Reprinted with the permission of Equipment Manager magazine, the magazine of AEMP.

A New York-based contractor, who had equipped his fleet’s 400 heavy construction machines with telematics, trimmed his operating expenses by more than $800,000 in the first year. That included a fuel savings of $80,000 a month at one site where the system’s reports revealed that seven heavy excavators were left running all day during the winter. Without the ability of telematics to monitor idling patterns, that fuel—and money—would have continued to go up in smoke.

That, in a nutshell, is the value of using telematics to weed out waste and keep your equipment performing at peak levels. Armed with data that was previously either unreliable or unavailable, you have a roadmap to conserve fuel, minimize equipment downtime, reduce cycle times, right-size your fleet, recover stolen machines and save money overall.

“Telematics is all about having visibility into what your equipment is doing so you can do a better job of managing it,” says Jeff Mingus, equipment manager for Illinois-based J F Edwards Construction Co. “If you know that you’re only using a bulldozer or excavator 500 hours a year, you can try to move it to other jobsites to get more work out of it, determine if you’re wasting money on equipment rentals you don’t need and make better decisions about what new equipment you need to buy. But it all starts with having accurate data, and you can’t count on that if you’re reading your hour meters manually.”

Maintenance optimization

For Mingus, as for others, many of the benefits of telematics flow directly from the ability to capture engine hours electronically by connecting the alternator or equipment computer to the GPS tracking unit installed in each machine. Automating the data recording process eliminates error-prone manual readings, data entry mistakes, deliberate misreporting and other impediments to accuracy that can affect preventive maintenance scheduling, equipment utilization analysis, and job costing and bidding.

 In the area of scheduled maintenance, for example, eliminating human error in reporting engine hours helps avoid having a machine slip through the service cracks.

 “When we were using pencil and paper to document machine use, the numbers might be transposed, turned in late, mis-entered into the spreadsheet, or never reported at all for some reason. As a result, a machine might be serviced late or not serviced for a year. That doesn’t happen any more,” says Warren Schmidt, CEM and corporate equipment manager for Colorado-based Flatiron Construction, who uses telematics to track more than 500 highway construction units and support equipment.

With the improved accuracy and near-real-time availability of engine hours, telematics has also enabled Schmidt to successfully fine-tune servicing intervals to suit the specific machinery or even the job. In some cases, such as projects with multiple shifts, machines may be serviced more frequently. In other cases, service intervals may be extended by taking oil samples at 250 hours and delaying oil changes and associated expenses for another 100 hours if the oil is clean enough to last.

For Schmidt, this increased control over PM cycles and adherence to PM schedules is not only delivering expected benefits such as longer machine life and reduced downtime, but also keeping repair costs in check. That in turn provides a competitive business advantage by helping Flatiron hold the line on hourly rates.

Bill Jones, equipment manager at Thoutt Bros. Concrete in Denver, is realizing similar benefits with the added twist of using the same telematics system to track both off-road equipment (based on engine hours) and on-road vehicles (based on mileage).

“All the maintenance status information we need is in our telematics software, whether it’s for backhoes, scrapers, pickup trucks or equipment repair vehicles,” Jones says. “It’s a lot more efficient than using separate systems for different kinds of assets.”

Engine alerts

Telematics can also be used to detect engine trouble before it happens, potentially saving tens of thousands of dollars in engine replacement. This is achieved by connecting the system’s GPS fleet-tracking devices to sensors that monitor air filter restriction and/or engine, coolant or transmission temperatures, and alerting designated personnel when pre-defined thresholds are breached.

One contractor taking advantage of this capability is Rogers Group, a provider of aggregate products and road building services in seven southeastern states. Rogers has configured its telematics platform to email designated managers’ BlackBerrys immediately in the event of a sensor-spotted emergency. The affected machine is quickly shut down and the problem addressed before catastrophe strikes.

Last summer, this strategy averted three engine disasters in Arkansas alone. “In all three cases, the radiators were blocked with dust,” says Phil Gosnell, Rogers’ equipment manager. “A simple 10-minute hosedown solved the problem and prevented the engines from being destroyed. We can find out there’s a problem even before the dashlights go off or if the operator doesn’t notice the temperature gauge rising. One alert like that can save us $60,000.”  

Fuel management

Additional savings can be achieved by using telematics to rein in wasteful fuel practices. One top target is equipment idling, which can be measured by lack of movement and ignition on/off information as well as by adding sensors that can differentiate between a machine’s “idle” and “working” time. Contractors who have used telematics idling reports to crack down on excessive idling have reduced idle time and associated fuel costs as much as 75 percent.

Other telematics-enabled sources of fuel savings include detection of unauthorized equipment usage via electronic geofences that indicate when a machine strays outside its assigned boundaries, better routing of heavy haul transport trucks that deliver equipment to jobsites and better decision making about when and when not to send refueling trucks.

“We can sit down with our telematics system, see how many hours the machines at a given job site have run since the last time we refueled, and avoid sending our fuel guy out until it’s really necessary,” Jones says. “That yields fuel savings on the fuel truck itself.”

Gunter Karg, equipment improvement coordinator at Las Vegas Paving, has discovered another fuel-related benefit. By installing GPS tracking units in his fuel trucks, he is able to monitor how much diesel is dispensed at each location for greater accountability and control.   

Productivity improvements

Moving beyond maintaining, protecting and fueling the equipment itself, fleets are also using telematics insights into equipment utilization and operator behavior to help boost productivity and profits.

At the simplest level, consider a telematics report showing that a given machine is running at only 25 percent of capacity. That data can spur efforts to transport the machine to other sites, eliminate excess rental equipment and otherwise get more bang for your equipment buck.

Equipment utilization can also be compared by job. If there is a disparity, managers can analyze what makes one site more productive than another. Mingus has used this technique in previous positions to identify best practices and spread them throughout the company. He plans to duplicate the approach at J F Edwards to drive incremental improvements at any lagging locations and raise productivity levels across the board. 

Other telematics tools can help move the productivity needle as well. In its quarry operations, for example, Rogers uses its telematics software to draw geofences around the load-out area in each pit as well as the dump hopper at the primary crusher. With the help of those virtual perimeters, system reports can track the time that elapses between loading the rock and delivering it to the crusher, zero in on unproductive activity, and use that information to identify opportunities for reducing cycle times as well as optimizing equipment use.

“We may find we have 10-minute cycle times, but our trucks are sitting at the load site or the dump site for longer than they need to,” Gosnell says. “That probably means we have too many trucks at that location. Removing a front end loader or an off-highway haul truck from the site and reassigning it elsewhere may be a better use of our assets.”

Equipment visibility   

The ability to see where all equipment is located in real time on a single map—based on GPS signals from the tracking devices installed on each machine—is another boon to asset management. If you’re looking for a stolen trencher, a crippled crane or a grader that you haven’t seen for a while, the precise location can be just a click away.

The value for theft prevention and recovery in particular is high. Schmidt has recovered a $100,000 skid steer that was stolen in California, several machines that were filched by joyriders, and $30,000 worth of GPS-equipped light towers that went missing in Canada. Others report similar experiences, including being able to lead law enforcement officials directly to a stolen machine by reporting the GPS coordinates as it’s being driven away.

Thefts can also be nipped in the bud by geofencing a jobsite and configuring the system to trigger alerts when equipment leaves the area; and/or by choosing GPS tracking devices that can notify managers when equipment is moving without ignition, suggesting that it is being loaded onto a flatbed. Some insurers offer discounts for these protections. 

Everyday equipment location needs are simplified by GPS mapping, too. “Being able to pinpoint the location of a machine that needs to be serviced in the middle of a cornfield means we don’t have to find someone on the jobsite who knows where the machine is,” Mingus says. “And if we’re shutting down a job, we can make sure we’ve got all of our equipment pulled out just by looking at the map.”

Job costing

From a bottom line perspective, telematics can play an important role beyond the maintenance optimization and productivity improvements mentioned earlier. One of the key benefits involves the ability to improve job costing and sharpen future job bids, based on system reports that track actual machine and attachment usage by jobsite rather than relying on guesstimates from the field.

If equipment utilization information is collected manually, for example, an operator may say that he used a dozer or a breaker for 50 hours when he actually used it for 100. Telematics eliminates those inaccuracies and enables contractors to charge accordingly, whether billing a third-party customer or applying internal chargebacks from the firm’s leasing unit to its operations division. 

“Having a telematics system makes it possible to capture hours we wouldn’t have captured before,” says Schmidt. “If a machine worked on four different jobs or was used for four extra hours after we were informed that it was available for pickup, we now have accurate documentation. No one can say the operator made a mistake or fudged the numbers, so there can’t be any argument about getting paid.” 

The same documentation also helps develop accurate job bids, he says. “You don’t want to bid 1,000 hours for a job that’s only going to take 700. Knowing the actual hours it takes to do a particular job helps us bid competitively.”

Fleet sizing

Another bottom-line benefit comes from using telematics data to forecast future equipment needs and justify the capital expense for fleet expansion or upgrades. Here again, the equipment utilization reports generated by the telematics system are key.

“If you have more work lined up for the next year, are wondering whether you need to buy more equipment, and see that your utilization rates are low, you may not need to buy another machine,” Mingus says. “Instead, you may need a transport truck to get the equipment you have from Point A to Point B. Telematics reports that show exactly how many hours you’re putting on your equipment provide the information you need to make that decision.”

Depending on the kind of work you’re doing, the analysis can also become more complex. At Rogers Group, for example, quarrying progress is factored into the equation.

“If we know we’re digging aggregate at a capacity of 1,500 tons an hour and we also know that the mining operation at a particular quarry is moving further away from the dump hopper, we can start to project how long it will take before we need to add equipment,” Gosnell says. “But we need current equipment utilization rates to make these calculations.”

Beyond GPS

With these and other management benefits, telematics has proven to be much more than the sum of its GPS parts. The ability to map the real-time location of an entire fleet is a core telematics feature, but what the system does with the GPS information is really where the rubber meets the road.

Whether it’s improving equipment productivity, optimizing PM schedules, or any of the other duties on a manager’s plate, telematics reports can deliver insights that lead to tangible savings as well as better fleet management overall. The equipment manager is responsible for delivering the best performance at the lowest price. Telematics is a tool to get there. EM

Renaat Ver Eecke is vice president and general manager of Navman Wireless North America, a provider of GPS-based fleet tracking solutions.