Moving Data and Dirt
Picture a remote set of boots on the ground that constantly sends out status reports on construction activity across the globe. Now, imagine that existing work tools—trucks, dozers, cranes and drills—are the virtual boots, beaming quintillions of bytes into the ether every day.
This is how John Meese describes wireless telematics, which the senior director of heavy equipment for Waste Management, Houston, uses to keep tabs on a fleet of more than 5,000 pieces of machinery scattered across 700 locations in North America. Meese and his team use this data to schedule maintenance, train operators and gain other efficiencies.
"I don't have sufficient feet on the ground to see what is happening at every location," explains Meese, who estimates that, by the end of this year, Waste Management will have wired up about 20% of its fleet with telematics.
Monitoring so many machines represents an annual investment costing hundreds of thousands of dollars, but Meese has found that the data pays back in reduced breakdowns and costly downtime. Upfitting the machines and subscribing to the data feed is the easy part; the hard part, he and others note, is managing the data, which, in itself, has become another maintenance item.
"More technologically advanced equipment is a double-edged sword," Meese explains. "We can see more rapidly issues with machine health. At the same time, that means the machine is more complicated."
"Telematics" is a general term that applies to any mobile vehicle, tool or device, usually wired up with sensors, that sends information into a cloud. For years, this capability has been important to logistics operations, such as at NASA, Walmart and FedEx, but is gradually sinking into other industries, construction among them. Adoption rates are quickly increasing as more machines are leaving the factory with the necessary hardware built in, and costs are coming down for wireless monitoring services.
Because of today's complex emission controls, it's difficult to buy a piece of heavy machinery that is not equipped with some kind of data-feed capability. This development is helping fleet managers to diagnose, maintain and route machines more efficiently. Some are using this data to manage beyond the machine and identify risks, such as failures, claims, training gaps or even deadly accidents before they happen.
Caterpillar Inc. is one company trying to get ahead of this analytics curve. On March 5, the earthmoving manufacturing giant announced that it was investing in a technology start-up called Uptake, whose platform "takes massive data provided by sensors, combines it with data science to understand signals and patterns, and deploys insights in real time that save money, optimize performance and prevent unplanned downtime," according to Brad Keywell, co-founder and CEO of Uptake. "We want to empower our customers with the insight necessary to shift from a reactive 'repair after failure' mode to a proactive 'repair before failure' stance," adds Doug Oberhelman, Caterpillar's chairman and CEO. Prior to the announcement, Uptake had been working with Cat to refine its locomotive business.
As big data moves into big iron, new services—such as productivity benchmarking, using dump-load counters and other tools—become possible. Remote diagnostics also are gaining ground. By helping fleet managers improve equipment availability through timely data, manufacturers are helping dealers stock parts and sell services more efficiently.
While telematics could improve sales margins on parts, suppliers note that their mission is to keep clients up and running. "The customer is in control of everything," explains Dave Stafford, technology application specialist for Caterpillar. "The system lets the customer know when the maintenance is due and will give a list of parts required for that service." With clients' permission, dealers also can use Cat's VisionLink platform, developed with Trimble, to monitor fleets.
Dealer monitoring "is big right now," says Todd Perrine, vice president of product support at Leslie Equipment Co., a John Deere dealer in Cowen, W.Va. The company currently is monitoring some 1,200 machines on behalf of customers. A typical service call costs $2.50 per mile and $90 per hour; because many machines are at least an hour away, that adds up to $800 to $1,000 "just to look," Perrine says. If a dealer technician can see what needs to be fixed beforehand, then telematics may save an extra trip or two back to the parts depot. That efficiency pays for the cost of the monitoring service, which is about $50 per machine per month. "That's where you justify it," Perrine says.
However, not all dealers are up and running with their monitoring programs. "We have some dealers that are very proactive in that business, and others are just a little bit slow," says Meese. "It's like individuals having a hard time getting their arms around what to do with their new smart phone." Fleet users still need to set up an "alert tree" so that critical information is getting to them, he adds. Different fleets may redefine what is critical to monitor: Most of Waste Management's equipment operates in a controlled area, so knowing vehicle location is not a priority, Meese says. However, contractors working on large, remote jobsites say they are finding more value in that type of data.
"We use telematics a lot for equipment location," says Thad Pirtle, vice president and equipment manager for heavy contractor Traylor Bros. "If a supervisor needs a welding machine or air compressor and it is 500 feet away and available, he can go get it." Idle time is another problem. It is not uncommon for an engine to idle 80% of the time on a construction project. Pirtle says he'd like to see that number cut in half or more. Without telematics data to help fleet managers track actual usage, achieving an idle-reduction goal becomes more difficult. "You can't swim faster in a race if you don't know where you are in the race," Pirtle says.
From location and idle time to diagnostics and driver behavior, the data possibilities are enormous, and most telematics users are getting started. Fleets typically are tracking simple data points: machine health, fuel consumption, location and hours of operation, according to market research firm Frost & Sullivan. It estimates that telematics has penetrated just 12% of the construction market. Manufacturers suggest the number is double that or even higher. Deere offers three years of telematics service included in the price of about 100 equipment models and notes that between 20% to 30% of fleets are actively using the service, which is growing at a rate of 14% annually.
"Based on our own internal market research, we understand that mega or very large contractors are even more likely to be using it—up to 50%—as they leverage the data to manage projects more effectively," explains Jena Holtberg-Benge, director of John Deere WorkSight. Telematics also is helping users to stretch out equipment life. Last year, Deere started selling a five-year subscription as an option, and it has taken off.
"We believe this is largely due to the length of ownership for customers now—five years versus three—and their desire to have their dealer monitor their machine, help them maintain it and even manage it during a lease period," she says. Perrine notes that one- to three-year leases make up about 50% of his deals today and expects leases to account for as many as 80% by the end of the year. When fleets use telematics, dealers have a better grasp of their utilization. "It causes some havoc as far as having machines sent back," Perrine adds. "But they like it because we are looking after their stuff."
Rental companies, which own some of the largest fleets in the world, are racing to telematics. United Rentals has a goal to put tracking devices on 85% of its fleet. Today, it has about 30,000 machines reporting into the cloud and plans to have 150,000 units, or roughly 40% of the fleet, wired up this year. It uses telematics to help with billing but also makes data available to users to help them manage their projects.
"We are seeing the mainstream really picking it up now," says Helge Jacobsen, United's vice president of operational excellence. For consistency of data, he adds, the company is installing a third-party device on machines, rather than relying on factory-installed boxes. "That is the easiest way to ensure that we get the full access to the data in a format that we can present to our customers," Jacobsen says.
Achieving a standard data protocol is one of the main challenges impairing adoption. This is changing, though. Fleet owners active in the Association of Equipment Management Professionals have developed a standard Application Programming Interface (API) that includes nearly two-dozen data points and fault codes for general equipment. The group expects to receive certification from the International Organization for Standardization (ISO) by the summer. The standard is significant for equipment users, who for years have struggled to pull fleet data into their enterprise programs, and for manufacturers, who sell machines all over the world. AEMP now is developing standards for cranes and other specialized machinery.
Manufacturers have been slow to allow users access to telematics information, partly because it helps factories track warranties, defend against false claims and improve their own designs. But thanks to AEMP, original equipment manufacturers (OEMs)—Caterpillar, Deere and Komatsu, among them—are working to make their built-in telematics devices speak a common language. Others are making their machines "talk" to hardware that third-party providers supply.
"OEMs are not super fired up about providing any telematics provider with some of their proprietary coding," says Sean Stenson, national sales manager for Verizon Networkfleet. However, manufacturers can't afford to push back too hard. Caterpillar has long recognized that if it doesn't help users with telematics, "we are just going to become a carrier for the technology," Stafford says. As such, some users expect telematics to become just as important as the machine itself.
General Motors this year is now including a telematics device built by Telogis as part of its standard factory OnStar package. This integration allows users of most 2015 GM vehicles to do more remotely, such as shut off an idling truck or connect mobile devices to the vehicle, which, for a monthly fee, now can have a 4G LTE hotspot.
Ford Telematics, a dealer-installed option, formerly called Crew Chief, is now available globally for the first time this year since it was launched in North America in 2009. The off-road sector is "a more conservative space," admits Frank Schneider, product manager for Telogis. Smaller machines, for example, do not always come with built-in telematics.
"It's easier to hide the cost of the device and the wireless service on a $200,000 machine as compared to a $40,000 Bobcat skid-steer loader," says Michael Reinhardt, telematics strategy manager for Doosan and Bobcat. All Doosan-brand machines, except mini- excavators, now include telematics, he says.
Komatsu claims to be the only OEM that provides telematics for free for the life of its machines; most others offer a free trial period. Launched in 2006, Komtrax helped the manufacturer debug emission controls on early machines entering the field so it could improve reliability on subsequent units. In summer 2011, as a new round of clean-diesel machines were entering Canada, Komatsu noticed that diesel particulate filters (DPFs) were exhibiting "strange behaviors." Dealers made some tweaks and avoided serious downtime for U.S. customers.
"Big data has helped engineering and service departments," says Goran Zeravica, distributor development manager. Komatsu also has used real-world data to help customers schedule maintenance, such as time associated with active regeneration cycles, an annoying process that can render a machine inoperable for several minutes or longer. On certain occasions, the DPF inside a clean-diesel machine will need to inject a small amount of fuel into the tailpipe to burn off soot. Komatsu discovered through telematics that these cycles make up for 2% of 22 million hours of operating time and advised clients accordingly. "You could decline it several times throughout the week and deal with it on Friday, when the week is over," Zeravica says.
As fleets gain more experience with telematics, some are finding new uses for the information: Used equipment buyers often look at maintenance records before bidding, but savvy ones are taking the extra step of downloading telematics history before making an offer. "In less than 10 minutes, you know everything about that machine," Meese says. Used machines that come with telematics data can command a higher resale value. Also, pre-shift inspections can be completed on a smartphone or tablet and tied to a specific machine with photos attached. Fleets also are using telematics to monitor operators and help them improve.
"If you compare one machine to the other, and one is getting good fuel economy and the other not so much, the difference is likely the operator," Stafford says. Telematics is helping firms cut down theft, false claims and insurance premiums. "If you take advantage of the information available you will have an opportunity to lower your insurance rate," says Stenson, who adds that one Verizon client now saves more than $200,000 a year in insurance claims.
Experts caution that staffing and training must be adequate to handle the data. Generally speaking, one person can monitor 400 to 500 assets on a regular basis, estimates Meese. Some companies may not have the extra hands and opt to pay a dealer to do this for them. Liability is another concern, but fleet managers like Daniel Samford, vice president and equipment manager for Herzog Contracting Corp., says that the new knowledge brings new responsibilities:
"We used to think what we didn't know couldn't hurt us," he says. "But I think now, with the availability of information that's out there, what we don't know can be used against us as well as cost us the competitive advantage." Still, many fleet managers and suppliers are sitting on the sidelines. "They are waiting to see where it all goes," Samford says. "Well, it's moving forward and leaving them behind."
