Equipment tracking systems offer much more than a theft deterrent. They can help you more accurately calculate and manage owning and operating costs for your fleet.
Photo credit: Teletrac
Just as electronic surveillance technologies enable the gathering of remote information, equipment tracking systems allow you to gather accurate data instantaneously on any piece of equipment in your fleet. But to really understand what this means for your business, it takes first-hand experience.
Consider a recent survey conducted for Komatsu by an independent research firm. The results varied depending on the customers' usage of a wireless monitoring system, notes Ken Calvert, director of KOMTRAX Information, Komatsu America Corp. "Non-users thought the main benefits to be protection against equipment and fuel theft and to reduce maintenance costs," he says. However, actual end users cited reduced maintenance and machine downtime as the top-rated benefits for their business.
Data provided by the KOMTRAX system includes service meter readings, operation maps, fuel level, water temperature, working hours, average hourly fuel operation, monthly and annual reports and more.
"The greatest opportunity for ROI is to maximize machine utilization by increasing efficiencies during working hours and reducing downtime for maintenance," Calvert says. "Theft control in the form of location, geo-fencing and lock-out capabilities are part of our system, but are not the focus of KOMTRAX. The information that is provided... will allow both the mid-size and smaller contractor to improve their business by increasing the knowledge about an individual machine or small fleet."
Beyond theft control
When you talk about equipment tracking, the first thing that typically comes to mind is theft prevention.
Such was the case for Triple B Services in Houston, TX. The contractor equipped all of its construction equipment, plus its 52 field service trucks, with Fleet Director from Teletrac after vandals used the company's own machines to destroy another $3 million of its equipment and create $2 million in damage to its jobsite. According to Stoney Welch, operations manager, no equipment has been lost since the system was installed.
"The accuracy of Fleet Director's GPS tracking unit was instrumental in letting us recover an $85,000 backhoe that was hidden in a warehouse several hundred miles away," he adds.
Theft is a costly concern, and one equipment owners are passionate about, acknowledges Tim McCrady, senior director, national accounts and customer services, Qualcomm Enterprise Services. "Obviously, a product like ours has been designed to provide theft protection - being able to put virtual fences around your jobsite, setting working and non-working hours," he says.
Yet, McCrady believes theft control is not where contractors can achieve the greatest return. "The theft part of it often gets you the meeting and the discussion," he says. But what end users really want to know is where their equipment is - especially if they are working multiple jobsites - and how many hours they're putting on it every day.
"From the customer perspective, the most significant ROI opportunity is within reduced operating expenses through automated collection of equipment operating hours, and efficient management of maintenance and repair scheduling and completion," asserts Jeff Fitch, NACD Product Link, Caterpillar. He says the potential savings are "literally astronomical."
"We have customers who have saved engines/transmissions/differentials/hydraulic components from failure," he points out. "We have customers who have seen a 10% to 15% reduction in operating costs through more effective maintenance and repair scheduling/completion programs managed in conjunction with Caterpillar's dealer network." Others have seen increased uptime benefits that translated into project bonuses, and reduced insurance expenditures/theft costs due to theft recovery assistance.
Accurate real-time data is needed to maximize equipment utilization rates. But it is rarely obtained using conventional methods of data collection.
"With many contractors, the total hours on the machines are reported on a weekly basis," McCrady notes. "In some cases, finding out a week later that you are not getting the utilization and performance you are expecting out of the equipment is not good."
Equipment tracking systems provide the data in real time. "You can manage your job costs better because that information is current," says McCrady.
Zachry Construction, San Antonio, TX, uses Qualcomm GlobalTRACS as a way to more accurately assess job costs. "One of our goals in using GlobalTRACS was to capture up-to-date information about equipment hours to help us accurately track the budget for each project," says Mike Monnot, director of Zachry's Equipment Department. "Because GlobalTRACS enables us to track engine hours, we can spot over use and under use, so we can manage our resources more proactively, and thus more effectively. It also helps us bid more accurately on future jobs, since we know what the demands on our equipment will be based on project histories."
Thoutt Brothers Concrete Contractors, Denver, CO, also turned to the GlobalTRACS system to keep track of its scrapers, graders, backhoes and loaders. Before the system was implemented, a lot of time was wasted trying to locate certain pieces. "Sometimes, we would be nervous for days because we couldn't find a piece of equipment," says C.J. Thoutt, equipment manager. "You couldn't tell if it was around the corner or in another state."
Now the company not only has accurate location information - complete with maps and directions - it has records of when the equipment has been running.
"Shortly after GlobalTRACS was up and running, we noticed that a tractor hadn't been used for three weeks," says Thoutt. "The supervisor said he thought it was used every day; but when he called the site foreman, he discovered it wasn't used at all. Without GlobalTRACS, the tractor would have sat there idle, not allowing us to earn revenue on that piece of equipment."
The system has shown a definite ROI. "With the savings in time and expense, we not only save money but ensure customer satisfaction," says Thoutt.
Automation adds accuracy
Automating the collection of utilization data can lead to increased accuracy.
For example, let's assume the break-even for utilization on a particular machine is 70%. "A lot of guys think they are hitting those numbers or better. They think they are profitable," says Tony Nicoletti, director - North American sales, DPL America. "But after the Titan Equipment Monitoring Systems are installed, they come to realize they are getting rates in the 40% to 50% range or worse."
Equipment "hoarding" is one of the biggest reasons, Nicoletti elaborates. A foreman may misrepresent the numbers on a piece of equipment to keep it available on a jobsite. This results in another jobsite having to rent a similar piece of equipment, which is a double hit to the company.
Equipment tracking can reduce or eliminate this problem. "We have one contractor that goes into the Titan software on a daily basis. And if a piece of equipment is not hitting a certain utilization benchmark, he has a lowboy come and take it off the jobsite and redistribute it to where it is needed," Nicoletti says.
The rising cost of oil is also creating a strong demand to track and curb unnecessary idle time. "Numerous contractors have found their equipment will be turned on in the morning and just left idling throughout the workday. That burns a ton of fuel, plus puts unnecessary wear and tear on the machine," says Nicoletti. Equipment tracking systems are able to differentiate idle time from productive time, which allows you to set benchmarks and reduce unnecessary idle time.
You can also track productivity. "For example, managers can remotely track the loads on dump trucks and scrapers, so now they can see how many cycles are being done per day or hour," Nicoletti points out. "It helps when you go to bid and with all of your estimates. When you have that information, it is definitely gold. Before this, it was all second-hand information - manually collected data. Now you have an objective, automated log. It takes out all of the guesswork."
In addition, equipment tracking systems eliminate busy work. "Your job foremen are out there trying to build something. Going around getting this data is something they have to do, but not something they always do well," says McCrady. With equipment tracking, the data comes in an automated fashion. "It doesn't require someone to walk around, find out what the hours are on a machine and report it."
"Part of protecting an asset is knowing about the machine health and being able to maintain it on a scheduled interval," says McCrady.
Equipment tracking systems allow you to streamline service operations by using actual captured operating hours to plan PM functions. "Field service operations are more streamlined, since each technician knows the exact location of each piece of equipment that needs servicing and exactly what needs to be done," says Bill Ritzhaupt, marketing manager, Teletrac Inc. "This saves a great deal of time on large jobsites."
Zachry Construction has used its equipment tracking system to optimize maintenance efficiency. "GlobalTRACS makes it easy to pinpoint the equipment's engine-hour data, as well as its exact location, so our maintenance staff doesn't spend time searching for equipment," says Monnot. "They know exactly where each piece of equipment is and when it needs servicing, which is vital when you have many projects running at the same time that share the same equipment."
The history of any piece of equipment is also right at your fingertips. "You can, at any time, single in on any given piece and see its historical operation," says Nicoletti.
Downtime is minimized by the use of instant alerts if engines begin to overheat, oil pressure drops or air filters plug. "If a threatened condition arises on the machine, someone can get a call right away before it goes to failure," says Nicoletti.
Analyze the data
Once an equipment tracking system has collected the desired data, it can be converted into reports to help you pinpoint areas that require further attention.
"By using the detailed data delivered in a wide range of management reports, contractors can pinpoint any number of operational functions and analyze them for more efficient asset allocation, jobsite planning and individual driver and equipment operator performance," says Ritzhaupt. "Our system delivers all of the information via the Internet... Teletrac Fleet Director also interfaces with many popular back-office accounting, maintenance and routing software packages for added versatility."
If properly analyzed and applied, the data generated can make a significant difference in your operation.
"A random survey of Teletrac customers that was conducted in early 2007 showed the following average results: 13% fuel savings, 15% overtime savings, 13% fewer wasted miles, 12% reduction of unauthorized usage and 12% increase in productivity," says Ritzhaupt. Of course, each operation will experience variances in savings and productivity depending upon their particular circumstances.
Ultimately, the accurate, real-time information provided by equipment tracking can help you get a better handle on your true costs.
"Being able to manage their performance and cost metrics has been a real advantage for contractors that have adopted the technology," McCrady comments. "One of the things they tout is that in future bids, they have much better detail about the machines they need, how many hours they are going to put on them and the kind of timelines it takes to go through a job of a similar nature. So they are being a little more competitive in the bidding process because they have actual data."