GPS-based asset tracking has been heralded as one of the most powerful theft deterrent and recovery technologies available for the construction industry. While theft protection is the most visible and understood benefit of the technology, it only scratches the surface of what global positioning systems can do. For the rental owner who says, “I don't have a theft problem, so I don't need GPS,” this technology offers plenty of other benefits to positively impact his or her company's bottom line. GPS technology can increase revenue gains, reduce maintenance costs, and enhance customer service, in addition to the anti-theft benefits it provides.

How it works

Equipment asset tracking — generally referred to as GPS — involves three basic parts:

  1. A transponder unit mounted on the asset to collect data.
  2. A communication medium transmits the data.
  3. A user interface where the manager views the data, usually an Internet software package.

The transponder unit is typically about the size of a large ashtray and houses the GPS receiver and wireless radio. Wireless networks, the same used by mobile phones, provide communication between the transponder on the machine and the manager at the computer. The unit literally “calls” information such as location, on/off status, usage data, and critical updates pertaining to machine health and unauthorized use directly from the asset to the software, cell phones, PDAs and e-mail in real time. Additionally, the manager may “call” the unit from the software and request an update of this data or other functions such as remote disabling of the asset. This can be done at any time with a click of the mouse. It is almost as if the machine has its own cell phone from which it can call the rental center owner, and vice versa.

Stay in touch

The first major benefit to rental operations is the increase in revenue, which is found by gaining a greater understanding of exactly what a rental machine does and where it goes after it leaves the yard. In addition to providing location data, an asset-tracking system typically captures the total run time as well as the clocked hours of operation. For example, a tracking unit may report remotely that a rented backhoe was used from 7 a.m. to 12:30 p.m. and 1:00 p.m. to 6:00 p.m. for a total of 10.5 hours that day. Armed with this data some rental centers have quickly found that their customers have made an art out of intentionally extracting extra, non-paid usage from their machines. One technique involves calling the equipment off rent and continuing to use it before the machine is picked up or returned. With an asset-tracking system, all the run-time hours and locations beyond the contract are easily identified and that lost revenue recaptured. The same goes for rain day or holiday credits, as they now can be remotely verified as non-use days before issuing the credit.

Some rental owners have even found that their customers go so far as to disconnect or tamper with the machine's hour meter. Most global positioning systems have their own internal hour meter so even if the machine's meter is compromised, all usage data will still be captured. This is not to say that renters are necessarily dishonest, but that the rental operation's exposure to deception will decrease significantly while billable hours will increase as a result of automated data collection.

Another powerful advantage of GPS lies in the ability for some systems to remotely disable and re-enable a machine from starting. This is particularly useful to motivate non-paying customers and renters who disappear altogether with a piece of equipment.

A second major benefit rental owners experience is a decrease in service costs and extension in the productive life of the machine. It goes without saying that an automated hour meter collection system will reduce the time and errors associated with manually collecting those readings and inputting them into electronic format. Many GPS offerings will also track preventive maintenance schedules and provide an automated “service due” notification based on those remotely collected hours. Others provide an upcoming schedule of service based on these readings, sometimes color-coding a machine in the software depending on how far out from the next maintenance it is. As a proactive scheduling tool and a notification of past due, an asset-tracking system ensures that no machine falls through the cracks or gets serviced too often — both of which cost the rental owner. This is particularly important for longer term and out-of-state rentals, when the machine is out of reach of the rental company.

Additionally, with GPS a driver or dispatcher can pinpoint an asset's exact location on a job for pickup or service, thus reducing wasted time spent searching for the piece.

Some asset-tracking systems also monitor machine health and send a proactive, wireless alarm as an e-mail or cell phone text message if a condition on the equipment becomes threatening. These are usually inputs on the unit wired to existing or aftermarket sensors installed on the machine. An example would be a service manager at a rental company receiving an air filter restriction alarm on a rental at the same time the alarm light goes on in the operator's cab. The manager can then contact the renter to prevent the machine from failing and incurring unnecessary repair costs and downtime.

The final benefit that rental owners will realize with GPS tracking is an enhanced customer service offering. Using the same usage data as mentioned previously, a rental company could contact a renter proactively if they see the latter on pace to exceed the allotted hours on the contract. Additionally, GPS data may indicate that a rental is being used at unauthorized times, outside of the jobsite hours or on a different site altogether. Arming the customer with this information keeps the side jobs and unexpected hours from accumulating on the machine. In all these instances, proactive communication with the customer prevents a dispute from arising at the end of the rental. Some GPS tracking systems will even send notification if a rental is removed from its jobsite, which may indicate a contract violation, unauthorized use or theft.

Improving service management with asset tracking not only reduces repair and maintenance costs, but also improves the uptime on equipment when on rent. Consistently delivering a more reliable, productive rental machine will set any rental company apart from the competition.

So even though theft protection gets the press coverage as the ultimate benefit, GPS tracking also improves the bottom line because it decreases service costs while increasing revenue. Just as importantly, rental companies can capture these profit gains without having to raise rental rates, which keeps the company competitive and its customers loyal.

Tony Nicoletti is the national sales manager for DPL America, a provider of GPS-based asset-tracking solutions for the construction industry specializing in remote monitoring solutions for mobile assets in the rental market, both on and off road. Nicoletti can be reached at tonyn@dplamerica.com.