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.