Telematics for Construction: How to Leverage Data to Improve Project Profitability
May 25, 2024

Telematics for Construction: How to Leverage Data to Improve Project Profitability

In the dynamic construction industry, streamlining efficiency and cutting costs are never-ending challenges. This is where construction telematics comes in as an advanced tool. It involves data collection by devices installed on heavy construction equipment to gain valuable insights into your fleet operations.

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But how exactly does telematics translate to construction equipment productivity and ultimately, project profitability? Let's look into this powerful fleet solution and explore how it can boost the profitability of your construction business.

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What is a Telematics System?

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A construction telematics solution is essentially a combination of GPS (Global Positioning System) technology, equipment diagnostics, and wireless communication. Telematics devices installed on your construction equipment, collect a wealth of data, like equipment location, engine performance, fault code diagnostics, etc.

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Features of Telematics Systems Relevant to the Construction Fleet

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Construction telematics systems go beyond just data collection; they offer a powerful feature set specifically designed to empower construction businesses in managing their fleets. Let's learn these features and explore how they translate into improved efficiency and cost savings.

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1. Real-time Equipment Location

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Imagine yourself being able to track the exact location of every excavator, dozer, or loader in your fleet in real-time.Β 

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  • Asset Allocation:Β 

Knowing the precise location of your equipment allows you to allocate the closest available asset to a new construction site, optimizing response times and minimizing travel time. This results in increased productivity and improved crew efficiency.

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  • Asset Utilization:Β 

Real-time location data helps you identify idle equipment. By analyzing historical location trends, you can optimize equipment deployment and ensure your assets are working where they're needed most. This eliminates unnecessary transportation costs and maximizes the return on your equipment investment.

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2. Maintenance Alerts

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Unexpected equipment breakdowns can delay the project timelines and lead to costly repairs. Fleet management software with integrated telematics systems becomes your proactive maintenance partner through the maintenance alerts feature:

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  • Preventive Maintenance:Β 

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By analyzing engine performance data, the system can identify potential equipment issues before they escalate into major breakdowns. This allows you to schedule preventive maintenance interventions, minimizing downtime and associated costs.Β 

Early detection of problems also extends the lifespan of your equipment and optimizes its performance.

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  • Service Scheduling Optimization:Β 

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Telematics data allows you to schedule maintenance based on actual equipment usage patterns rather than relying on generic manufacturer recommendations. This optimizes maintenance costs and ensures your equipment receives the attention it needs at the right time.

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3. Fuel Usage Monitoring

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Fuel costs represent a significant expense in construction projects. As a construction fleet manager, the telematics system provides you with a powerful tool to monitor the fuel consumption of your entire fleet:

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  • Fuel Efficiency Analysis:Β 

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Track fuel usage for individual equipment and identify assets with excessive consumption. This data can help you identify potential problems such as faulty fuel injectors or inefficient operator behavior.

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  • Fuel Cost Savings:Β 

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By pinpointing areas for improvement in fuel efficiency, you can implement strategies such as route optimization, operator training on fuel-efficient operation techniques, and identifying equipment malfunctions that might be leading to higher fuel consumption. These strategies translate into significant cost savings on your fuel budget.

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4. Operator Behavior Monitoring

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Your construction equipment operators play a crucial role in its performance and efficiency. Fleet management solutions featured with telematics systems do offer the operator behavior monitoring functionality to gain valuable insights:

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  • Fuel-Efficient Operation:Β 

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The system can identify instances of harsh acceleration, excessive idling, and speeding. By monitoring these behaviors, you can implement operator training programs that promote fuel-efficient operation techniques and safe driving practices. This not only reduces fuel costs but also improves safety on the job site.

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  • Equipment Abuse Detection:Β 

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Telematics data can help you identify potential equipment abuse, such as operating outside designated RPM ranges or overloading the equipment. Early detection allows you to address these issues and prevent premature equipment wear and tear.

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5. Hours of Service (HOS) Regulations:

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The construction industry thrives on efficiency, but it also operates within strict regulations. One crucial aspect is Hours of Service (HOS), which dictate the maximum amount of time construction equipment operators can legally drive or operate machinery.Β 

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Here's how telematics simplifies HOS compliance in construction:

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  • Automatic Data Recording:Β 

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Telematics systems seamlessly collect real-time data on equipment operation, including engine on/off status, location, and timestamps. This eliminates the need for manual paper logs, a common source of errors and discrepancies.

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  • Driver Activity Tracking:Β 

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By monitoring engine activity and location data, telematics can identify periods of driving and on-duty status. This allows for accurate tracking of HOS for each operator.

  • Alerts and Notifications:Β 

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Telematics systems can be configured to send real-time alerts when an operator approaches their HOS limits. This proactive approach prevents violations and ensures operators take timely breaks to comply with regulations.

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  • Data-Driven Reporting:Β 

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Telematics generates comprehensive reports that provide a clear picture of HOS compliance across your entire workforce. This data empowers construction businesses to identify potential issues and implement targeted training programs to promote compliance.

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6. Utilization Reports

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Data without insights is like a treasure chest without a key. Telematics systems don't just collect location data; they generate comprehensive utilization reports.Β 

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These reports provide a clear picture of how your equipment is being used:

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  • Equipment Usage Analysis:Β 

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Gain insights into how often each piece of equipment is being used and for what duration. This allows you to identify underutilized assets and optimize deployment strategies. You can potentially reallocate underutilized equipment to different projects or even consider downsizing your fleet if data suggests redundancy.

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  • Idle Time Identification:Β 

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Excessive idling not only wastes fuel but also contributes to unnecessary engine wear. Utilization reports provide a breakdown of equipment idle time, allowing you to pinpoint areas for improvement. This data can be used to implement operator training programs that promote efficient equipment usage and minimize idling.

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By leveraging these powerful features of construction telematics systems, you gain an unprecedented level of control over your fleet operations. Data-driven decision-making becomes a reality, empowering you to optimize equipment utilization, minimize downtime, reduce fuel costs, and promote productivity.

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Case Study: Lunar Constructions Optimizes Fleet with Telematics

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Lunar Constructions, a regional construction company in the USA, manages a fleet of 30 construction equipment. It includes excavators, loaders, and cranes, etc. Due to their outdated fleet management strategies, they faced operational challenges that hindered their growth.Β 

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These challenges were:

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  • Uninformed asset allocation:Β 

Dispatchers relied on manual methods to track equipment location, leading to delays in assigning the closest machines to new jobs and unnecessary travel time.

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  • Hidden Costs of Idling Equipment:Β 

Without real-time usage data, Lunar company struggled to identify and address excessive idling. It affected fuel efficiency and contributed to unnecessary wear and tear.

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  • Reactive Maintenance:Β 

Reliance on traditional maintenance schedules often resulted in unexpected equipment failures and costly repairs, disrupting project schedules.

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Telematics to the Rescue

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After considering these issues, Lunar Constructions decided to invest in a comprehensive telematics system for their entire construction equipment fleet.Β 

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The system provided real-time data on:

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  • Location Tracking:Β 

Knowing the exact location of each equipment allowed for optimized allocation, minimizing travel time between jobs and maximizing crew productivity.

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  • Equipment Usage:Β 

Engine hours, idle time, and fuel consumption data helped identify underutilized equipment and potential fuel inefficiencies.

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  • Diagnostic Reports:Β 

Engine data and fault codes provided early warnings of potential equipment problems, enabling proactive maintenance and preventing breakdowns.

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Return on Investment (ROI) Analysis

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The telematics system delivered substantial benefits for Lunar Constructions, resulting in a positive ROI within a year of implementation.Β 

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Here's a breakdown of the key factors:

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  • Enhanced Equipment Utilization:Β 

By identifying idle equipment and efficiently assigning them to new jobs, Lunar increased utilization by 18%. This translated to taking on additional projects without needing to rent equipment, generating an estimated annual revenue increase of $750,000.

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  • Reduced Fuel Costs:Β 

Telematics data helped optimize routes and identify idling equipment, leading to a 12% reduction in fuel consumption. With an average annual fuel expense of $400,000, this resulted in annual savings of $48,000.

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  • Proactive Maintenance Advantage:Β 

Early detection of potential equipment issues through engine diagnostics minimized downtime and expensive repairs. Lunar company estimated a 15% reduction in maintenance costs, saving them $60,000 annually.

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Calculating the ROI:

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  • Total Annual Benefits: Increased Revenue ($750,000) + Reduced Fuel Costs ($48,000) + Reduced Maintenance Costs ($60,000) = $858,000

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  • Cost of Telematics System: A telematics system costs the Lunar company $35,000 per year for a fleet of 30 construction equipmentΒ 

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  • ROI: ($858,000 - $18,000) / $35,000 = 23.63%

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Beyond the Numbers

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The telematics system also brought additional benefits for Lunar constructions, that are difficult to quantify:

  • Improved Job site Safety: Real-time location data allowed for better oversight of equipment operation, potentially reducing accidents and injuries.

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  • Reduced Theft Risk: The ability to track equipment location helped deter theft and provided valuable evidence for recovery efforts.

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Conclusion:

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Lunar Constructions' successful implementation of a telematics system demonstrates the significant ROI this technology can offer construction companies. By improving equipment utilization, reducing fuel and maintenance costs, and providing valuable insights for better decision-making, telematics empowers construction companies to operate with greater efficiency and profitability.

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