Reining in Risk

By G.C. Skipper | February 19, 2016
Reining in Risk



Reprinted with the permission of Equipment Manager magazine, the magazine of the Association of Equipment Management Professionals.

In the vernacular of the oil patch, if you drill down far enough into managing risks, you’re going to strike numerous data levels that spread out like a subterranean alluvial fan.

 Much of that data can stop equipment theft and retrieve the stolen property, all of which is great. But when fleet managers combine that capability with other technologies, they end up with a grab bag full of management tools that go impressively much further. Safety awareness among employees increases, and it is those employees who must buy in to the organization’s safety programs. It is at that root level, many fleet executives say, where a company’s safety culture is born and prosperous.

Some of those data levels, according to Courtney DeMilio, national vice president of construction and commercial for LoJack, include information from telematics and GPS that identify equipment locations. To keep up with rapid technological changes and their relevance to safety, DeMilio serves on AEMP’s technical and safety committees.

“We consider geo-fences as the highest level of protection in the alarm suitcase, so to speak,” she says. “Another useful tool is to set up protective zones so you know when a machine arrives at a location and when it goes in and out of that area.”

Watch Your Cellular Network

Jason Milligan, CESP, Southeastern Equipment Co., says fleet managers should be careful that the technology in any GPS device is not antiquated. There are some issues, he says, with older models that use 2G network on the cellular side.

“2G is going to go away soon,” he says. “Managers are going to have to be careful that they are monitoring how many of their units have 2G. You have to replace them, if need be.”

In each upgrade is a larger bandwidth of data available for a device to use, he says.

“As 2G becomes older, cellular providers eventually will stop maintaining the 2G network as newer versions come online. There may be options that cost less money, but I think fleet managers would be penny rich and dollar foolish by not utilizing GPS for all the data that can come through the device.”

The best way to find out what your equipment is using and how old it is, Milligan suggests, is to contact the unit’s manufacturer with the serial number of the model. The manufacturer then can tell how it was built and what components are in it.

Other tools include input alarms that tell you when someone is tampering with the equipment’s power source, for instance, trying to cut the wires.

“With any type of theft, they’re not going to do it in front of your face,” she says.

Watchdog technology, combined with proper job site lighting and telematics, create major deterrents to theft, DeMilio says, although telematics data must be funneled into useful streams.

 “First of all, it’s good that you can have that data in an industry that has been in the dark for so long,” she says. “The question is utilization. Are you going to use it to get a return on investment? Does it make your business more efficient? OEMs, as well as AEMP’s telematics standards, have made major advances in educating our industry on the machine’s ability. We really try to leverage, first, improving AEMP standards, and second, as OEM free subscriptions run out, we just put our box in without missing a beat,” DeMilio says.

“As for risk management, we can make the data meaningful by delivering it through computers and, along with a few tricks of technology and prevention techniques, ensure the equipment is safe on the job site.”

At A.J. Johns, risk management means reducing risks of worker injuries or worse; reducing risks of equipment damage; reducing risks at job site accidents; reducing risk of theft; and tracking and reviewing near-misses.

“Safety is simply part of the job that you do every day,” says the company’s equipment fleet manager Larry LeClair, CEM. “We think about it all the time.”

Risk management is much more sophisticated than it used to be, thanks to technology tools available to equipment managers, says LeClair. For example, every month he reviews and shares near-miss data from telematics with all company foremen.

“It increases their safety awareness and makes for better safety behavior of employees,” he says. “They look at the data, for example, that tells them a near-miss occurred on a particular project when an equipment operator was backing up. Although his backup camera was on, he didn’t see that a person was walking behind the machine. Another example would be an operator who moves the machine too close to an object that could have potentially caused a fatal accident.”

When such events happen, he says, many times the worker is too embarrassed to mention it. Other workers, however, “are really good about telling someone about the near-miss. They fully understand the seriousness of what might have happened.”

Any near-miss incident is investigated within five days of when it occurred to find out what exactly took place, LeClair says. Some months the company may have one or two near-misses, but “other months we don’t have any at all,” he says. “Again, it’s all about creating a safety culture.”

GPS location tools or services work “on different avenues,” LeClair says.

“You are able to get terrain and locations in addition to verbal explanations of the job,” he says. “You find out what type of soil has to be dealt with, which lets you decide how to build haul roads, for instance. The work area might have a high concentration of safety risks. If we have hardpan in a certain section of the job, we have to bring in an excavator and change the teeth out before digging. That’s because hardpan is so tough to dig in that the operator has to be careful. Unlike digging in soft soil, hardpan requires more of a scalloping operation.

“With GPS location tools, you can bring up the worksite on a desktop and make such decisions as how best to move the machine where it needs to go.”

Also to be considered are existing risks, such as buildings and utility and power lines, he says.

“If you are going to bring in 50-ton excavators, you have to decide in advance what routes you are going to use, whether you are going to go through the front of a subdivision, for example, or develop a back entry road to the job site to avoid interrupting the flow of residential traffic. GPS helps overcome those type of obstacles.”

Another efficient way to make sure the job is done safely is via OEM-installed telematics systems, says LeClair. This technology gives the option of mapping the location of surrounding areas that may be wooded where haul roads run. “This helps you make your decisions,” says LeClair.

This type of combined technology (GPS and telematics) does two things: It helps prevent theft and, at the same time, increases worker safety.

“On theft, geo-fences help, in that the operator knows at the end of the day where to park his equipment within the geo-fence,” LeClair says. “GPS also helps operators know where they are on the job. Although operators may not necessarily get a map from telematics, it does allow us to build a model of the job.”

Jason Milligan, CESP, director of service for Southeastern Equipment Co., says that geo-fences allow an alert to be set up that can be texted or emailed in real time if the unit has moved outside the geo-fence area.

“Even if somebody is trying to run off with the equipment under its own power, if the speed alert doesn’t get the thief, the machine being outside the geo-fence will,” Milligan says.

With GPS, a telemetry unit gathers the data and generally sends the information via a cellular network to a centralized data server. For instance, dozers, depending on the size, never go faster than about 8 mph. With the telemetry unit installed on the machine, managers can see if it is exceeding that speed and therefore know when it is being transported over the road by truck or some other method.

At Foley Equipment, a distributor in Wichita, Kan., Phil Beagley, CEM, CESP, says compact units, such as mini-excavators, compact track loaders, and skid steer loaders, are among the most at-risk equipment in construction when it comes to theft.

“I see GPS as a proactive tool,” Beagley says. “But the thing is, if you lose reception or the thief puts the machine under a structure where GPS can’t see it, you are out of luck. What I promote when customers are purchasing equipment, as other major manufacturers do, is to install a password option on the machine. You can’t start the machine without the password. It takes a lot of the chance out because you are using two safety tools.”

Safety devices can also affect insurance costs, Beagley says.

“One of my customers is a concrete contractor who went from 10 employees to 40 due to an acquisition,” he says. “Last year, he bought a skid steer and had the machine only a couple of weeks when it was stolen. He had to buy a new one. His insurance company actually came to him and suggested that he install GPS on the new machine. He is now in the process of doing that. There is some cost savings there.”

Joseph J. Poliafico, whose background includes working with a heavy civil contractor before becoming a senior consultant with FMI, says his former company used GPS primarily on heavy equipment.

“The good news is, there isn’t a lot of theft with the heavy stuff,” he says.

Before technology advanced to where it is today, “contractors would grade dirt, then move on,” Poliafico says. “The survey guys would tell you how to grade. There is great efficiency in that since there is less stopping and starting. But you’re out there looking at little sticks with tape around them. Those sticks have a tendency to fall over, get run over, or are buried in snow or mud. Today, GPS points don’t go away.

“Digitally, it reaches a point where operators are almost just driving,” he says. “They have a digital readout like a map that is similar to a 3-D model of a building. The operator knows when he has to lift or lower the blade.”

From a productivity standpoint, Poliafico says GPS and telematics have to work together. In addition to input that goes into the systems, there also is input of quantities, “such as the amount of top soil you have to move around. It helps you plan your work better and perform better.”

Poliafico says manufacturer-installed telematics on today’s equipment can help mitigate risk.

“The first rule of safety is to engineer out the hazards,” he says. “If these systems can help you do that, I’m all for it. And, if you can use telematics to increase safe behavior, fantastic. You have hit a home run if you can improve productivity and safety and mitigate risks. It becomes a no-brainer for most companies.”

Safety is the No. 1 business of contractors because outside of construction equipment, their workforce is their biggest investment, says Milligan.

“A lot is going on at a work site. There are all kinds of contractors trying to get the job done as quickly as they can. Being safety-focused keeps everybody safe and helps keep the job site running.”