Drive Down Construction Equipment Ownership Costs

Today’s fleet management GPS are sophisticated enough to lower costs and improve efficiency.

If you do not use a GPS-based fleet management tool, you might be surprised to discover the impact this technology can have on your bottom line. GPS-based fleet management systems, which have proven to be successful in the railway and trucking industries, also offer operational and administrative efficiencies to the heavy equipment world.

These GPS platforms can be used strategically to manage maintenance, monitor critical system outputs and failures and speed up theft recovery by tracking the unauthorized movement of heavy equipment. Today’s systems are sophisticated enough to help you improve operating efficiencies, calculate life cycle costs and lower your cost of ownership.

Resource Allocation

Bill Purdie, president of MobileNet, Inc., a provider of satellite-based mobile data monitoring solutions, says satellite-based fleet management tools can help owners determine resource allocation. “As owners, you can now know how much a machine has worked in a day no matter where it’s located. Money can be saved just managing equipment that sometimes an owner can’t even see, and nationwide, these tools are balancing resources with needs,” Purdie says.

With the purchase of most new excavators, wheel loaders, articulated dumps trucks and other heavy equipment, it is not necessary to research and shop for a fleet management system. Typically, the systems come pre-installed with a module embedded in the cab that transmits and receives information, communicating it to users through a dedicated website. Owners or fleet managers can access this information from the manufacturer’s website interface on a computer, cell phone or any other web-enabled device.

Some manufacturers offer the fleet management service free for the first year of ownership. Following the introductory period, typical GPS services will be priced similarly to the monthly cost of a cell phone data plan, says Chad Ellis, the heavy product manager for Doosan. Ellis says a GPS plan provides data that can increase productivity and operational streamlining.

“You can make the argument that one month’s service for all the benefits of a GPS system is less than your cost of ownership for a day’s operation on many types of machines,” Ellis says.

Despite the relatively low annual cost associated with detailed asset use and security capabilities, it can be easy for some users to dismiss the technology as too difficult or time-consuming. “That’s a misperception. It takes a little bit of time to learn and set up the first time, but after that, it’s a matter of monitoring on a daily basis. The thing that can be most time-consuming is physically going out to see the equipment,” Ellis says.

Ellis compares the operation of fleet management tools to the usage of word processing tools. “It’s as simple as using Microsoft Word and Excel—we don’t even give it a second thought anymore. The more frequently people use it and the more information they can glean, it will become part of their routine.”

Enhanced Security

The National Equipment Register (NER) estimates the total value of equipment stolen from construction sites to be between $300 million and $1 billion annually and rising. These estimates do not include indirect costs from business interruption, such as short-term rental costs, project delays and lost production time. Because equipment thieves frequently target open construction sites rather than secured dealer lots, the National Insurance Crime Bureau (NICB) suggests installing a tracking transmitter system in each unit designed to track mobile heavy equipment.

Due to their satellite intelligence, leading GPS systems allow users to configure a geo-fence around equipment areas that can be measured to the nearest mile. With defined zones, users can program an alert that will notify them when their machine unexpectedly moves beyond that predefined space. This capability provides the precise location of a piece of equipment, which speeds up the recovery time. Some insurance companies also recognize the installation of reputable security devices for heavy equipment and may provide discounted premiums on certain coverage plans.

 Improved Productivity

Most fleet management systems typically capture and log the following productivity benchmarks:

• Engine hours
• Engine start counts
• Total work hours
• Fuel consumption
• Idle time
• Operator and job accounting data

When collected and evaluated, these data elements can be configured into reports, and alerts can be set that allow owners or fleet managers to tailor their system to their specific needs, which ensures high productivity.

Preventive Maintenance

GPS applications can also monitor preventive maintenance schedules. Users can set program service intervals that will alert them to check high-use components and lubricants. For example, Ellis says users can proactively avoid pump failure by heeding alerts, but operations with more than 10 machines may find it difficult to keep up with each of their machine intervals without a systematic approach. 

“A machine could easily go 500 hours or more over their routine maintenance intervals unless you’ve got a mechanic that checks them regularly. Fleet management tools just take the guesswork out. You can have the system start alerting you 100 hours before a service interval,” Ellis says.

Precise Diagnostics

Diagnostics can communicate fault codes on engines, errors on other critical machine systems and all major outputs from the hydraulic groups. Some systems allow users to receive designated alerts and determine what may be occurring before scheduling a service mechanic. 

“These alerts may confirm that the correct parts are brought to a jobsite. By telling a mechanic the codes, a service plan can be developed and implemented without the mechanic having to travel to the machine,” Ellis says.

Questions to Consider

Many have the misunderstanding that GPS solutions only provide value by showing a machine’s location displayed on a street map. However, the technology not only pinpoints a machine’s position, but it also provides additional visibility into several aspects that contribute to a fleet’s return on investment and its capacity to generate profit through leasing and/or rental arrangements.

Answer the following questions about your equipment to determine if a GPS-based fleet management system would reduce your cost of ownership:

• Where is it located?
• When is it due for maintenance?
• How long did it operate today?
• How many hours are on the engine?
• Is the oil pressure low?
• Is it productive or idling?
• What is its fuel efficiency?