The Power and Potential of Telematics


Construction Telematics

The Power and Potential of Telematics

At the recent telematics conference in Nashville, Tenn., sponsored by the Association of Equipment Management Professionals (AEMP) and the Association of Equipment Manufacturers (AEM), many of the speakers gave the nearly 300 attendees a glimpse into their companies’ use of telematics, demonstrating the technology’s power and potential.

“There’s usually a point in the equipment owner’s experience that becomes a breaking point for the decision to implement telematics,” says Daniel Samford, CEM, vice president, corporate equipment, Herzog Contracting. That point for Herzog, he says, involved a project change order that caused additional equipment expenses beyond the project-bid scope. The project owner challenged Herzog’s claim, which amounted to significant dollars, says Samford.

AEM/AEMP 2014 Standard Data Fields

1. Serial number

2. End-user asset ID

3. Hours

4. Location

5. GPS distance traveled

6. Machine odometer

7. Fuel consumption

8. Idle time

9. Fuel level

10. Engine running status

11. Switch input

12. PTO hours

13. Avg. load factor

14. Max speed

15. Ambient air temperature

16. Load count

17. Payloa totals

18 Active regeneration hours

19. Fault codes (42)

“We were trying to show our equipment costs to the owner to be compensated for expenses relevant to the claim,” says Samford, “but our internal documentation wasn’t sufficient. At that point, we realized that if we’d had telematics on those machines, we could have sufficiently documented how long the equipment was physically on the project and its status.”

According to Tim Morgan, equipment foreman for Branch Highways, a primary reason the company implemented telematics was the sheer challenge of geography—keeping tabs on 250 major pieces of equipment working over the entire Mid-Atlantic region.

The decision to implement telematics for Cincinnati-based Rumpke Waste Services, says equipment supervisor Daryl Crear, was prompted by the high incidence of engine failure in loaders at transfer stations, where debris plugged machine coolers and engines overheated before anyone took notice.

Recognizing that telematics could help avoid such incidents by providing timely alerts via text or e-mail about abnormal operating conditions, Rumpke began implementing the technology, starting with high-dollar machines that run every day, says Crear, and focusing on four key data points—working hours, idling, overheating, and air-cleaner restriction.

“Now, when I get a telematics alert about engine overheating,” says Crear, “I immediately call the facility involved and typically hear, ‘We know—we’re on it.’”

Chris Gaylor, president of Power Equipment, an equipment distributor based in Louisville, Ky., says the company uses telematics data to build history files for used machines, documenting to prospective buyers how a machine was used, how hard it worked, fault codes it experienced, how codes were addressed, how much fuel it burned, and if maintenance was done on schedule. It’s a value-added service, says Gaylor.

And for Guy Gordon, CEM, director of asset management, Aegion, the need to keep every machine in the fleet productively busy was a primary reason for implementing telematics.

“My world revolves around utilization; I don’t want our company owning assets we don’t need,” says Gordon. “A project manager might insist that he needs every machine he has on site, but then you look at the telematics data and discover a unit that hasn’t run in six days.”

Telematics basics

“It all comes down to using telematics in a way that drives efficiency in your business,” says Gordon. “Don’t look at the telematics system only for the equipment department; the entire organization should be using the system to create a competitive advantage.”

Click for a list of telematics suppliers.

Gordon has succinctly stated the ultimate goal for telematics implementation, and although a few companies with off-road fleets have made significant progress toward that end, many equipment owners are still on the fringes of the technology. That said, a quick review of the basics might be beneficial.

Whether telematics systems are “embedded” by the original equipment manufacturer (OEM) at the factory or installed by third-party (non-OEM) suppliers in the field, they share two common elements: a GPS unit that provides machine location and a “telematics box” that retrieves data from the machine’s electronic control unit, which collects data from sensors that are placed in machine systems and report such variables as pressure, temperature, level, position, speed, and time intervals.

Machine location and sensor data are then wirelessly transmitted via a cellular or satellite network to the telematics supplier’s server, where they are processed and presented on a secure website for the machine owner to view.

A number of summary reports typically are available—for example, hours, idle time versus working time, and fuel consumption. At the website, the machine owner also can establish geo-fences or time-fences that limit the geographical areas or time periods within which a machine is allowed to work. In more advanced installations, data from the telematics supplier is electronically integrated into the end-user’s business system via application-programming-interface (API) software, which the supplier often helps the user develop.

According to Emad Isaac, chief technology officer for LoJack, third-party telematics suppliers can extract all sensor data that are publically available by “plugging into” the machine’s on-board diagnostic port or the machine’s data bus system (such as CAN, controller area network), which allows two-way communication between electrical subsystems. Third-party suppliers, he says, must adhere to strict industry standards when making these connections.

Those new to telematics, suggests Isaac, should discuss with their supplier whether a cellular or satellite connection—or a dual-mode system that uses both—is best for a particular operation: “There are business implications to consider when selecting a particular solution,” says Isaac.“It’s not just the initial cost of the equipment, but also the recurring (monthly) airtime cost for transmitting data.”

According to Jim Rice, national director of sales, SMB, Verizon Networkfleet, the company’s dual-mode system automatically redirects communications to the satellite network for uniform coverage in remote areas, making it especially useful, he says, in markets such as oil and gas, mining, and forestry.

Tony Nicoletti, director of strategy and business development for DPL Telematics, suggests that telematics novices keep the basics in mind: “Some people have the idea that telematics will completely change the way they do business. Actually, telematics only complements what you’re doing already; it’s a means for gathering data already being collected—and which the machine owner knows how to use—but collecting it in a more efficient manner.”

The amount of detailed data available from the machine’s sensors can be overwhelming, however, and it’s important, say those most familiar with telematics, for machine owners to be judicious about the data selected for use. Users might request to be notified by text or e-mail about specific abnormal operating conditions, for example, and might choose to start small by concentrating on machine-idling reports.

That was the starting point for Kokosing Construction, when an internal study uncovered an average idle rate of 54 percent for a particular group of machines. “Excess idling is depreciation out the door,” says Barth Burgett, vice president of equipment and support, “and it moves the machine that much closer to its next service, wastes fuel, and uses up warranty.” Since then, the company has developed a fleet-wide telematics program that uses the company’s own data-processing servers to preserve the security of information.

Data dilemma

Early adopters of telematics who had mixed fleets—several OEM brands, each brand equipped with a proprietary telematics system—discovered that primary frustrations with the technology were the necessity to view data from each OEM on a separate website and the challenges of electronically importing data from multiple sources into business systems. If older machines in the fleet were equipped with a third-party system, the problem was compounded with even more data input.

One solution was to install a common third-party telematics system on all machines in the fleet, including those with embedded OEM systems. That way, all data would be available on a single viewing portal and only one API would be required to push data into a business system. Doing so, however, meant paying for imbedded OEM systems, but not using them. But in the interest of standardization and simplification, some fleets took this approach—and some still do.  

Another solution was (still is, and is becoming more popular, it seems) to employ the services of a “third-party collector” that develops software necessary to aggregate data from multiple sources and to present it on a single user interface for viewing and integration.

“The first question we ask is ‘What do you want to do with the data?’” says Jeffrey Cohen, vice president, asset and security solutions, Telogis. “A fleet manager might tell us he wants to look at utilization across three makes of equipment, but at present he has to go to three different sites and run three different reports. We can bring in all the data and present the result to the end-user in a unified manner.”

Third-party collector Iron Portal, says Rob Samuel, vice president sales, gathers data from telematics suppliers’ servers and can build custom modules and interfaces to ensure that end-users get the exact data they want. Once the data are collected, he says, the information can be displayed as the end-user chooses, which might include “easy-to-use graphs, a single map showing all the mixed fleet, a variety of reports, and intuitive dashboards.” Further, says Samuel, Iron Portal also can normalize data into a single integration for a variety of software packages.

“End-users are quickly needing a way to manage the deluge [of data] and get it into a format they can use,” says Samuel.

Since 2010, however, the technology involved with handling data from multiple sources has become potentially less complicated. At that time, AEMP developed a “telematics standard,” which—in layman’s terms—established protocols that allowed telematics suppliers to process data in a uniform manner, meaning that single-portal viewing and data integration into business systems required only single software interfaces (for which the standard provided specifications).

Herzog’s Samford says that before the standard was developed, the company equipped its fleet with a common third-party telematics system as a solution to the attendant problems. The standard, however, he says, simplifies using embedded OEM systems, resulting in significant savings.

2014 AEM/AEMP Standard

In March 2014, an expanded 2.0 version of the standard was released in draft form. Developed jointly by AEMP and AEM, the new standard addresses 18 data fields, versus five in the original standard, and has provision for 42 fault codes.

Stan Orr, CAE, AEMP president, is of the opinion that the new standard will accelerate the implementation of telematics in off-road applications, and judging from comments at the Nashville conference, the telematics industry—suppliers and users alike—is in full agreement.

At present, the standard is under review by the International Standards Organization (ISO), says Orr, and if adopted by ISO (as is expected), the standard will take on a global perspective that will likely involve many more telematics suppliers.

Potential developments regarding the standard, says Orr, could include embracing the crane and lift sectors of the industry, developing certification programs for telematics suppliers using the standard, and developing software for calculating return-on-investment.

Data integrity

For those experienced telematics users who keep pushing for a higher degree of implementation and integration of available data, concerns about the technology become increasing complex.

“In my opinion,” says Kokosing’s Tim Truex, mid-size equipment and electrical manager, “advanced implementation [of telematics technology] means that data collection becomes invisible—when data feeds automatically and seamlessly from the magical black boxes into systems you already have in place. When things become automatic, however, data integrity and data validity become critical concerns.

“If I push garbage into my ERP [enterprise resource planning] system,” says Truex, “then the reports it generates will be garbage, and the consumers of the information—whether equipment managers, operations, or financial people in the organization—won’t trust it.

“We continue to improve the process, and we’ve reached the point that we trust the data and are pushing more into our ERP, but we’re still verifying.”

(For a thoughtful discussion of telematics data integrity, see Mike Vorster’s commentary, “The Quality of the Data.”

Herzog’s Samford raises another concern: “Just as important as how data inputs are used, is how data will be stored—and how long archived—say, for legal and resource purposes.”

And, says Samford, a telematics system needs ongoing attention: “Like a car, you have to maintain a telematics system to keep it from becoming inconsistent and unreliable. We have to run reports that tell us, for example, if boxes have gone berserk or if OEM feeds have somehow changed. It’s electronic, it’s man-made, it will break.”

Champions, ROI and choices

Speakers at the conference also shared other lessons learned: “You need a specific person to administer the data—someone who is charged with understanding the telematics system better than anyone else in the organization,” says Aegion’s Gordon. “So when someone needs information out of the system, whether the CFO or human resources, they go to that person and ask, ‘Can you get this for me?’”

Herzog’s data administrator, says Samford, did nothing but install telematics boxes for the first four months to gain an intimate knowledge of the system and its installation challenges. “Most organizations probably already have a person doing what telematics can supplement,” says Samford, “so it might be more a reallocation of company resources than a totally new position.”

Speakers also suggested investigating all possibilities for increasing return on investment (ROI) for telematics, including modifying operator behavior and avoiding anti-idling penalties with idling reports, trimming under-used machines from the fleet and reducing machine rentals with utilization reports, basing routine maintenance on fuel burn, not hours, and lowering insurance premiums by assigning data-viewing rights to carriers as proof that geo-fencing is serving as a theft deterrent.

Herzog has given much thought to the return on its telematics investment, says Samford, and among the methods used to enhance ROI is granting its business partners access to data, such as equipment dealers, banks, and fuel suppliers. “For example, we’ve empowered our fuel suppliers by allowing them to look at our telematics to determine by fuel burn and hours how much fuel a machine might need, then to decide whether they need to make the trip to keep us running,” says Samford. “We can then negotiate a lower rate per delivered gallon, so it becomes a ‘win-win’ partnership.”

And, says Gordon, choose your telemantics solution carefully: “There’s nothing worse than adopting a technological solution that can’t be adapted and expanded to future needs. It’s nice to have a good cost position, but if your choice doesn’t get you what you need, it’s not a good solution.”

Choosing a good solution requires some effort, says Samford: “Many equipment users recognize the value of telematics, but don’t know how to get there. Look for guidance…ask questions…network…find people who have implemented systems and ask them what they did wrong…and remember that what’s right for one company might be totally wrong for another.”