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OCTOBER 2013 issue of
Rental Management

Cover story: Telematics
Cover story: Telematics

If you, as a rental store owner or manager, haven’t heard of telematics, you probably aren’t alone. However, this story is your wake-up call.

Telematics, in its simplest form, is defined as machine-to-machine communication. While this isn’t the beginning of Skynet, the organization of artificially intelligent machines that tried to wipe out humanity in the fictional “Terminator” movies, it is perhaps the start of a new era in fleet management.

Today’s construction equipment is much more sophisticated with a variety of electronic and computer-controlled modules that are gathering information about a machine’s performance and communicating with manufacturers that are using the data for research and development to improve the productivity and efficiency of their machines.

The next step is figuring out what information manufacturers are willing to share with their customers — including rental stores — to help them better manage fleets. Already the Association of Equipment Management Professionals (AEMP) is partnering with the Association of Equipment Manufacturers (AEM) to set data standards and come to an agreement on what types of telematics information is needed.

Once that happens — and the AEMP expects this to come to fruition in 2014 — there will be an explosion of data available for rental stores and fleet managers that can help them improve operations and be more competitive.

In many ways, telematics is what those touting global positioning system (GPS) technology said was possible many years ago, taking it beyond just knowing the location of a machine, but tracking run time, fuel usage, oil pressure and more to help diagnose or predict possible problems and cut or eliminate a machine’s downtime.

“Any company that does not eventually use telematics, does not embrace it, does not maximize the benefits and doesn’t do it quickly will become irrelevant,” says Stan Orr, president and chief staff officer, AEMP, Glenwood Springs, Colo.

“Telematics can help drive a company’s maintenance, management, operations and finance, including things like utilization, risk management, when to change the oil or when a fuel truck needs to be on a job site, so that there is no downtime,” Orr says.

Orr says it is common knowledge today that there is a range of 25 to 30 data points and numerous fault codes on a machine that can be communicated to help a fleet manager more effectively manage equipment.

“The challenge is that the data comes from each manufacturer in a different way and it is not standardized. There is a low integration rate of telematics because of the lack of understanding, which means there is a need for training and education for telematics, as well as building a case for the return of investment and standardization. We are rapidly moving toward that,” he says.

As early as 2008, manufacturers agreed on standardizing at least six data points that can be shared, such as hours of operation, location and fuel consumption. Orr believes there will be an agreement on standardizing other data points in 2014.

Orr says all machines built today are “telematics enabled” with manufacturers already using the “fire hose” flow of data to identify issues on machines and, in some cases, correct them remotely for all machines because of the machine-to-machine  communications capability.

“The companies already using the telematics data available successfully on the end-user side — including managers of construction equipment fleets and rental fleets — are getting larger and winning bids. The information is helping them determine how they bid because telematics can tell a fleet manager what kind of equipment, what size, how many horsepower and how big a bucket a person needs to get the job done,” Orr says.

“Telematics dives deep into how that machine works, looking at things like oil pressure, fuel consumption and idle time. Successful companies have not ignored telematics. They already have made investments and they get the results, which helps them make better purchasing decisions as well as when to dispose of a machine or repair it,” Orr says.

“This isn’t just for the national companies, either,” Orr says.

“Independent rental stores can use this information to make decisions about when to do maintenance on equipment like skid-steers and how to maximize the return on investments. Our guys on the construction side of the business are telling us it doesn’t matter how big your company is, you need to use this information,” he says.

“General Motor’s OnStar was really the leader in this space and now there is an entire market of new, emerging and similar applications across a wide variety of both mobile, fixed equipment/assets and even equipment and assets that are non-powered, such as containers, trailers and mobile storage,” says Alex Warner, founder and CEO, Pedigree Technologies, Fargo, N.D.

Pedigree Technologies has been involved in telematics since 2004 when the company started building systems to connect sensor-enabled devices to the web to see things remotely and then won a five-year contract to develop applications for the military.

“We built a system to sense and respond to logistics, maintenance and surveillance that could connect any sensor over any network and pull it into a software system on the web. In 2010, we started to take that technology to commercial markets,” Warner says.

The difference for Pedigree, Warner says, is that the company can bring applications together, so that a customer can manage all of their assets through a single view on an operations platform.

“We help coordinate a business process to make things efficient for maintenance, compliance and more, so that customers have a more horizontal value and can streamline its processes. Machines with telematics generate data. Our job is to make sure we don’t give customers irrelevant data or data that is hard to discern,” Warner says.

Tony Nicoletti, vice president of business development, DPL America, Menlo Park, Calif., has been working with GPS and telematics for 15 years and says rental is becoming a larger market for his company.

“We’ve been in rental for about a decade now. We’ve seen it through the ups and downs and the product was initially specialized for theft prevention and could collect some of the defaults and stolen machine information,” Nicoletti says.

“Now we’re starting to see rental stores come to us who want us to put other things together as well. The cost has come down, installation is easier and the available information allows our customers to do more, like diagnose what’s wrong with a machine remotely,” he says.

Also, machines now can be outfitted with portable units that can be transferred to different machines when they go out on rent.

“In rental, not everything is out all the time, so they want a way to track a machine when it is used and don’t want to have to buy trackers for every machine,” Nicoletti says.

“For rental companies, the basic benefit of telematics is theft protection, but they are now stepping into the next iteration of tracking hours and service, improving efficiency and improving logistics,” he says.

However, he adds that there is a “deluge” of operational data one can get and the next step is figuring out just what rental stores want or need.

“One of our customers had an issue that when a machine goes down, they had to send out a service tech. They had to figure out who is closest to the machine, which they could do with GPS, but the service technician would have to go to the equipment, plug in the diagnostic machine and figure out what was wrong. Then they would have to go get the tools and parts they needed to fix it,” Nicoletti says.

“Now, with telematics, they can go to a website on a computer, see what’s wrong remotely, put what they need in a service truck and send out the right technician. They can make one trip and fix it. That’s one of the biggest benefits that we’re seeing people interested in,” he says.

Nicoletti says the advent of Tier 4 also brings an era of more complicated machines that generate even more data.

“It’s a double-edged sword. There’s data and there’s more data. You only want things that make your job better, make you money or save you money. Today, you can get transmission data and data on the brake system. It’s amazing the data you can get, but the question is, ‘How do you make it useful for the customer?’” Nicoletti says.

DPL America, he says, offers units rental stores can buy or lease and then charges a subscription fee for the service. “That’s it. Everything else we offer is end-to-end. Our products are made in North America and supported in North America, 24/7. We control everything from how you install it, provide the software to manage it and support it. You can make one call for everything,” he says.

DPL America also stores the data indefinitely at no extra charge. “That’s part of our sales pitch. You can go back two days, two months, two years or more,” he says. “Customers can download the data and have it available to them locally, but we also store it for them as well.”

Nicoletti says some rental stores are using the diagnostic capability of telematics to guarantee equipment uptime to their customers. “They can see what’s wrong immediately, fix it remotely or send a service technician to fix it immediately or if it is a larger problem, immediately send out a replacement. For the end-user renting the equipment, a guarantee that the machine will be up and running 24 hours a day can be huge,” he says.

ORBCOMM, Milton, Ga., is another company that is very involved in advancing telematics.

“Telematics is an all-encompassing term with more than just location data. Telematics is making the machine visible to you so that you know what it is doing or not doing in terms of performance, fleet deployment and resource management,” says Bill Purdie, general manager, MobileNet, a subsidiary of ORBCOMM.

ORBCOMM most recently signed a deal to deliver an end-to-end telematics solution tailored for Doosan Infracore Co., providing global satellite data service combined with cellular connectivity through ORBCOMM’s wireless partners, along with hardware and a web-based analytics platform for asset management.

“We also work with different OEMs, so one of our strengths is that we can cross all those platforms and integrate the information about a rental store’s fleet on one web portal,” Purdie says.

“To work with us for telematics, all you need is a website,” he says. “We provide hardware and setup with satellite, cellular or dual-mode communications. We have different models for small machines and more sophisticated equipment for higher-end machines.”

Purdie says the available information can help rental stores better serve customers and be more of a consultant instead of just renting equipment to their customers.

“Customers are renting the machine for the work it does. If you can watch a machine on rental and the customer is running two shifts a day, for example, maybe you could rent them a larger machine that would better suit their needs,” he says.

ORBCOMM’s telematics service can be stand-alone via access to a website or the information can be integrated into a company’s software system. Purdie says they also can help set up ways for rental customers to log into the system and only see information about the equipment the customer has on rent.

“Our first and largest customer had machines scattered around the country. Some machines were used overtime and some were not used very much. We showed them a usage map and they were able to move around the machines to balance the fleet. That started to open everybody’s eyes to what could be done with fleet management,” Purdie says.

The next evolution in telematics, Purdie says, is to remotely provide rental stores with specific information about what is wrong with a machine so that the right person with the right parts can be sent to the job site instead of having to check the machine in person to determine what’s wrong and then travel back to get any other needed parts and tools.

“With electronic control modules with fault codes, we now can transmit that information, so that rental stores know if a machine is running hot, is low on oil or if a filter is plugged. Some customers now can dial in remotely and see how a piece of equipment is running. They can check the fault codes, the history, what it currently is doing and watch it work under load. If there’s a problem, then they can send someone out to fix it before there is damage,” he says.

Telematics also can be useful for rental stores when it comes to billing. Purdie says some customers learned that if they called a machine off rent late on a Friday, the rental store was unlikely to pick it up until the following Monday, so they could continue using the machine for free over the weekend.

“Now, by using our system and systems from others, rental stores can charge by the engine hour every day,” Purdie says.

The rental store perspective

Rich Soltero, project manager, Dahl’s Equipment Rentals, San Jose, Calif., says his company first used global positioning system (GPS) technology on some of its equipment in 2007.

“We were one of the early companies in the game. What drove us were regulations. When we were looking at regulations in California, we saw a section that mandated reporting usage hours by county. We thought the best way to handle that was to not leave the onus on the customer to pour through reports, but rather for us to use technology that could help us provide that service for our customers,” Soltero says.

Once they started using the technology, however, Soltero said the company discovered other benefits. “We had some large customers doing infrastructure work and roads where they have crews that move our equipment and then they don’t know where it is. They would have to track it down and then come back to us six or seven months later and say that technically they only used the equipment for a couple of months,” he says.

“We found GPS to be a good tool to show where the equipment was and how much it ran. In our units, we had remote shut off and could check things like the battery charge, oil level and oil pressure, so it became a tool for maintenance, too. Our units are set for service every 200 hours of run time. We also started using the technology to help unburden our customers from gathering data for California Air Resources Board [CARB] reports and now we see it as an invaluable tool in operating the company,” Soltero says.

With Tier 4 equipment, Soltero sees telematics becoming more important to rental companies. “We haven’t realized the full potential yet. For Tier 4 machines, telematics will be able to tell us when urea is low and when operators are not cycling the engine at a high enough rpm to burn off soot in the diesel particulate filter. That’s when we can initiate a call to the customer or send out a service technician to take care of it,” he says.

Dahl’s currently works with DPL America, Menlo Park, Calif., which has given the rental store administrative rights to the data it has collected on its servers. As a result, Soltero says he can set up accounts for his customers, so they can see where the equipment rented from Dahl is on the job site or check on the productivity of their employees.

Since DPL America also stores data indefinitely, he says he has been able to provide customers with CARB usage reports as necessary, including usage in years as early as 2007.

“This absolutely helps us compete and provide better service to our customers,” Soltero says. “We are in a very competitive market, so we have to use every advantage we can get and this is one of the weapons in our arsenal.”

Finding more applications

Pedigree Technologies, Fargo, N.D., has been involved in telematics since 2004 when the company started building systems to connect sensor-enabled devices to the web to see things remotely. The technology piqued the interest of the armed services with Pedigree winning a five-year contract to develop telematics applications for the military.

“Specifically, we would define telematics as system technology that incorporates hardware  devices/sensors, networks and system software to connect equipment and assets across a broad spectrum of application and uses,” says Alex Warner, founder and CEO, Pedigree Technologies.

One of the next big applications for telematics, Warner says, will be for equipment rental companies.

“Rental companies can use telematics to both streamline rental operations as well as provide new services to their customers and even collaborate with their dealers or OEMS in ways that were not possible before,” Warner says.

Warner says examples of these collaborations could include safety and security compliance, theft prevention and recovery, pre- and post-job equipment inspections, user operation and lockout, improper equipment usage, accident notification or accident recreation, and automation of state and federal regulatory compliance reports.

In addition, he says there are performance, productivity and billing applications through telematics, including a billing model based on actual equipment usage monitoring, reduced billing and turnaround times, dashboards for operator performance and efficiencies, analysis of asset or equipment utilization, telematics-driven job-costing solutions and management of things like fuel usage.

For maintenance, Warner says telematics can offer machine-scheduled maintenance events, optimization of maintenance scheduling, remote diagnostics and error codes, inventory and logistics management, warranty management, parts management, and optimization of customer service and efficiencies.

“Research and development and engineering departments can use telematics systems to analyze how well their products/equipment are working in the field to add value in product design and lifecycles, quality assurance and the development of new and useful features based on how their customers use their products in the field,” Warner says.

In addition, he says internal customer service and after-market departments can help their dealers and customers manage their equipment better by staying connected through telematics and provide better services to aid and support their sales, service and customer field operations.

“Telematics applications also can provide multiple opportunities to bring in new revenue streams or provide differentiated product feature sets and augment strategies that help OEMs provide new products or service that can support their partners and customers in ways that were not technically possible before,” Warner says.

For the end user, Warner says telematics can be effective to aid operations and manage the bottom line. “As strange as this sounds, telematics can literally make your equipment/assets become part of your workforce by reporting in where they are, how much fuel they are using, how they are operating, who is operating it and providing information on a daily, weekly monthly or other basis,” Warner says.

“Telematics data can aid in compliance, safety and operator management, too. If end users know how well their equipment is performing in the field and that equipment is providing daily operational workflow information, then end users can make better operational decisions in ‘real-time,’ driving efficiencies that affect the bottom line much quicker than waiting to see how the organization performed after the  quarterlies come out,” Warner says.

“Getting the job done right and as efficiently as possible is the mission of most operational departments. By using telematics systems, you just asked the equipment you own or use to become part of that mission,” he says.

“Hardware, networking and software delivery technology is advancing so quickly that more businesses and people can access it at a lower cost than historically possible and with higher returns at much lower risks,” Warner says.




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