In a recent article in the Wall Street Journal, an example was given about how a construction company saved $150,000 solely by embracing simple technology that is available for heavy equipment. Daniel Samford, a vice president who manages the fleet of equipment at Herzog Contracting Corp., made a decision not to purchase a new wheel loader—at a cost of $150,000—because his company had implemented electronic GPA tracking systems on its equipment.
With a click of his mouse, Samford determined that his company — which has 2,000 pieces of equipment deployed throughout the country — had an underutilized wheel loader on a job in Dallas. He made the decision to send the loader to Missouri where it would be put to better use instead of buying something new. Just a few years ago, Herzog wouldn’t have given a second thought to purchasing a new piece of equipment instead of making the transfer. Without the new tracking technology, it was almost impossible to monitor how each piece of equipment was being used.
The tracking systems (known as telematics) feature global-positioning technology and wireless communications devices that gather and transmit data which can later be analyzed in the comfort of an office. Telematics systems have been in use for decades but previously were utilized mostly for theft prevention or to help prevent operators from idling too long and wasting fuel.
According to the Wall Street Journal article, major equipment manufacturers like Caterpillar and Komatsu are urging contractors to use the new technology even it means losing out on short-term sales. Heavy equipment company executives believe that by offering beneficial advice, they will establish a long-term “consultative relationship” and more loyalty. In addition, companies can continue to make profits by selling replacement parts which, many times, have a larger margin than new equipment. Kamatsu utilizes a patented KOMTRAX technology for telematics and it is offered as part of every stock piece of equipment.
According to James R. Hagerty, the reporter who wrote the story, collecting and analyzing the data has other benefits in addition to cost-savings. Hagerty wrote the following: “Usage of the devices also provides copious data to both the customer and the manufacturer about how equipment is being used and how often it breaks down, among other things. That helps the manufacturers improve designs and forecast demand for new equipment and replacement parts. (Customers can refuse to let manufacturers see the data, but few do that.)”
At North America Heavy Equipment Training Services, we love to hear about companies maximizing efficiencies and using the best data to operate at a high-level. Another major part of operating at a maximum efficiency is to have the best trained staff possible. Please contact us at any time to discuss how we can help train your team. Thanks for reading.
Image courtesy of KomatsuAmerica.com