just for peak periods," says Tim. "Overtime is also less expensive than loss of quality to unskilled or inexperienced help." He uses a 36-foot span, three-sided bridge member as an example. If that component doesn't meet specifications, it's a $4,000 loss for the company. "I can buy a lot of overtime with four thousand dollars," notes Tim.

Staying on top of changing markets, responding to disaster, and developing sound business practices keep Jefferson Concrete busy. How do they manage to stay abreast of industry trends when they're a million miles from nowhere?

"Associations," says Mark. "That's where we get most of our information." Tim chimes in with a list of a dozen associations to which the company belongs. Some are a bit esoteric, such as the National Burial Vault Association and its New York state equivalent.

The list includes local groups, such as the county builders' associations for Jefferson and the surrounding counties. There are also state and regional affiliations as well as national, including the National Precast Concrete Association.

"We look to NPCA for what's new and innovative in the industry," says Mark, "and whether it fits our organization. It's been a tremendous source of information."

Mark has been in the precast business since 1977, Tim since 1981. With 36 years' experience between them, it seemed appropriate to ask what they consider the most significant developments in the industry over the years.

First on their list are admixtures, and first on the list of admixtures are those with corrosion inhibitors. The corrosion inhibitors allow the use of noncoated rebar. The problem with epoxy-coated rebar, says Tim, is that it requires so much care to avoid bruising the coating. Once the surface is damaged, it has to be repaired, which adds time to the job. And that's assuming someone spots the problem in the first place. "Someone has to catch that," says Tim, "and hopefully it's us before it's an inspector." He says he's eagerly awaiting the imminent release of the next generation of admixtures.

Next on their list is grade 80 steel. This stronger material allows them to reduce the steel in their products by 25 percent. But the better steel illustrates another point on Tim's list, the improved communication between vendors and buyers.

Tim says Jefferson Concrete's vendors go out of their way to explain the virtues of new products, and to help the company understand how those products can improve profit and performance. In turn, says Tim, he can take that information to engineers and product specifiers and help them understand the advantages. Everybody wins, he notes, when information flows freely.

The next development Tim mentions is environmentally-aware, water based mold release agents. These products have two distinct advantages. First, they're more pleasant to work with. Employees don't have smelly, oily petroleum distillate residue all over their hands and clothing. Second, the new release agents produce a superior finish, one that is glossy and milky white, more like polished marble than poured concrete. And because these agents have better body and adhesion, they don't puddle at the bottom of the mold.

Last on the list of significant developments is automation and computerization. In the 10 years Jefferson Concrete has used automation, says Mark, consistency of moisture, weights, and yields remain high.

Jefferson Concrete is proof that you can succeed, that you can excel, in the face of long odds. You can do it even if you get nearly ten feet of snow in one month. Even if you're in a remote, sparsely populated area. Even if you have to beat the bushes looking for unique markets. Even if your business is burned to the ground.

All it takes is dedication to your people and your product, and a willingness to try something new. That, and a reliable snowplow.