Equipment Focus: Mobile Equipment Telematics

September/October 2014

Telematics systems can help recyclers manage their equipment fleets for greater efficiency and productivity and detect maintenance issues before they cause equipment failures.

By Ken McEntee

At 8:58 a.m. on a recent workday, an alert sounded on Mike Grant’s mobile phone. The engine coolant temperature of one of Schnitzer Steel Industries’ material handlers in Oakland, Calif., had risen above normal. The machine’s telematics system automatically sent a notification to Grant, the company’s Southwest regional asset manager, who is based in Oakland and responsible for all of the Portland, Ore.-based company’s equipment in California and Hawaii.

“The fault code told me that the machine was overheating,” Grant says. He sent for the lube truck, which had to blow out the radiator core. “Without telematics alerting me about the problem, the engine could have overheated.”

Time is money when it comes to running a scrapyard. Every minute mobile equipment is down for maintenance, it interrupts production. Even when a company performs routine inspections and maintenance, an unexpected broken part or mechanical failure can result in downtime to make a repair. In the worst cases, an unexpected or unnoticed equipment problem can cause an expensive, catastrophic equipment breakdown. And continually operating equipment outside of its recommended parameters can reduce its life span. Telematics systems can alert operators to equipment problems so they can intervene before an inconvenient or unsafe breakdown occurs. These systems also can track equipment use and maintenance to help equipment managers optimize the machines’ production, performance, and life span, proponents of the technology say.

Telematics is the term heavy-equipment manufacturers use to describe a set of information-recording and -sharing technologies that monitor variables like equipment location, hours of use, required maintenance, speed, and fuel consumption, to name a few. For years, manufacturers have been collecting this information from their engines and other components to help them improve machine performance, but only recently have they made it available to the equipment owner and operator.

The technology consists of two parts: a system that collects data from various sensors on the equipment and a system that communicates that data through cellular or satellite networks in real time to computers or mobile devices connected to the Internet. A monthly subscription gives equipment owners access to the data anywhere in the world. Many manufacturers of scrapyard mobile equipment are offering one- to three-year free trial subscriptions to their telematics services with the purchase of a new, telematics-enabled machine.

One of the most popular features of the technology—its ability to use GPS data to track machines’ location—has made telematics popular in the construction industry since the late 2000s, but that also might be why the scrap industry has been slower to adopt it: Most scrap equipment doesn’t stray outside its yard. Manufacturers are pointing out other ways in which the scrap industry can benefit from telematics, however, most notably for receiving critical alerts, tracking equipment maintenance, and improving efficiency.

Early Warnings

To Tom Hickson, procurement and fleet manager for heavy equipment at PSC Metals (Mayfield Heights, Ohio), the most important telematics feature is the notification system that sends texts or e-mail alerts to appropriate personnel when something goes wrong with a machine. “I like $500 problems better than $50,000 problems,” he says. “When you don’t catch it in time, the $500 problem can become a $50,000 problem. That’s why telematics are so valuable. Problems happen even when you do daily inspections and routine maintenance.”

PSC is just getting started with telematics, but by the end of the year it plans to buy about 30 new machines that use the technology across its more than 40 locations throughout the eastern United States, Hickson says. The scrap recycling company he worked for before he joined PSC last year uses the technology in about 100 of its machines.

Schnitzer’s Grant also values the alerts. Along with numerous nonemergency notifications—such as a machine starting or shutting down—he typically receives between three and 20 fault codes each day on his mobile phone from 25 telematics-enabled machines, he says. “Earlier today I was alerted that the torque converter on a machine at our Hawaii operation got too hot, and just now I was alerted that a cooling solenoid on a machine at our Fresno yard isn’t working,” he says, giving two immediate examples.

Grant started installing or activating telematics on Schnitzer’s wheel loaders, material handlers, and other machinery as soon as he joined the company in 2010. He had used the technology since 2004, when he worked as a regional manager for a national waste company. “I can’t live without it,” he says. “I don’t know how somebody with millions of dollars in assets could not have telematics on their machines.” The alerts save the company money on downtime, catastrophic failures, and damage to hydraulic pumps and engines. “Like anything else, however, you have to understand how to use it,” Grant says. “You have to know which alerts you want to set up and what you want to monitor.”

Monitoring Maintenance and Use

Telematics are valuable for routine maintenance and monitoring as well. “The operation’s fleet manager will have, in a centralized location, all of the information he or she needs to schedule maintenance and monitor equipment operating parameters to make sure the machine is running properly,” explains a solutions marketing manager for a Midwestern equipment manufacturer. “This helps replace the old paper records and whiteboards that relied on input from individual operators,” he adds.

Another Midwestern manufacturer says it can collect more than 100 different data points on its telematics system, and mechanical data are among the most important, says the company’s telematics strategy manager. “It tells you about parts you recently replaced, when the machine was serviced, and what its current oil temperature is,” he explains. “It’s all about where you install sensors on the machine and what you decide that you want to track. What we do is embed software into a wireless device that is connected to the machine’s CAN bus to pull the engine’s diagnostic data to present things like fuel level, warning codes, and oil temperature.”

Many companies are reactive when dealing with equipment maintenance and repairs, says a scrap handler product manager for a European-based company with offices on the East Coast. With telematics, “they can be alerted to a problem” before it results in equipment damage “and take care of it more efficiently.” As the solutions marketing manager puts it, “by monitoring the current hours and activity of a machine, they can more proactively schedule maintenance for times where it has the least amount of impact on production in the yard.”

“Keeping the machine running is a primary goal, so if you can identify something coming up and prepare for it, that is huge,” the telematics strategy manager says. “Downtime costs dollars.”

Hickson says real-time monitoring and reporting of data points like fuel consumption and idle time are among the most valuable features. “Fuel monitoring is a nice tool for long-term savings and observation. It allows you to compare machines based on fuel efficiency,” he says. The web interface also allows personnel at multiple locations to discuss maintenance issues together, which he says has been a great benefit.

The data are useful indicators of work habits, too. “There is also a great deal of information you can learn from and coach operators on,” the solutions marketing manager says. “For instance, if you notice a wheel loader has an excessive amount of idling time, this allows you to coach the operator on ways to reduce engine idling, which reduces fuel use and reduces unnecessary wear and tear on the engine.” The idling data saves Schnitzer money on fuel, Grant says, and it can be an indicator of other issues. “If you have a machine that is idle a lot, or being turned on and off a lot during the day, maybe that’s a machine that you can take out of service. We call that ‘right-sizing the fleet,’” he says, about using telematics to determine whether you have too many machines assigned to a given task or yard.

Further, “in California, for example, where air emissions regulations are big, monitoring idle time is huge,” says Stan Orr, president of the Association of Equipment Management Professionals (Glenwood Springs, Colo.). “Depending on the state, as little as a few minutes of idle time can bring a fine of $5,000. Telematics allows you to accurately monitor and generate reports for variables like idle time. These are the kinds of things you have had to do by guessing until now.”

And although GPS features might not sway scrap companies to use telematics, geofencing, a GPS-based telematics application, can help keep machines secure. The technology limits machines to operating within a defined geographic area and thus can protect small equipment like skid-steer loaders from theft and unauthorized use. But telematics is not just an anti-theft tool, Orr says. “It also can tell within the parameters of the scrapyard whether a vehicle is being properly used, like if an engine is being over-revved or if a driver is not coming to a complete stop when changing gears, which could cause mechanical problems.”

“The bottom line is that telematics saves time and money—it’s all about productivity and operator efficiency,” the telematics strategy manager says. “When you make the machine smarter, then you can use a less-experienced operator to run the machine, and it makes the operator smarter.”

Communication Limitations

“One of the greatest flaws of telematics is that the systems from the various [equipment] manufacturers do not talk to each other,” Grant says. As AEMP’s Orr explains, “most end users have equipment from several different manufacturers in their fleets, so they had to go to each company’s website to get data. It was inefficient, and it could be inaccurate because the data, as reported by the different manufacturers, wasn’t necessarily done the same way.” The only way to pull telematics data from multiple manufacturers’ machines into a single system was to purchase a software subscription from a third-party vendor, he says.

That’s changing, however. In February, AEMP and the Association of Equipment Manufacturers (Milwaukee) issued a joint press release announcing that they, along with a contingent of heavy-equipment manufacturers, have developed a common set of data points and a data-sharing standard that will allow users to collect and analyze information from multiple manufacturers’ equipment on a single platform. The participating manufacturers will now send 19 data points—variables like machine location, engine coolant temperature, hours in operation, oil pressure, and idle time—and 42 fault codes to equipment users in a common format, and users will be able to view data from different manufacturers’ machines on a single screen, Orr says. A draft of the new standard should be out in early September.

An earlier version of the standard, developed in 2008, only had six common data points, but an AEMP member survey showed users wanted more.

The specific data points measured can still vary from one type of machine to another, Orr says. “Maybe on the skid-steer, the manufacturer will provide five or six data points, whereas maybe a material handler may have all 19 data points included in the [AEMP] standard. The market will drive it.” The nature and number of items a manufacturer tracks for a specific piece of equipment might become a selling point, he adds. “If [buyers] are comparing two excavators, it could come to the point where they may pick one over the other because of the data they are able to get off the equipment.”

Some equipment users have another communications concern: They worry that telematics systems could inadvertently reveal proprietary data about
their operations to a competitor. The discussion centers on whether the manufacturer or the end user owns the data that is pulled off the machines. “Through recent developments, manufacturers now generally agree that the end user owns the data,” Orr says.

Scrapyard Skeptics

Despite the potential benefits, not all recyclers are sold on telematics technology. “Anybody who has been to the ReMA convention in the last couple years has seen telematics presented by the more forward-thinking equipment companies, so I think it’s going to become more prevalent in our industry as time goes on,” says Steve Iverson, vice president of operations for SA Recycling (Orange, Calif.). “But we just haven’t found a need for it at this point. … We don’t see where it can save us money. We have a very good preventive maintenance program in place using software that notifies us when it’s time to perform certain procedures. We thoroughly inspect our equipment daily and act upon any equipment deficiencies that are noted on the reports. If something happens by chance and through telematics somebody could be notified quickly enough to where it would reduce downtime, we might be able to realize a cost savings, but I don’t see it as a viable option with the costs that are involved in subscribing to the services. I see this as more of a value-added feature.”

Likewise, Al Tomes, director of operations for PADNOS (Holland, Mich.), isn’t convinced about the value of telematics. “We own some equipment that is telematics-capable, but we haven’t purchased the data contracts because of the cost,” he says. “We decided that our people communicate pretty well. If the operator sees that the oil temperature is going up, he contacts the maintenance department. We do pre- and post-usage checks on all of our equipment. Telematics can be helpful, but you have to weigh the price against the benefit, and from that standpoint we don’t see the value.”

Calbag Metals (Portland, Ore.) also doesn’t use telematics. The technology will have to prove itself before it becomes widespread, says Dave Meyer, the company’s Tacoma, Wash.-based operations manager. “Scrappers aren’t going to just buy something new on the market,” he says. “We have to be able to see where it is going to save us money.”

Orr says he understands this perspective. “It’s difficult for a fleet manager to go to the owner of the company and say, ‘I want to invest money in telematics, and I think we will get a good ROI.’ You can’t think; you have to know. So I think major manufacturers are going to be including telematics data and subscriptions to the data as part of the purchase price [of the equipment]. Then the users will be able to see the savings for themselves.” Indeed, several manufacturers of scrapyard mobile equipment are offering free trial subscriptions for one to three years with the purchase of new equipment or an equipment service contract, but charging for the information is likely to be the norm in the long term, they say. Quoted prices vary from $25 to $200 a month for each machine—though Hickson says he has never paid a dime for a subscription. “The manufacturers offer free trial periods, but when those expire, they keep them going,” he says. He suspects that once manufacturers establish it “as a tool that you can’t do without, they figure you’ll be willing to pay the price.”

Scrap recyclers should look less at the cost of telematics and more at the cost savings they can provide, says the material handler product manager for a Gulf Coast manufacturer. “When you think about it, what is the cost of a down machine?” he asks. “Especially in the scrap industry, when the price [of scrap] is up, and you want to try to process as much material as possible.”