Small Contractors Size Up the Benefits of Telematics
A little information can go a long way in a highly competitive, cost-conscious business like construction. Just ask Maurice Piersol, president of Piersol Construction.
A family-owned civil contractor with approximately 50 employees, Piersol’s firm performs most of its work at commercial projects within a 20-minute drive of its base near Spokane, Wash. With most of its fleet equipped with GPS-enabled telematics technology, a quick check of his computer or smartphone is all Piersol needs to determine which vehicles are best positioned to handle a last-minute change.
“I can see where each truck is headed and notify that driver to divert to a different job rather than calling around,” he says. “It’s a big savings in keeping multiple crews supplied with product.”
Telematics also helps Piersol manage labor costs with precision on federal projects that have specific wage requirements, and to verify claims and change orders. And when a water truck went missing, Piersol needed less than an hour to locate and recover the vehicle, which was found 350 miles away.
“That paid for the system right there,” he says.
Piersol is hardly the only small contractor using telematics for asset management and other purposes. But his experiences, and those of similarly sized counterparts, show that this relatively new technology isn’t solely the domain of large builders or rental companies.
If anything, telematics technology is even more beneficial to small construction firms, since they often lack the administrative resources, not to mention the time, to track equipment location, activity and maintenance needs in real time.
“Sometimes, small contractors are better users of the technology because they need more from it,” says Tom Remy, senior manager of Aftermarket Sales for Topcon Tierra, which supplies Piersol Construction’s telematics units and software.
Multiple technology trends also have converged to enhance the utility of telematics for small contractors. Chris Ransom, a solutions engineer for Verizon Connect, considers mobile technology the biggest enabler for small firms, particularly since their upper management is usually in the field.
“Ease of use has also become paramount because most small businesses don’t have an IT staff or other experts to manage it,” Ransom adds.
Yet many misperceptions about telematics persist among small contractors, most of them related to cost. Sean McMurrey, product manager for Hilti North America’s Hilti Connect and On!Track asset management systems, understands contractors’ wariness to invest in equipment and installation, plus the monthly provider fees, when dealing with small margins and erratic business cycles.
“Some (firms) try to save with free technology available on the internet, but those systems are rarely tailored to a contractor’s needs,” he says. “In some ways, those systems slow things down, rather than enhance efficiency.”
McMurrey says the payback of telematics needs to be balanced against benefits and savings in other areas. For example, contractors often can’t keep track of the tools they have, where they’re located or what they’re being used for.
“If they need something quickly, the only alternative may be to buy or rent it,” he says.
Lost and misplaced tools were proving to be a particularly expensive problem for One Source Building Services, an 80-person school-renovation specialist in Plano, Texas. Project manager Christopher Lloyd estimates the firm lost as much as $25,000 worth of tools per year.
“There was no accountability,” Lloyd says.
Hilti On!Track’s combination of radio frequency identification and barcode tags now provides One Source with a better way to track its inventory of drills, handsaws, ladders and other tools. Using a mobile app, the firm’s foremen can instantly survey a site to make sure all items assigned to a particular project are still there.
“Web integration allows us to access the data at any time from any location, which is another big benefit for our managers,” Lloyd says.
Information On Demand
Matthew Hendry, technology field support specialist for Caterpillar, adds that the connectivity benefits of telematics equipment go beyond simply tracking operating hours and locations. The data also help contractors stay on top of routine maintenance, thus minimizing the risk of unplanned downtime.
“Even for small contractors, idle time can be a significant cost driver—not just the extra fuel—but more importantly, the unnecessary maintenance expenses, accelerated component wear, wasted warranty hours and threat to resale value,” Hendry says. “Tangible data about current idling practices—at both the fleet level and operator level—allows contractors to identify problem areas, set improvement goals, initiate change and measure progress.”
Bill Howe Plumbing of San Diego is among the contractors that have taken full advantage of telematics data to provide alerts for regular oil and filter changes, as well as tire rotation and brake inspections on its 150-vehicle fleet.
“We avoid major repair issues, and our drivers don’t have to worry about tracking mileage for preventive maintenance themselves,” says Rhett Wheeler, the firm’s operations risk manager.
He adds that the firm’s recent upgrade to a more robust telematics system from Verizon Connect has also helped to significantly lower its accident rate. After recording 16 incidents in 2016 totaling $1 million in damage, Bill Howe Plumbing’s vehicles logged 2.5 million miles in San Diego County last year, with zero accidents.
Many contractors of all sizes are using telematics’ real-time monitoring of not just vehicles and equipment, but also employee time and safety practices, such as staying within speed limits and preventing unauthorized use of equipment. That, in turn, has given telematics a “Big Brother is watching” connotation in some quarters, with concerns about employee privacy.
Wheeler responds that, if anything, telematics data on his drivers’ safety records is a positive morale booster. “The people who were misusing vehicles or being repeatedly cited for speeding are now some of our safest drivers,” he says. “They appreciate the documented evidence of good performance and challenge each other to do better.”
As telematics technology gains more features and becomes more ubiquitous in construction equipment, small contractors may become increasingly tempted to perform their own feasibility studies. Hendry advises small firms to start slow and first decide whether a telematics solution truly helps address a pressing business question or challenge, both now and in the future.
“A small contractor may start by simply tracking hours and location to better schedule and manage PM services,” he says. “Once they have improved this part of their operation, they may be ready to explore other areas of opportunity like reducing idle time or fuel burn. Having a telematics solution that can provide these additional data points could really help in the long run.”
Small contractors can also look for technology partners that assist not only with identifying the most suitable solutions for current and future equipment inventory, but also in navigating the learning curve.
“Look for an organization to help you get on board and who can most easily get you to a desired goal and beyond,” Ransom says.
Al Cervero, senior vice president with the Association of Equipment Manufacturers, believes that simply asking what can be done with telematics is valuable for a small contractor.
“It’s important to take advantage of whatever technology will make you more efficient,” he says, adding that the next phase of telematics evolution—capturing and using production data for more informed and precise bids—offers more exciting possibilities for the industry.
“Some larger contractors have been moving down the road with this already,” he says. “There’s no reason smaller contractors can’t do it as well.”