The Internet of Things Is Changing Heavy Equipment Fleet Management

by Gil Gilbert, CEM; CASS, Fleet Director, Henkels & McCoy Pipeline Division, Fleet Master 2016 Winner for large fleets.

This post originally appeared on the website of the Association of Equipment Management Professionals (AEMP).  

As Fleet Management Professionals, we must know and understand the most current terminology and buzz words. The “Internet of Things” (IoT) is one of those terms, and it’s important if you want to stay competitive. Here is the definition of IoT according to Technopedia;

The Internet of Things (IoT) is a computing concept that describes a future where every day physical objects will be connected to the Internet and be able to identify themselves to other devices. The term is closely identified with RFID as the method of communication, although it also may include other sensor technologies, wireless technologies or QR codes (1).

Most of today’s fleets and equipment organizations have a plethora of this technology currently in place. Equipment manufacturers have been working on and developing this technology for years. These physical devices, sensors, electronics, actuators and software collect embedded data and exchange that data via network connectivity.

Another term that is often used today is “lean construction.” Lean construction is a process or principle of designing production systems to minimize waste of materials, time, and effort in order to generate the maximum possible margins or amount of value (2). The internet of things (IoT) is the best method to accomplish just that. Let me give you a few examples of how Henkels and McCoy has embraced IoT and realized safer operations, highly improved maintenance, better cost controls, and increased profit margins.

Safer Operations, Better Informed Operators

At H&M, we have developed and put into place a QR (Quick Reference) code system (3). Each piece of equipment has QR codes printed on long-lasting decal media and strategically placed at different areas on each machine. These codes can be scanned with any smart device to provide instant access to specific information related to that machine including lifting capacities, daily walk around safety videos, periodic inspection points and checklist, and OEM proper operational videos. If an operator, mechanic, or anyone has a question about any particular machine, the information is now at their fingertips.

Highly Improved Maintenance Key Performance Indicators (KPIs)

With many different types of machine makes and models scattered over a national footprint, it was very difficult to get preventive maintenance (PM) schedules out to the field and completed repair orders back to the fleet department in a timely manner. Purchasing parts was also a problem. Major projects would purchase a large stock of filters and maintenance parts. At the end of the project, the unused parts would be sent back, incurring a restocking fee, or they would be sent back to the maintenance facility, wasting time and freight costs. Working with our OEM’s and their parts support groups, we developed an “on demand PM parts program.” Using the maintenance module of our telematics solution, we can now send our parts provider a “maintenance due” alert. This alert informs our parts provider that a PM is due on a specific machine, the level of the PM and what components will be needed to perform the required maintenance. This alert is generated automatically 40 hours prior to the actual PM trigger. Our parts support team then builds a maintenance kit, inserts the OEM check list, and ships the kit to the machine’s location via the project’s geofence name and address. This alert also informs the master mechanic on the project that there is a machine needing the PM and that the parts have been shipped. Once the PM is completed, the onsite mechanic snaps a picture of the completed PM check list, sends that picture via email or text to the PM coordinator at the main maintenance facility and the PM is recorded immediately. Very soon, via a smart phone or tablet app, the onsite mechanic will be able to submit the PM repair order directly into our maintenance database. This process has taken our completed PM from 60 percent to over 95 percent.

Better Cost Controls

Next to labor, equipment and fuel are the most expensive part of any project. Equipment utilization drives these costs and ultimately can give you the very data needed to make critical decisions such as right-sizing of your fleet and determining when to rent rather than own. In the past, these decisions were made by manual entries or time sheets, and were often based upon unquantifiable opinions and not actual fact-based data. Over the last four years, by utilizing telematics, H&M has used automated utilization data to increase overall fleet usage from an average of 51 percent to 75 percent and climbing.  We have also reduced our owned-equipment count from 1,200 machines to 700 machines, reducing fixed costs and increasing equipment reliability. Our fleet composition has also changed to more industry-specific owned types of machines, such as pipe layers and winched dozers. This has enabled us to reduce our overall mobilization costs by increasing local rentals and flexible OEM short-term leasing programs for basic types of machines. As a result, we realized a 33 percent reduction in our fixed equipment costs from four years ago and an increased profit margin.

Equipment idling equals wasted fuel, and fuel isn’t cheap. With telematic sensors on all our machines, we can show each project’s detailed idle times by each machine, total idle times and how much it is costing each project for wasted fuel. Our project managers now monitor and control excessive idling, again netting higher profit margins.

The Internet of Things and Lean Construction go together like peas and carrots, a marriage made in heaven. For those of you that have not jumped on this high-speed train called technology, you will be seeing nothing but taillights as the world passes right by you!

Also see David Shillingford’s comments about how the IoT will affect fleet insurance rates here.  

Learn more about how technology is impacting fleet management at CONEXPO-CON/AGG. View Sessions.

(1) “Internet of Things (IoT),” Technopedia, Ret. 10/05/2016 from
(2) “Lean Construction,” Constructing Excellence, 2-13-06, Ret. 10/05/2016 from
(3) “What is a QR Code?”, Ret. 10/05/2016 from

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