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By Karen Scally
Ready to take your construction fleet management to the next level?
Then it’s absolutely essential you are using available technology to your advantage.
Today’s fleet managers face incredibly strong headwinds: we were more productive per labor hour 30 years ago in construction than we are today, equipment downtime is costly, and the global supply chain problems are making it more challenging than ever to get equipment back up and running.
At the 2021 Association of Equipment Management Professionals EquipmentSHIFT Conference in Savannah, Georgia, on Oct. 21-22, fleet experts shared their insights on how you can make technology work for your fleet operations — and revealed just how much you’re leaving on the table if you don’t.
Let’s face it: With the average profit margins for contractors at 5.5%, there’s not much wiggle room for equipment managers in today’s world.
“You’ve got to be an innovator,” says Mike Clancy, partner and strategy practice leader at FMI Corporation. “You’ve got to be thinking differently about what we do.”
Here’s why Clancy and other presenters say technology must play a fundamental role in your construction fleet management.
Author’s note: This is just the first article of several that will dig into the content from the EquipmentSHIFT conference. Subscribe to our newsletter to make sure you don’t miss valuable insights.
1. Construction Fleet Management Tech Establishes a Data-Driven Source of Ground Truth
Here’s the harsh reality: Upper-level management doesn’t always get accurate information about what’s really happening in your contractor organization. A lot of anecdotes make it up the chain, but they can be tinged with hyperbole or leave out important facts.
You need to find a source of “ground truth,” Clancy says. This concept comes from the military, says Clancy, who is also an Army veteran, where generals often hear and see a version of truth mixed in with a lot of nonsense.
“And that’s true of your C-suite as well — the stuff that they’re hearing is not necessarily ground truth,” he says.
So how do heavy equipment fleet managers uncover ground truth?
“We get it from our technology and our data — really understanding real-time feedback on the fleet’s operation, condition, where it’s at, what it’s doing, how effectively it’s being used, and how much revenue and profit it’s driving for the business,” Clancy says.
Technology, such as telematics and fleet management software, is designed to serve as that foundational source, because you can’t make good management decisions without good information.
But Clancy says it’s not just about getting the info — it’s about knowing how to analyze it to drive decision making.
“That data is only valuable to the extent that we can process it into knowledge and wisdom,” he says.
He says effective fleet management technology will provide real-time feedback on your fleet’s:
- Efficiency of operation
- Profit contribution
If the technology your organization uses is not allowing you to adequately surface actionable insights about your construction equipment, dump it. It’s not worth the investment. Technology only works if it is a force multiplier, he says.
“A force multiplier is just something that makes each and every individual in the organization a little bit more effective,” Clancy says.
He likens construction to a game of inches, where incremental results go a long way toward reaching the goal.
“A little bit more effective is all you need to do to be wildly successful,” he says. “So if your technology can help you identify the pinch points in your bigger fleet assets getting reallocated, or if you could point out bad behaviors like hoarding and things like that, or if it can forecast what you’re going to need based on historical trends, that’s what you really need it to do. [You need it] to help you find those inches, to help you find those pains, to help you drive the business forward.”
2. Construction Fleet Management Tech Helps You Slash Emergency Maintenance Costs
Do you know how much of your fleet maintenance team’s time is spent on emergency repairs?
Emergency or priority maintenance, meaning equipment issues that must be addressed within 24-48 hours, should account for less than 5% of man hours, says Justin Smith, president and CEO of TBR Strategies.
Smith says to be considered a world-class fleet operation, more than 60% of your maintenance hours should be spent on preventive and predictive maintenance. Few fall into that category.
Unfortunately, most contractor fleet operations still have a “Run to Failure” (RTF) philosophy about when their equipment repairs should occur, he says. But this is extremely costly.
When equipment reaches the point of failure, the costs are four to five times higher than if they were corrected earlier, Smith says. With equipment downtime estimated at $5,000/hour, according to TBR Strategies, that can chip away at any profit potential quickly.
Implementing asset management technology, data analysis, and documented processes can help fleet managers get to a more healthy ratio in the types of maintenance they perform.
Smith says fleet managers can look to the example of New Orleans-based Barriere Construction, a three-time AEMP Fleet Masters Award winner, which has an emergency repair rate of no more than 1-2% of its maintenance man hours.
“They use … a centralized control center for all their telematics and all their technology,” Smith says.
This command center, which they’ve dubbed the Resource Optimization Center (ROC), oversees all of the 150 assets in their $38-million fleet, bringing together GPS tracking, video cameras, and asset management software. It’s monitored by five coordinators to analyze their data in real-time, which allows PMs to be more effectively scheduled based on trends and equipment utilization.
This analysis and reporting of the data is the difference maker, Smith says.
“If you don’t analyze [the data] for improvements, you’re going to keep performing an undesirable event over and over again,” he says.
Ben Tucker, CEM, equipment director for Barriere Construction, estimates that they have saved $26-28 million in maintenance costs, as well as increased their equipment uptime by 150-214% by adopting technology and implementing these processes, Smith reports.
3. Construction Fleet Management Tech Enhances Forecasting for Fleet Needs
Using equipment monitoring software and its data to your fleet’s advantage is just the beginning.
The next step is to layer your production-based data on top of your equipment health data, says Joe Shoen, CESP, connected assets specialist for Western States Equipment.
This will help you get better insights as to whether your operators are not only trained for their tasks, but also if they are getting the performance they should out of any given asset.
Incorporating production-based data can give added perspective about fleet needs as well, Shoen says.
“I’ve worked with a couple sites where production data is actually dictating the fleet itself,” he says. “They’re buying and selling machines based on production. That’s what technology brings is that level set, and you get a little more of a global view on it.”
Shoen advocates for partnering with your dealer to tap into these insights and work together to better manage your fleet. With access to that data, a dealer can forecast for anticipated maintenance and ensure they have the necessary parts in stock, something that’s particularly important during the current supply chain disruptions.
“The just-in-time mentality went out the door,” Shoen says. “It’s going to take quite a while before the supply chain gets back up. The use of technology allows us to get a lot more creative than we could have five years ago.”
4. Construction Fleet Management Tech Builds Better Teams
Fleet technology provides the opportunity to further develop your teams, whether it’s your operators or your maintenance crews.
Take machine guidance for grading, for example, says Pat L’Heureux, project engineer for Severino Trucking. He says that at first, Severino’s operators resisted the new technology and complained that the screens in their cabs were obstructing their views.
But then they saw it provides better grading than what can be done manually, and they didn’t have to worry about stakes getting knocked down or having a project superintendent breathing down their necks.
“They can do their work faster, they can do their work with the information they need, and they also feel like a part of it,” L’Heureux says.
He adds that it allows individual skills to shine in ways they wouldn’t be able to on their own.
“They can get to their work and be artists, because that’s what they are,” L’Heureux says. “They are artistically putting together our infrastructure.”
Fleet management technology also allows crews to spot potential problems faster and offer solutions.
“Technology brings everyone together — it’s communication,” he says. “I think that’s actually absolutely critical. It gets the communication going and gets everyone involved.”
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