Practical Telematics

Feb. 28, 2012

The world of off-road “telematics” seems populated with several types of fleet owners. In the minority are a few who are developing systems aimed at collecting select bits of information and integrating the data into business systems for improved fleet management. In the majority are those who either don’t fully understand the technology or who question its value, cost and return on investment. In the middle are those who understand telematics, but aren’t quite sure about how or when to best integrate the technology into their businesses.

The world of off-road “telematics” seems populated with several types of fleet owners. In the minority are a few who are developing systems aimed at collecting select bits of information and integrating the data into business systems for improved fleet management. In the majority are those who either don’t fully understand the technology or who question its value, cost and return on investment. In the middle are those who understand telematics, but aren’t quite sure about how or when to best integrate the technology into their businesses.

“The majority of end users is still struggling with the whole concept of telematics,” says Pat Crail, CEM, fleet information manager for The John R. Jurgensen Cos. “They know that machines can self-report—hours, location, fault codes and the like—but beyond that, with some notable exceptions, most are trying to understand how to implement the technology in such a way that increases fleet efficiency and effectiveness.”

Considering the disparity of perceptions about telematics, a quick detour through the basics might be of value. Whether supplied by the original equipment manufacturer (OEM) or by a “third-party” (aftermarket) company, all telematics systems have two common elements: a GPS (Global Positioning System) receiver to identify machine location and an on-board data logger to capture information sent from various sensors on the machine.

The type and amount of information captured and available to the end user varies with the particular system and can range from simply hour-meter readings and location, to fuel consumption, operating parameters, fault codes, and operator-error alerts. OEM systems on new machines also deliver a wealth of proprietary data that manufacturers can use for product development or for tracking the performance of machines in the field, or that OEM dealers can use to assist machine owners with maintenance issues.

The collected information is transmitted via a cellular or satellite network to the telematics supplier’s data server, where it’s processed and presented on a secure website for the machine owner to view. Depending on the data collected, a number of summary reports typically are available for owners to download—for example, machine utilization, idle time, and fuel consumption.

While on the website, the machine owner also can locate machines and can create “geo-fences” or “time-fences,” which limit machines to operating in defined geographical areas or within certain time periods; if the fences are breached, the owner is notified via e-mail or text.

The cost of this information? If you buy a new machine with telematics, the cost of the system, of course, is in the purchase price. But the cost to use the system is usually negligible, because most OEMs offer use of the system free of charge for several years or, in some instances, for the life of the machine. Monthly charges for a third-party system might be around $30, after the cost of hardware and installation, or course.

Telematics benefits

How does a machine owner with perhaps just a few newer telematics-equipped machines even begin to sort through all the data available and pull out a few nuggets that might actually be of benefit? Ken Calvert, director of product support systems for Komatsu America, provides a simple—but powerful—illustration.

“We try to get machine owners into the shallow end of the telematics pool by encouraging them to begin looking at the hours they put on machines each month and the amount of idle time involved,” says Calvert.

Owners are asked to associate a cost with an hour’s worth of idle time, he says, accounting for not only fuel, but also for the accelerated depreciation and maintenance involved. Depending on the machine, he says, that figure can range from $25 to $45 per hour. Last, he says, owners are asked to share the idle statistics with their operators when the monthly report arrives via the local dealer.

“It’s phenomenal,” says Calvert. “Everyone on the program immediately begins to substantially reduce idle time, which is not only a significant cost saving, but also a benefit for the environment.”

Renaat Ver Eecke, vice president and general manager, Navman Wireless North America, reminds potential telematics users to start with the basics:

“All telematics systems come with standardized reports that address the major pain points experienced by any equipment manager,” says Ver Eecke, “including the need to know where your assets are located, the collection of engine hours accurately and in a timely manner, documenting equipment utilization, and measuring idle rates. Start with the entry-level reports, and you can add other features, such as sensor connectivity, once you have the basics under your belt.”

Telematics integration

Once a telematics user recognizes that basic information, such as hours and location, might go a long way toward improving fleet management (because the information is more current and accurate than manually collected data), then the next step might be “integration.”

Integration means transferring the telematics data into an in-house fleet-management program or “business enterprise system” in order to generate custom reports—such as those for scheduling maintenance or tracking utilization. Some perform this transfer manually by downloading reports from the suppliers’ websites, then keying the data into the office system. Most, however, “programmatically” automate the process.

The programmatic or electronic transfer of information from the supplier’s website to the user’s database is facilitated by an “application programming interface” (API), which is essentially software programming that allows data to be shared between two applications.

If the fleet includes different brands of machines with OEM telematics systems, plus older (legacy) units with third-party telematics systems, then a separate API might be required to import data from each supplier’s website. Usually, the OEM or third-party supplier can assist the fleet owner’s information technology (IT) department with developing required APIs.

Recognizing the inefficiency of having to visit each supplier’s website with a separate API, the Association of Equipment Management Professionals (AEMP) enlisted the help of telematics suppliers—notably Caterpillar, Deere, Komatsu and Volvo, with support from aftermarket supplier Navman Wireless—to develop a standard way of presenting data on the various websites. This means that a single API can collect data from any website conforming to the AEMP standard.

The single API can extract from participating providers’ servers basic information, including machine identification, location, total operating hours, fuel used to date (or, alternately, fuel used in the last 24 hours), and distance traveled (when appropriate), along with time and date stamps for each data set. (AEMP provides a development toolkit for building the API and for formatting data imported into the user’s business enterprise system at

(Formatting data coming into the user’s fleet–management or business enterprise system via the API requires added software, which usually is developed by the user’s IT department, third-party supplier, or an IT consultant. The software essentially filters incoming information to ensure that it’s useable and pertinent.)

A marathon, not a sprint

Kokosing Construction, Fredericktown, Ohio, is representative of companies working to integrate telematics into overall fleet-management operations.

Kokosing has been developing its telematics program in-house for the past three years and has some 450 pieces of equipment equipped with third-party systems. The data collected by Kokosing’s system, however, goes not to the third-party supplier’s website, but directly to Kokosing’s own server, a measure designed to eliminate any possibility of information being compromised.

“The information from the boxes is maintained in its own database,” says Tim Truex, electrical and mid-size-equipment manager, “and the system has its own front-end interface to run reports. We’ve also developed an API to allow data collected on the server to be used by the enterprise system.”

Reports that Kokosing pulls from the system include idle time (showing when a machine has idled more than a pre-defined time); utilization (compares expected hours and production hours over a specific time period); productivity (varies with the type of equipment, but might include cycle times for loaders and haulers); operator (showing who started what piece when); and scheduled maintenance (based on hours and on fuel consumption, the latter data collected by the company’s own fueling system, not by telematics).

Although Kokosing does not use OEM websites for information, the company keeps an open mind.

“With our newer machines equipped with the OEM’s telematics boxes,” says Truex, “we obviously see value in the constant stream of data flowing into the OEM’s database. We’re looking to perhaps use this data as validation for what we’re collecting, and with the development of the AEMP standard, our IT group has been investigating the required API.”

“It’s not a sprint,” says Truex, reflecting on the evolving nature of Kokosing’s overall telematics system. “It’s a marathon.”

How much machine data?

If you talk to telematics users, even those most advanced, you might be surprised at how little information is actually collected for use, but how powerful the information becomes when diligently applied to more efficient fleet management. The staple information seems to be hours and location, sometimes supplemented with fuel consumption.

“Today, telematics solutions provide a vast amount of data that can easily become overwhelming to contractors if they try to take it all on at once,” says Jonathon Metz, worldwide Product Link specialist for Caterpillar’s Connected Worksite. “It’s better for them to focus on two or three pieces of data that they use on a consistent basis and integrate those into daily operations. When they’re comfortable with the operational flow, they can focus on another set of data that will further benefit the fleet.”

Warren Schmidt, CEM, corporate equipment manager for Flatiron Corp., Firestone, Colo., suggests that the choice of telematics data collected be tailored to the machine owner’s objectives.

“The fundamental question,” says Schmidt, “is ‘What are you looking to gain from the implementation of telematics?’ We started by looking to become more efficient in our equipment maintenance operations—to eliminate human error in scheduling, to streamline and improve servicing and recordkeeping, and to move away from a system based on pen and paper. That was our basic goal, along with asset management in terms of being able to track machine location and theft recoveries.”

Fault-code alerts?

Whether the user’s “basic” telematics data should include fault-code alerts—receiving an e-mail or text when the machine reports an “out-of-spec” condition—is an issue of some debate in the industry.

“I’ve stopped counting, but in a couple years or so, I had some 4,000 e-mails for ‘critical’ fault codes for just 40 or 50 machines,” says Crail. “Only two were actionable, and they were minor. The machine’s ECU [electronic control unit] is not artificial intelligence—it’s just a computer that looks for voltage or current to be within a certain range. If it’s not, for whatever reason, you get an alert.”

For example, says Crail, when a motor grader is operating in sloppy conditions, its front wheels frequently will move on their own when they fall into ruts. But the ECU sees this as ‘steering without operator input,’ he says, and a fault code results.

Flatiron’s Schmidt thinks that fault codes, in fact, might be an impediment to telematics implementation:

“This is where I believe the hesitation to telematics occurs,” he says. “It’s just too much information. I don’t have time to monitor sensor alerts, nor do my people. But maybe it’s just the nature of our business that doesn’t clearly illustrate the value in monitoring these alerts.”

Bill Sauber, Volvo Construction Equipment North America’s manager of remote technologies, brings perspective to the situation:

“Manufacturers tend to think of more data as more information,” says Sauber, “but in many instances, more data is just noise. Manufacturers run the danger of crying wolf and losing the extremely good potential for making this a useful tool.”

Sauber sees great value in the reporting system, though, when alerting machine owners to operator errors that inevitably cause machine problems—engine over-speeding and high-speed directional shifts, for instance—or when reporting events such as water in the fuel, perhaps from bad fuel that could threaten the entire fleet.

“It pains me to think that critical information like this could be lost in all the noise and possibly ignored,” says Sauber, “when it has the potential for saving the machine owner a lot of money and lost work time. We manufacturers must back off supplying useless bits and bytes and focus on the really critical information that benefits the machine owner.”

Perhaps the toughest nut to crack for machine owners who see value in telematics, and who set modest objectives for using the information, is how to implement a system in a mixed fleet—new machines of various makes with OEM telematics and legacy machines of various brands without telematics.

“Some view the situation as all or nothing—equip the entire fleet with telematics, or don’t do anything,” says Crail. “But, ‘incremental implementation’ has benefits, including lower capital investment, reduced (or no) recurring access fees, and the ability to select appropriate devices without committing to one supplier. This approach allows fleet managers to begin quantifying return on investment and to decide just how far they want to go with telematics.”

Mixed-fleet implementation

The selection of telematics systems for legacy machines includes those of third-party suppliers as well as “all-makes” systems from OEMs, both of which report basic data that can usually be supplemented with added sensors, but the number of sensors may be limited. (Essentially, third-party and OEM all-makes systems can’t use the encrypted data stored in the machine’s ECU.)

“Our system allows up to four added sensors of our choosing,” says Flatiron’s Schmidt. “They can be machine-health sensors or those that are production-oriented, such as how many buckets did this machine dump today.”

Another valid consideration when choosing a system is whether on-road assets are to be included.

“A third-party supplier like Navman Wireless brings to the construction industry not only an all-makes/all-models capability,” says Ver Eecke, “but also the capability to equip both off-road and on-road vehicles. As people get into telematics, they want more standardization, easier interfacing, and the ability to go to one site for data. It’s our experience that newer telematics users tend to implement over time, equipping legacy equipment with a system such as ours, then, eventually, switching newer equipment over to the same system.”

Estimates for initial telematics installations (both third-party and OEM all-makes systems) range from $250 to $1,900 per machine. A typical figure, however, might be around $900 or so for a package that has fees bundled in for such services as developing APIs and related integration software. Costs can go up, however, as the system is customized with specialized sensors.

So how do fleet owners determine if the investment in telematics will pay dividends?

“Ask the telematics vendor you’re considering to provide ROI [return-on-investment] information for customers with a fleet makeup and usage scenario similar to yours,” suggests Ver Eecke. “Most vendors also will install tracking devices in one or two machines on a demo basis so that you can get a snapshot of the benefits.”

The fleet owner also can do rough ROI estimates, says Ver Eecke, by considering, for instance, how much could be saved in consumables (from premature servicing) and breakdown costs (from late servicing) if engine hours were captured automatically to more precisely manage preventive maintenance. Or, what might fuel savings be from using documented idle time to enforce anti-idle policies? (Navman Wireless provides an interactive ROI Calculator at

An experienced telematics user at Kinder Morgan, a large pipeline transportation and energy-storage company, says that the ROI of a telematics system initially might be simply the timely delivery of accurate data (free from human error) to drive equipment-management or business enterprise systems and to provide reliable reports.

“Often the ROI doesn’t become apparent until one sees the information gathered and starts determining the uses of the information to improve cost savings,” says Flatiron’s Schmidt. “As the system evolves, return on investment potentially can be assessed in improved maintenance practices, improved machine utilization, fuel management, operator efficiency, and even time-carding equipment to a job. Plus, the manpower needed to gather the information is reduced, because the system provides it automatically in a completely accurate and timely fashion.”

Volvo’s Sauber says that return on the telematics investment is often difficult to assess in hard numbers, but he cites certain intangibles that should be considered, among them theft/loss prevention, more favorable insurance rates, control of unauthorized machine use, and improved service monitoring.