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By Karen M. Scally
If you’re not already tapping into what your construction fleet management data is telling you, you are already behind.
That’s what Jason Threewitts, Digital Services Manager for Carter Machinery, a Caterpillar dealer located in Salem, Virginia, wants you to know.
The pandemic has accelerated almost every aspect of digital adaptation for businesses in order to survive, but perhaps when history provides its hindsight view, one of the industries that it will have affected most dramatically is construction.
The adoption of telematics solutions for construction had been trailing those designed for on-highway fleets by about a decade, but now during the pandemic, Threewitts says never has the need for contractors to depend on connected fleet data been more acutely necessary, at a time when access and visibility to fleets and jobsites have been limited.
“It’s very relevant, especially now when you think, how are you going to get hours off of that machine, but you’re not allowed to go to that machine,” Threewitts says. “And your depreciation on the books doesn’t stop because of COVID-19. It’s still real.”
Since the data can provide a window to remotely see exactly what’s happening, more contractors are relying on construction equipment telematics than ever before.
“Customers are realizing, especially within the last six months, that being able to be at the site without being at the site has all new meaning here,” he says.
[Click to Tweet]: On the rise of telematics solutions for construction: “Customers are realizing, especially within the last six months, that being able to be at the site without being at the site has all new meaning here.” —Jason Threewitts of Carter Machinery
It’s creating an immediate, growing need for contractors to better understand exactly what to do with that data.
Threewitts, whose experience combines his background in IT with previous roles in the warranty department and managing the fluid analysis lab at Carter Machinery helps contractors become more proactive with applying the stories that their equipment data shares.
“For the last five to six years, I’ve been dedicated to this idea of connectivity and telematics, and ultimately, how to help customers navigate through this weird, wild, wonderful world of data,” Threewitts says.
His team is responsible for the management of “customer value agreements” designed to extend care and service to its connected heavy equipment, including preventive maintenance, fleet monitoring, and undercarriage coverage, while providing a fixed cost over the lifetime of a machine. Threewitts and his team relay information from its heavy equipment monitoring systems internally to product support reps, who work directly with customers on product support issues and opportunities, or in some cases externally to customers, serving as a proxy to their construction equipment asset management workflows.
Recently, Carter Machinery and Alban Tractor became one dealership, which expanded Carter’s legacy territory to cover Delaware, Maryland, Virginia, and the panhandle and southern regions of West Virginia, and its diverse customers range from large mining companies to small landscapers.
Ready for Change
Even before the pandemic and its business upheaval, Threewitts says the construction industry was on the cusp of a significant transition in embracing the benefits of a digitally connected fleet.
“We’re seeing a pretty big evolutionary change here,” he says.
Five years ago, he says the landscape of fleet connectivity looked very different.
“The heavy equipment industry as a whole, I would say, probably finds itself maybe 10 years behind on-highway trucks,” Threewitts says.
He attributes that partially due to the early standardization of telematics for on-highway fleets.
“That’s not the case with the heavy equipment,” Threewitts says. “Most of that stuff is very proprietary based on manufacturer and what they make available. Now the Association of Equipment Management Professionals has done a very good job of establishing some standards … but we still find ourselves in a situation where not all that data is made available in that public network. Caterpillar was one of the first to come to the table to make as much of that data available as possible.”
Despite that challenge, the adoption rate of telematics in construction is rising.
“We have seen a massive swell of connectivity,” he says. “Some of it is organic, because if you buy a new machine, it’s connected. Most of your OEMs, Caterpillar included, have basically made being connected a factory default.”
In addition, many construction companies are getting ready to hand over the reins to the next generation, which expects operations to function digitally.
We have seen a massive swell of connectivity.– Jason Threewitts of Carter Machinery
“We hover in the 60-70% range of yellow iron in our territory, I’m talking only Caterpillar here, that’s connected,” Threewitts says. “That still leaves a good chunk out there that’s not connected, but most of those are probably older assets.”
However, he says customer value agreements, productivity services, and condition-based monitoring are helping to drive retrofitting or aftermarket connectivity for construction equipment fleets.
The Rising Value of Telematics in Construction
As the scales tip in favor of connected fleets, Threewitts says contractors, with both large and small fleets, are increasingly wanting to understand the value of the data beyond tracking hours and location for their heavy equipment.
“Everyone’s probably going to realize value in a different way,” Threewitts says. “It’s really a learning curve on how to apply some of this stuff.”
Because Carter Machinery covers a territory with diverse customers — including miners with 50 machines in their fleet running coal with 200- to 250-ton haul trucks and huge wheel loaders in West Virginia all the way down to the landscapers with just a skid steer and a small excavator — it would be natural to think their needs would be varied as well. But Threewitts says that would be wrong.
“I would challenge that and say they both have the same problems — the size and scope of the problems changes,” he says. “We do have some customers that are absolutely leveraging this idea of being proactive. It’s not [necessarily] the customer that’s got 50 machines that has it all figured out. Some of our most advanced customers have five.”
He guides contractors into making more proactive decisions by helping them understand how their construction equipment telematics data can assist with tracking and trending load monitoring and preventive maintenance (PM) to achieve significant cost savings.
“I always like to ask customers questions like, ‘How often do you get your PMs done on time?’” Threewitts says. “They’ll quickly say, ‘Well, Jason, I thought we were talking about connectivity.’ And I’m like ‘I am talking about connectivity.’ The amount of time and variables and errors that could potentially be in that is high.”
He recognizes that identifying a fleet’s needs, including order parts, and the appropriate solutions in advance to avoid unexpected and expensive downtime is a complete paradigm shift from how most contractors have historically operated.
“Our industry’s been really good at being reactive and Rescue 911 forever,” Threewitts says. “And that’s changing.”
Learning to Trust the Data
And yet some hurdles remain. Threewitts says one of the most surprising hindrances to helping contractors become more proactive with their connected fleet is the distrust of the data.
“We still have some folks out there that say, ‘If I didn’t see it, I don’t believe it,’” he says.
It can be quite shocking for contractors who have never measured idle time on any of their machines to start capturing it all and then see the first report.
“They go, ‘You mean my machine is idle 52% of the time? No way,’” he says. “But if you’re not measuring it, you’re not managing it.”
After years of depending on employee time cards to allocate fleet expenses, which can notoriously inflate costs on bids, or manually pulling hours off a machine, it can be a bit overwhelming to get a revealing picture of what’s actually happening. But that’s what data does — it strips the human variables from fleet management.
“Data doesn’t have a bad day,” Threewitts says. “Data doesn’t need coffee. Data doesn’t take lunch breaks. It is what it is.”
Letting the Data Drive Your Decisions
Though it may be initially uncomfortable to be confronted with the data’s insights, he says most equipment managers quickly understand it’s an asset that can be invaluable.
“You get that pulse check every hour of every day,” Threewitts says. “What am I doing, how am I doing it, where am I falling short? Do I need to make a different decision? And you’re getting reality … you’re getting it all — the good, bad, the ugly.”
But how contractors respond to the data they receive can vary.
“Now, you can take that [data] one of two ways, and I’ve seen both,” Threewitts says. “You can take it and go use it as a hammer and start yelling and screaming and throwing things at people. That never works. Or you can take it and learn.”
Many of those that decide to learn from it are starting to use their connected fleet data to drive operator training. For example, by monitoring how an operator loads trucks, the data could reveal the machine should be functioning more efficiently.
“Maybe I need to give [the operator] some training on how to stage trucks and how to set up so he’s not swinging from one side of the machine to the other to load a bucket,” Threewitts says.
The data also opens the doors to provide better solutions and develop closer relationships between client and service provider, he says.
“What we’re doing is we’re consulting with them and helping them leverage what all this data is telling us,” Threewitts says. “I don’t really feel like I’m selling them anything. It’s not a cold call, where I go in and say, hey, let me sell you some undercarriage. No, it’s hey, I’m here because the data told me to be here, and we need to talk about this because you guys have some things that are going to happen whether you like it or not. And let’s come up with some options.”
Construction fleet management data is the tool that allows contractors to navigate their way to better decisions. Threewitts says helping to facilitate that is quite rewarding.
“When the light bulb goes off for the customer … that still gets exciting for me,” he says. “When you see that owner go, ‘Wow, I can really use this.’ Yes, you can.”
Relying on Tech-Savvy Partners
As contractor decisions become more data-driven, the importance of IT expertise, whether provided in-house or through a partner, is growing. This is true for dealers and rental companies as well.
“We’re not a technology company; we’re a heavy equipment dealer,” Threewitts says. “We’ve had to develop some new skills, and customers are having to develop some new skills.”
For contractors that have existing internal resources, Threewitts encourages them to get their IT departments involved in their equipment fleet management from the beginning.
“There’s always some misconception where customers think that they’ve got to [personally] be some IT specialist to leverage any of this data or they’ve got to be some Microsoft Excel wizard to make this stuff work for them,” he says. “That’s just not true.”
Dealers, such as Carter Machinery, and other service providers are available to help.
“This is what we’ve been put in place to do, which is to help customers inflict change on their operation,” Threewitts says. “This is the thing you have to consider when you start thinking about connecting to your assets this way, you’re engaging in digital transformation.”
More contractors are understanding the need for IT experts to support their organizations, and some are taking that knowledge to the next level, Threewitts says.
“What’s interesting is we’re getting into API feed conversations more readily,” he says.
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Finding the Power of Condition-Based Monitoring
Major component budgeting plays a significant role in every heavy equipment contractor’s operation and yet, it’s something that nearly every customer struggles with. Up until the shift to connected fleets and digital services started taking off, contractors based parts repairs and replacement solely on machine hours or equipment failures.
“We do our engines at every 15,000 hours … or run it until the thing quits, and then we’ll fix it,” Threewitts says. “I think we’re really at a turning point with some of that. That conversation is changing now.”
The data from the connected fleet now creates the opportunity for enhanced condition-based monitoring.
“So the idea is I’m making decisions off of the condition, or in this case, the condition is driven by the data,” Threewitts says.
In the past, condition-based monitoring, such as fluid analysis, had its limits.
“You’ve got a critical oil sample that tells you your iron reading in your engine is through the roof,” Threewitts says. “What are you going to do? All right, it’s reactive time. I’m going to order parts.”
But now contractors can marry up that sample with monitoring machine trends to become more proactive and develop a plan to repair or replace parts before an emergency occurs.
“It allows us to make a recommendation to the customer that you might want to think about doing X, Y, and Z, because the data is telling us that you’re heading for the wall,” Threewitts says. “Let’s fix it now … before it starts chucking parts out of the side of the engine and then it’s a catastrophic failure.”
Preparing to Embrace Proactive Solutions
The key to achieving success with a connected fleet is for contractors to first have the right mindset, Threewitts says.
“You have to really take a hard look at your culture as a company,” he says. “Are you ready for the change that’s going to present itself because of all the opportunities in the world that this data is going to show?”
Contractors must have a culture that desires for its business to improve.
“You need to give a strong look at how you enable everyone from the water truck driver all the way out to the guy or gal who’s changing the bucket teeth on your excavator,” Threewitts says. “Are they empowered for change? If they’re not, then you need to give a serious consideration on why you would want to connect to this and create more data if you’re not going to do anything with it.”
If a contractor doesn’t have an open-minded, empowered team, Threewitts says the data is useless.
“It is absolutely where data goes to die,” he says. “Data without a process or a purpose is just dead on arrival.”
[Click to Tweet]: “Data without a process or a purpose is just dead on arrival.” — Jason Threewitts, Carter Machinery digital services manager
Even if the culture is designed to promote change, contractors should also prepare for some inevitable pushback, Threewitts says.
“You’ve got to understand there’s going to be people in your organization that are not happy about it,” he says. “They’re going to be threatened by it. They’re going to think that it’s replacing them. So you’ve got to figure out how to navigate that.”
Reaping Strong ROI
All of this can sound expensive to many contractors, Threewitts recognizes.
“But you break it down for them in cost per hour and start relating it to that major failure you could have caught if somebody was looking at stuff or that PM that you completely whiffed on because you didn’t even know it was due,” he says. “Or how much does someone in the office spend of their day just transcribing numbers into a system? What if you can make that go away? Or what if you could take that highly valuable asset to the company and let he or she do something else productive in the company? What value does that bring?”
He says contractors can quickly see the $600 worth of telematics hardware they’re putting on the machine result in a ROI that’s tenfold.
“It’s almost counterintuitive to being a heavy equipment dealer,” Threewitts says.
It’s naturally advantageous for construction equipment dealers, distributors, and rental companies when contractors don’t manage their fleets as efficiently, because they then need more parts and service.
“But we want to try to enable our customers to achieve their highest levels of success,” Threewitts says. “If you’re making money, we’re making money. We want you to be in business 50 years from now.”
He believes the construction industry is just beginning to realize the benefits of connected fleet integration and that the proactive use of its data will continue to rapidly accelerate.
“It’s an exciting time for sure,” Threewitts says. “I’ve got a lot of great colleagues spread out across a lot of different dealers across North America that I converse with on a regular basis, and we’re all saying the same thing. I would say the next two to five years are going to be pretty rapid, pretty fun, and pretty exciting.”
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