Once a big-guy solution for the long-haul trucking industry, metro fleet management has become a viable investment for small contractors, thanks to advances in GPS technology.
It should have been easy. Smash the window, hot-wire the engine, and drive off. As an experienced car jacker, he'd done it several times before. But what the man with the tire iron wasn't expecting, what he hadn't anticipated, was that the truck he was trying to steal from an unwitting Imperial Electric electrician on a routine service call was being watched by a satellite located more than 6,000 miles above.
Like the first stage of a project for world domination masterminded by a villain out of a James Bond movie, global positioning system (GPS) technology uses an array of almost 30 satellites that orbit the Earth to pinpoint the location of any vehicle or electronic device on the ground — including service trucks — equipped with a special receiver. Instead of becoming a tool for evil, though, GPS has been incorporated into a host of fleet management systems that not only help track down stray service trucks but can also help supervisors make sure their employees are making good use of their time.
Needless to say, the villain of our story didn't stand a chance. When the technician left the routine electrical service call, he walked outside to discover that his truck had disappeared. But instead of panicking, he calmly called his office to report the stolen vehicle. Sherry Ramsey, who is in charge of accounting and various other office duties at the 130-employee electrical contracting firm located in the Dallas suburb of Bulch Springs, Texas, immediately logged onto her Teletrac fleet management system, located the vehicle online, and watched it drive down the road right on her computer screen. After notifying a supervisor who was already in the area via two-way radio, she got the police on the phone. Just as the perpetrator pulled into an apartment complex, got out of the vehicle, and started to unhook the company's ladder, the supervisor and police pulled up behind him.
There's little doubt the thief was shocked to have been tracked down so easily. Unbeknownst to him, a GPS unit installed underneath the dash — a homing beacon of sorts — had transmitted signals to one of those satellites, communicating his exact whereabouts to the fleet management software running off of a dedicated PC on Ramsey's desk.
Not long ago, GPS technology was considered a big-guy solution exclusively sold to owners of long-haul trucking lines. But as the technology has improved and prices have come down, fleet and asset management tracking has become a legitimate business investment for a whole new niche of smaller customers, including electrical contractors who run service vehicles.
Putting GPS on the map.
Originally founded as Highway Master in 1992, a company now known as Minorplanet Systems USA, headquartered in Richardson, Texas, made its mark on the long-haul trucking business (500 miles or more) in 1994 when it began selling its flagship GPS fleet tracking and communication product. It didn't take long for upper management to realize there was a huge untapped market of smaller companies that run an average of 10 to 15 service vehicles. The company partnered with UK-based Minorplanet, a company that had already installed a similar metropolitan fleet management product in more than 100,000 vehicles in Europe, and started marketing its Vehicle Management Information (VMI) product in the United States in the last quarter of 2001.
Michael Smith, executive vice president at Minorplanet, estimates that only 5% of the 21 million private service vehicles in the United State use some type of fleet management solution. “It's an emerging technology,” Smith says. “It reminds me of when cellular started. It has that same feel to it.”
Metropolitan fleet management doesn't really differ from its long-haul trucking counterpart. Although many vendors offer turnkey software and hardware products as well as customized features and various levels of data reporting sophistication, the concept is basically the same. It's just on a smaller scale and less expensive.
Here's how it works. You find a vendor and product that meets your business needs. You schedule an installation. The vendor comes to your site and installs the GPS devices in your vehicles, typically under the dash. Minorplanet will provide a computer, which will serve as the “command center,” along with the software. Once installed and activated, the units acquire a GPS location from a satellite and store the information. Then, in the case of Minorplanet's VMI, the dispatcher or office administrator can opt to track vehicles in real-time, or set the system to download location data every minute, 5 min, 15 min, hour, and so on. Smith says most customers download the information once a day, and then run reports off of that database.
Like most new technologies, GPS hasn't really taken off in the electrical construction and maintenance industry yet. Whether or not it will penetrate the market will inevitably depend on the experiences of early adopters.
Imperial Electric started using the Teletrac fleet management system about four years ago. Although it originally leased the product, the company recently purchased the software and hardware. Now they only buy airtime. As the administrator of the system, Ramsey tracks 52 vehicles daily in addition to her accounting and office responsibilities. She says the system not only cuts down on “questionable work practices,” such as taking company vehicles out for personal use or weekend entertainment, but it also helps her determine who is speeding, going off route, visiting barred locations, or idling excessively. Although Ramsey admits not all of Imperial's employees were sold on the system at first, most like it now because it allows them to communicate more effectively with the home office, letting her know when they have a flat tire, are stuck in traffic, or need to spend more time on a job than expected. Some of the trucks even have a message display terminal (MDT) screen, which allows technicians to send Ramsey instant text messages from a keypad.
“I have the system set to where it logs in every 15 min and tells me where everybody's at,” Ramsey says. She prints out a weekly report for the company's president, Jeff Hatch. “That way, I can tell if they're somewhere they're not supposed to be,” she says.
Ramsey estimates she catches about five hours a week in time discrepancies. If the average electrician is paid $20 an hour, that adds up to $100, and it can be as much as $150 if that person is being paid overtime.
As for return-on-investment, the system more than paid for itself in Imperial Electric's case after it recovered that stolen vehicle.
Mark Lynn, president of Lighting Technologies, Inc., a small commercial lighting contractor in Atlanta, invested in Minorplanet System USA's VMI system in June 2002 after dealing with some questionable employee practices. Prior to that, Lynn tracked their productivity by paperwork, which he suspects was sometimes fudged. Now, at the end of each week, Lynn's office manager spits out a report that tells him who's been speeding, how much time workers are taking in between jobs, and a history of each vehicle's routes.
“The fact that I can tell how fast they're driving down the road with the truck is a great feature for me,” Lynn says. “The system also tells me when the vehicle is on and off. It makes those morning trips to the convenience store get real short.”
The system can also help employees when it comes to liability issues and speeding, Lynn says. “If he gets a speeding ticket, and this satellite system says he wasn't speeding, then that ticket just goes away,” Lynn says. On the other hand, it can also bust them, even when Johnny Law isn't watching. “If somebody's speeding in my truck, I take them up here, rake 'em over the coals, and say ‘Look fellas, you were going 64 in a 45, what are you doing?’”
Lynn estimates the system saves him 30 min per truck per day on average. And because service is such a big part of his business, he believes it promotes honesty. “I've had people call me on the radio and say ‘Hey, I left my lighter on the last job. I'm going to go back and get it during my lunch break.’ Before, you knew in your heart they were just going back, getting it, and blending it into their time some place — not to mention the times they didn't stop at a pawn shop or Wal-Mart,” he says. “Now we at least have something to go on whereas before we were just guessing.”
Making the investment.
Many vendors offer the product as a lease option. Tim Van Cleave, vice president of sales and marketing, Teletrac, Garden Grove, Calif., says this type of fleet management is much more affordable than most people think. “You're looking at about $75 a month per truck on a 36-month lease,” he says. “When we sit down and talk to [our customers] about their business and how much they're losing in productivity, the numbers surprise them. And the perception is it's only for the big boys. That's clearly not the situation.”
A contributing factor to the cost savings is billable time. When you consider the hourly wage of most electricians and technicians, they make good money, Van Cleave says. “So if they work a hundred hours of labor, but they're only getting 75 hours billable time, it's like they're working at a 75% efficiency rating,” he says. He predicts that the increased accountability the system provides could raise productivity by as much as 20%.
Minorplanet's VMI system doesn't have any upfront costs because it's sold as a lease model. After considering hardware, software, and airtime, the system costs about $4.50 a day per vehicle.
Instead of selling the hardware and software and then billing customers for data usage (airtime) at a markup, Minorplanet is moving to an agent model. “Our salespeople will sell the hardware, software, and leasing arrangement,” Smith says. “Then we will act as an agent on behalf of wireless providers and sign them up.”
Sure, all electrical contractors want to maximize workforce productivity, add more jobs per day, manage their business better, and make more money. But is what could be considered a Big Brother solution the right price to pay for efficiency? Van Cleave, who's been selling his product for nine years, says the Big Brother fear is a typical initial response from prospective clients. However, he maintains these fears are unwarranted. “I've never had an owner call me and complain,” he says. “What I have seen is the drivers actually like it because they know everybody's doing what they're supposed to. Now they're not put into the position of going in to tell the owner, ‘Hey, this guy's not pulling his weight.’”
Smith says he likes to ask owners who are concerned about issues of employee privacy if they ever get up, walk around, and see what the employees in their office are doing. “Of course I do,” they say. Smith's standard response is: “So it's not OK to know what these technicians, who are going out in the field with your most expensive assets, are doing? They're the lifeblood of your company.”
For customers who fear their employees will grouse about the “somebody's always watching me” aspect of the system, Smith turns the tables by offering a simple suggestion. Owners can reduce skepticism and paranoia by instituting a clearly defined incentive program based on the historical data downloaded from the fleet management reporting system. “All the owner has to do is say, ‘We don't want you going on unscheduled stops or to barred locations, and we don't want you speeding,’” he says. “‘If you play by the rules, we'll provide bonuses as an incentive for the most productive workers.’”
Privacy concerns aside, GPS-based fleet management systems are proving to be more helpful than invasive among their users. And with a virtually untapped service market in the construction industry, the real question will be whether GPS products take off as quickly in the metro fleet management sector as they did in the long-haul trucking industry.