The Power of Telematics

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For anyone in the construction business, there's awareness that heavy operating equipment such as backhoes, excavators, mixers, forklifts and cranes can be extremely expensive. And when this cost is considered, it quickly becomes apparent that protecting these assets is crucial.

The concept of telematics may have originally started as a GPS tracking tool, but in recent years, it has become the `go-to' technology for constructionrelated businesses to maximize the overall value of their equipment.

And some of today's telematics solutions even give managers the ability to track their on-highway and off-highway vehicles without the hassle of juggling multiple, complicated systems--some of the newer, cutting-edge technologies deliver this valuable data all within one, easy-to-use system.

Telematics has quickly evolved into a robust business management approach that has helped contractors reduce costs, `lean' operations, and ultimately gain competitive advantage. In fact, for some, the technology has become as crucial for their operations as the backhoes and bulldozers themselves.

Telematics systems can collect and analyze thousands of data points related to equipment performance, and can help fleet operators reduce fuel consumption, improve equipment utilization and asset allocation, create accurate job bids, optimize preventive maintenance schedules and much more.

This advanced technology not only enables companies to boost their fleet utilization efficiency by tracking equipment, saving time, fuel and overall machine wear and tear, but can optimize preventive maintenance and reduce environmental footprint--all while simultaneously trimming costs.

The valuable data generated from telematics technology--including systems that provide location, operations and performance data for both on-highway vehicles and construction heavy equipment from a single interface--can help fleet and equipment managers:

Shrink Fuel Budgets
Diesel fuel costs are now an average of $3.87/gallon (and climbing), so every gallon saved counts more than ever. With fuel accounting for nearly 50 percent of an asset's operating costs, insights into fuel usage can play a critical role in eliminating waste, reducing carbon emissions, and even gaining green certifications that are increasingly required for job bids today.

From detecting excessive idling and unauthorized equipment use to eliminating unnecessary mileage for on-road support vehicles, many fleet managers today report that telematics systems help reduce their company's fuel consumption and associated costs by nearly 12-15 percent.

Reducing idling is another major ROI driver. Unfortunately, some off-road, mobile workers still think it's okay to keep a fleet vehicle idling since there is always a chance it may not start back up, or that turning it off and on will cause increased wear and tear. While this may have been OK when fuel was $1 a gallon and the environmental impact was not as apparent, times have changed. Now, running a vehicle 80 percent of the time when it's not actually moving is unacceptable from a financial, environmental, and sometimes legal perspective.

GPS-based telematics systems measure idling by lack of movement, as well as whether a machine's ignition is on or off. Idle reports can document start and end times, duration and location for each vehicle, offering at-a-glance identification of the biggest fuel wasters in a company. Additionally, system dashboards can display real-time idling rates across an entire fleet, complete with visual indicators when levels surpass user-defined thresholds.

With this critical, real-time data on hand, job managers and foremen can immediately intervene, addressing the problem, or taking steps to resolve the operator's behavior. Some contractors have reported cutting idle time by 35, 50 and even 75 percent when utilizing these strategies, easily paying for the cost of their telematics systems in idle reduction alone.

Minimize Theft Incidents
Every year, billions of dollars worth of construction equipment is stolen from locations around the globe. In the world of telematics, geofencing is commonly used a type of electronic security guard.

Simply an "electronic fence" created with telematics software, a geofence can have a substantial impact on a company's bottom line. It works like this: Equipment managers find their job site on a system map (by address or scrolling to a map location) and use the tools provided in the telematics system to outline the perimeter. They then close the box, name it, assign it to a machine of choice, and it's ready to go.

Telematics is useful for monitoring operators or subcontractors who may temporarily "borrow" an excavator to dig a hole for a friend's swimming pool, or a foundation for a side job. In addition, the technology helps managers determine whether operators with a split shift leave for the second site on time, or even for tracking equipment that operators are borrowing with permission.

For example, if a machine equipped with a GPS tracking unit strays outside of its geofence-assignments boundaries, the movement can trigger emails or text alerts indicating unauthorized use, or that a theft is in progress. Contractors have used these tools to successfully retrieve millions of dollars worth of stolen equipment, and in at least one case, lead law enforcement officials to a large shop filled with yellow iron, including a $100,000 backhoe whose GPS signal pointed the way for authorities.

The result is an early warning system that combats one of the major causes of low construction equipment recovery rates: delays in discovery and reporting theft. The GPS information transmitted from each asset to the back-end telematics software allows missing machinery to be traced anywhere in the U.S., and in some cases Mexico and Canada, right down to a specific street address.

These tools can virtually eliminate delays in discovering and reporting equipment theft--a major reason that fewer than one in five of the 13,374 pieces of heavy equipment reported stolen in 2010 were recovered.

Telematics technology can strengthen a company's theft prevention, and provide significant new tools to facilitate recovery of stolen equipment. This translates into savings on equipment rental and/ or replacement, downtime, project-delay penalties, and potentially higher insurance premiums in the event that a piece of valuable machinery disappears.

Provide Better Fleet Utilization Methods
The ability of telematics to ensure the accuracy of utilization records puts fleet managers in the driver's seat when it comes to getting paid for every scoop of a backhoe or scrape of a grader. With reliable data used to generate system reports, mangers have foolproof visibility into which machines are unused and underused. Advanced telematics systems can give precise documentation of equipment usage by job site for job costing, chargeback and future bidding purposes.

Telematics can be used to help maximize equipment productivity and overall profitability with better asset allocation. Equipment utilization reports can provide daily, weekly and/ or monthly usage information, as well as total current hours for each piece of machinery, enabling at-a-glance identification of assets that are not operating at adequate capacity. Monthly reports can be manually or electronically transferred to company spreadsheets for a longerterm perspective.

And while some machine downtime is unavoidable, the daily and weekly data is valuable for fleet managers to pinpoint underutilized assets on one job site that can be put to better use on another.

For example, if a job foreman needs a medium-size bulldozer, a quick look will reveal which assets in that category have logged the fewest hours for the past week or two. (Reports are updated automatically so the data is always current--another advantage over traditional paper-and-pencil collection with potential data entry delays.) The closest underutilized dozer can then be transported to another site, avoiding the expense of equipment rental.

Telematics also can help improve equipment utilization by determining the optimal mix of rented and owned assets based on careful analysis of the system's utilization reports. The data can be used to forecast future equipment needs based on projects in the pipeline; determine whether the capital expense for fleet expansion or upgrades is justified; figure out whether to sell current assets that are underutilized rather than carrying them on the books; or, decide if money is being wasted on equipment rentals a company truly does not need.

For example, one contractor, Missouri-based Emery-Sapp & Sons, reported major benefits in this area. With 224 pieces of heavy equipment, Emery-Sapp previously had a large rental fleet--at an average cost of $12,000 per month per asset--to ensure coverage for public works and site development projects in five states. However, since implementing telematics, the company slashed its asset rental costs by hundreds of thousands of dollars a year through better tracking of its own assets, as well as more targeted use of rental equipment.

At the end of the day, this advanced data and the resulting insights into fleet performance can help managers squeeze more productivity out of equipment and, by association, more profitability out of operation.

Telematics technology is more than just turn-by-turn navigation; it is the most valuable tool a fleet manager can utilize in today's ultra-competitive market.

These robust platforms provide visibility into various aspects of fleet performance that frequently cannot be gained any other way.

In an industry that depends on getting the most bang for the buck out of every bulldozer, tractor and backhoe, telematics technology can provide visibility into equipment usage, location and status that enables better management and less downtime, ultimately increasing a company's bottom line.

Steve Blackburn is VP North America of Navman Wireless.

A 1.938Mb PDF of this article as it appeared in the magazine—complete with images—is available by clicking HERE

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