Do Dealers Hold the Keys?

May 22, 2014

If you doubt the power of telematics to manage fleets of construction equipment, doubt no longer. And if you wonder who has the most to gain from that power, consider the recent report from Reuters that Caterpillar has thrown down the gauntlet to its dealers.

It appears Caterpillar has put a multibillion-dollar price tag on the services that its dealers could provide if they were to take full advantage of telematics systems embedded with their customers’ equipment fleets.

For those following the development of telematics as a fleet asset-management tool in recent years, dealer involvement is no surprise. Who best to be able to respond to machines in trouble, alerted via telematics?

It’s part of the reason the Association of Equipment Management Professionals developed its original standard. Its members didn’t like the idea that the manufacturer (and, by extension, dealers) had access to data from equipment they owned. The Association of Equipment manufacturers joined the telematics discussion this year in part to represent its members as end-users pressed this point.

Manufacturers know how valuable and useful machine data are. At Conexpo, everyone else began to understand how valuable and useful. Even as Caterpillar, Komatsu, John Deere, Volvo, Case (now Wirtgen and Liebherr in Europe) work with end-user groups, they have been working individually to assemble services that allow dealers to offer equipment-management programs based on monitoring and responding to telematics data.

As manufacturers and end-users work through the various issues surrounding data and data security, the industry stands ready to take full advantage of telematics as a management tool. Dealers will play a key role.

Maintenance and repair are not core competencies for most fleets. Yes, it’s a responsibility, but the more important competencies center around asset management. Equipment managers need to know when to rent or purchase, how to compute and manage owning costs, and when repair costs are too high. They may not need to schedule field-service calls, worry about hiring qualified technicians, or manage the overhead of a shop facility.

Caterpillar is on to something. Any manufacturer threatening to terminate dealer agreements—even with arguably the most successful dealer organization in the world—recognizes the upside to its challenge.

End-users must consider dealer service programs that come out of the telematics explosion. Dealers may be set to make money, but fleets will be able to cut costs. The decision depends on the balance.

About the Author

Rod Sutton

I have served as the editorial lead of Construction Equipment magazine and since 2001. 

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