Unleash A Powerful Management Tool

If there exists a single technology with the potential to change how you manage your equipment fleet, it’s the emergence of wireless equipment tracking systems.

Imagine getting accurate, to the minute utilization reports for each unit based on actual run time instead of optimistic estimates from the field. Imagine the ability to locate units at the press of a button and get exact hour meter readings.

Imagine receiving automatic alerts when a unit’s coolant temperature rises too high or the oil pressure drops too low. Imagine the peace of mind that comes with the knowledge that you will be notified immediately if your equipment is moved outside of set boundaries or if it’s started at an unauthorized time.

Today’s wireless tracking systems make this, and much more, a reality.

A True Management Tool

“Hidden” equipment charges can quickly eat into profits. “Most jobs, from a contracting perspective, show about 3% to 5% more profitability at the end than about a month later when you start reconciling all of the equipment costs,” explains Tim Lewis, senior director for the QUALCOMM wireless solutions construction equipment business unit. “Equipment typically is from 8% to 15% of the job cost. But you can have 3% to 5% creep out there because of the hiding and hoarding that goes on.” For example, the supervisor on the jobsite knows he will eventually need a piece of equipment, so it is simply held on the site.

At a management level, it’s important to know how much work a unit actually produces. Wireless tracking systems independently verify start and stop times. “Management can get idle vs. work times,” says Lewis.

Some contractors have been able to justify the cost of the systems just on fuel savings. “People are running them idle when they shouldn’t be,” says Lewis.

On trucks and service vehicles, you can set speed alerts. “With these types of vehicles, every 5 mph over 60 mph will burn 20% more fuel,” explains Henley. “So if they are traveling at 70 mph, they are burning 40% more fuel.”

So in simplified terms, the main benefit of these tracking systems is better control of your fleet. “Typically, 33% of the cost of running a fleet is directly controllable,” says David Starr, vice president of customer solutions, Satviz Inc.

This includes wasted fuel, vehicle abuse, etc. This is where these systems can quickly pay for themselves.

Timely Maintenance

Wireless tracking systems also offer many benefits in terms of maintenance. “If you are going to reduce your owning and operating costs, you want to have world-class preventive maintenance,” says Lewis. You need to know where your equipment is and when the service is due.

Timing is critical. “You don’t want to over-maintain or under-maintain,” says Lewis. “It gets expensive either way that you go. ”This is where the accuracy of traditional hour meters also comes into play.

“With engine hours on most machines, the display can be off. We have customers that have demonstrated equipment engine hour display errors of as much as 40%,” says Lewis. “A lot of them are averaging 20% to 30%.” Tracking maintenance or utilization by these hour meters is not as accurate as you might think. The accuracy of the tracking systems, on the other hand, is very precise.

With these fleet management systems, you can get advance notice that equipment service is coming due and reduce the unpleasant surprises that often occur while reading hour meters in the field. There is less chance equipment will be overlooked and you no longer spend hours trying to locate equipment. In addition, you get immediate notification of problems such as overheating, low batteries and oil pressure, which can help cut downtime.

Reduce Losses

The insurance industry is helping drive the growth of wireless tracking systems. “Insurance companies, in some cases, are requiring that contractors have asset location devices on there because of theft,” says Henley.

Management can define geo-fences (arbitrary boundaries that the equipment is not allowed to leave). If a piece of equipment is transported outside of a defined boundary, the owner can be alerted via computer, cell phone or pager. You can also be notified if the equipment is started during off hours.

What about trying to disable the system? “You can get an alert if somebody tampers with the box or clips the antenna,” says Henley.

“You can also enable or disable the ignition systems,” says Phil Gabriel, vice president, sales, CSI Wireless Inc. “You can do what we call a lockdown between certain hours. So all of this equipment is disabled and then re-enabled before the workday starts — all remotely, all automatic. So there are a number of unauthorized use or theft deterrents that can be implemented.”

Cost Proposition

There is a wide variation in the costs of these systems. “Obviously, the higher the initial cost, the more compelling the return on investment proposition has to be,” says Gabriel.

In general, the more reports that you generate in a given time frame, the higher the cost. Equipment that reports in once every 15 minutes will be much more expensive than systems that report in once a day.

Hardware can cost from $500 to $1,500 per vehicle, depending on which system you choose. Monthly fees depend on the type of service, how much data you are monitoring and how many reports you generate. Typically, monthly fees range from $10 to $45 per vehicle.

But the return on investment can be much greater. Theft prevention, while important, only represents 2% to 5% of the overall value proposition, says Lewis.

“There is a huge value in everything from managing your work to job costing, maintenance and owning and operating costs. It’s not just the equipment manager, it’s the accounting, it’s the finance, — it’s the project manager.”

Contractors Adopt Wireless Tracking

Adoption of wireless tracking is not as simple as it first appears. It requires a change in management practices to profit from the new data being generated.

One of the contractors implementing the technology is Zachry Construction, based in Texas. It selected the QUALCOMM GlobalTRACS equipment management system for its entire heavy equipment fleet. “We reviewed several wireless equipment management systems before we chose GlobalTRACS,” says Mike Monnot, equipment department director for Zachry Construction. “The system will enable us to be more competitive by allowing us to monitor accurate equipment usage data, perform timely maintenance and increase security for our equipment.”

Another contractor that already has several years of experience with wireless tracking systems is Housley Communications Ltd., Carrollton, TX. The firm is in the utility construction business. “We run about 300 vehicles and in the neighborhood of 500 pieces of equipment,” says Dave Meek, vice president of engineering and construction.

Housley Communications installed its first wireless tracking systems about three years ago. But it wasn’t an instant success. “We were fairly disappointed in the technology with the first few systems that we had,” explains Meek. A lack of adequate coverage created challenges.

“We were sold units in the beginning that we were assured would cover anywhere,” says Meek. The equipment is often used in the remote regions of Texas, where the previous providers’ cellular service did not work. “When you get back off into the woods, or in the desert of West Texas, there is no cell coverage,” he continues.

“We would lose the signals for days at a time. Then all of a sudden the equipment would show back up because it had finished what it was working on in the field and it was headed toward home.” Fleet Management Solutions (FMS) provided a more effective solution and coverage is no longer an issue.

Justifying the purchase of the equipment tracking systems has been easy for Housley Communications. “We received a discount from our insurance carrier, which more than paid for the equipment,” says Meek. “The monthly service fee is pretty nominal when you consider that we have already saved three pieces of equipment that were stolen and recovered right away because they have tracking units in them. You only have to recover one $50,000 backhoe to make that worth its while.”

But it doesn’t make sense to install these devices on every piece of equipment. “Anything that costs less than about $20,000 we typically self insure,” says Meek. The systems are used on the larger, more expensive, equipment.

“We probably have 300 tracking units between equipment and vehicles,” he adds. Right now, there are three different systems in use. But they are being consolidated as older units are replaced with the FMS systems. “I think we have 175 FMS units. We are happy with them thus far. I don’t think we have had any failures.”

Durability was a concern with the other systems. “(The previous suppliers) did not build a unit that was meant for heavy equipment,” says Meek. “They put them in shock-resistant boxes, packed them with foam and so forth, but the units just were not made to take that kind of beating.”

Meek says these systems address the two key concerns — maximizing utilization and retrieving stolen units. He explains that he needs to know if he can get by with 10 fewer backhoes through better utilization and moving them around. With these systems, manual hour tracking previously performed by supervisors is now captured automatically. Logistics have also improved. “It is much easier to know where the equipment is,” he adds.

Meek feels there are more benefits to be discovered. “I’m sure it does a whole lot more than I am aware of,” he admits.

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