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IndustrypracticesinmeteringandmonitoringAnitaSalemAnnGallensonKathrynAten

Fall 15

08Fall

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IndustryPracticesinMeteringandMonitoring

TheobjectiveofthisstudywastoprovideinformationandunderstandingtoassisttheMarineCorpsinimplementingmeteringandinformationsystemstosupporteffectiveuseofvehiclefuel.Aresearchproject,includingthestudydescribedhere,andalsoathesisandMBAproject(seeHenton&Noack,2015;Robinson,2015)examinedhowindustryorganizationsimplementedvehicletelematicssystems,withaparticularfocusonhowtheorganizationsalignedfuelusagemetricstobusinessgoalsandmission.Thestudydescribedhere,drawsonamodeldevelopedthroughpreviousworkinsupportoftheExpeditionaryEnergyOfficeoftheMarineCorps,whichhighlightedtheimportanceofpolicy,procedure,technology,educationandculturetoeffectivefueluse.1

Thisstudyemployedanembeddedcasedesign,examiningtwoorganizations:FedEx,agloballogisticscompany,operatingmorethan49,000motorizedvehicles,652aircraft,andlocatedinover220countriesandterritories;andGraniteConstruction,anationalconstructioncompanythatusesCaterpillarheavyequipmentandFordcommercialtrucks.DetaileddescriptionsofeachcaseareincludedinthethesisandMBAproject.Thisstudydeveloped1)aconceptualmodelbasedoninformationgatheredduringaliteraturereviewandcasestudiesofrecommendedpracticesinimplementingtelematicssystems2)adiscussionofkeyfindingsofthecaseanalysesand3)achecklistofimplementationconsiderations.

ConceptualModelforVehicleTelematicsMonitoringforenergyefficiencyincreasesbusinesseffectivenessOuranalysisshowedthatfuelefficiencywasjustoneofthemanybenefitsofmonitoringvehiclefuelusage.Telematicssystemsarebecomingakeycomponentinmanyorganizations’strategicandoperationalplanningactivities.Inthetwocompaniesstudied,theuseoftelematicsbeganasawaytoreducefuelcostsandmonitorvehiclehealth,butquicklygrewintoamorecomprehensivetoolforunderstandingandsupportingeffectivebusinessprocesses.Inbothcompanies—FedExandGraniteConstruction—leadersreportedbenefitsaccruingwhentheorganizationattendedtoabroadrangeofindividualandorganizationalbehaviorsrelatedtoefficientandeffectivefueluse.

1Salem,Anita.;Gallenson,Ann."AStudyofHumanBehavior&OperationalEnergyintheUSMC."(2014).http://calhoun.nps.edu/handle/10945/44732

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Fuelmeteringwasinfactasignificantfactorinreducingtheuseoffuel—resultinginareported10-40%reduction.However,additionalusesoftelematicsfurthersupportedefficientfueluseandeffectivebusinesspractices.Forexample,telematicswereusedtoenhanceroutedesign.Betterroutesallowvehiclestotravelfewermilesoronlessabusiveroadstoaccomplishbusinessobjectives.Telematicssystemswereusedtomonitorvehicleusagepatterns,suchasharddrivingandrequiredmaintenance,increasingtheefficiencyandeffectivenessofvehiclefleetsbyincreasingvehiclelongevity,improvingreliability,andminimizingthetimevehicleswereoff-road.Thisimprovedoverallefficiencyandalsoincreasedmissioneffectivenessandsafety.Finally,telematicssystemswereusedtoenhanceworkforcemanagement–forinstancebyintegratingscheduling,addinginordermanagement,andincludingthemonitoringofhumanperformance.Systematicandholisticworkforcemanagementindirectlyimprovedfuelefficiencybyincreasingtheeffectivenessofworkers.

AllsolutionsarelocalFedExandGraniteConstructiontookasystemsapproachtosaveenergyacrosstheirorganizations.Forinstance,FedExsoughttosaveenergyinaircraft,vehicles,renewables,andfacilities.Theirairfleet,whichconstitutesalargepartoftheirfuelandmaintenanceexpense,isphasingoutold,inefficientairplanesasquicklyaspossible.TheirvehiclefleetisusingadvancedTelematicstoincreasefuelefficiencyandreducemaintenancecosts.Wherepossible,FedExhubsandfacilitiesareLEEDcertified.Finally,FedExhasbeenexperimentingwithenergysavinginitiativesincludingsolarpanels,multiplebiofuelalternatives,andalternativevehiclessincethe1990’s.Theseenergydecisionsarebasedonlocalconditions,takingintoaccountwhethertheinfrastructurerequirementsfortheseoptionsareavailableandcosteffective,andwhetherlocalcommunitiesviewsuchchangespositively.Becauseoftheirearlyeffortsinenergyefficiencyandtheirdesiretoearnrespectandgoodwillinthecommunitiestheyserve,FedExisseenasanenergyadvocate.FedExreportsontheirenergyactivitiesinanannualGlobalCitizenshipReport(GCR).EventhoughFedEx’sservicesaremoreexpensivethanmanyoftheircompetitors,energystewardshipisakeyelementintheirbusinessstrategy.FedExleadersexplainedthatitimportantthatFedExbeseenasanintegralandresponsiblepartofthecommunitiestheyserve.Localactionscreateaglobalbrandandinfluencecustomers’perceptions,resultinginanincreasedwillingnesstopayhigherfeesforperceivedgreatervalue.Leadersthussawenergyefficiencyasprovidingsignificanttangibleandintangiblebenefitsoverthecostsincurred.

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FuelusageispartofaprocessThecompanieswestudiedviewedenergyandoperationalefficiencyasintegrated,systemprocessesspanningdiverseorganizationalprocesses.Theconceptualmodeloftheseprocesses,developedthroughthisstudyisshowninFigure1.Thetelematics-organizationlifecycleprocessesinclude:planning,acquiring,deploying,managingandretiring.Thelifecyclebeginswithafocusedplanthatshouldaccountforoperationalandstrategicvalue.Theacquisitionprocessshouldalignvendorsandequipmentwiththeplan.Deploymentprocessesshouldfocusonhumanandtechnologysystemintegrationandimplementation.DuringactivemanagementoftheTelematicssystem,thedatashouldmeasureeffectivenessandensureaccountability.Finally,asvehiclesareretired,decisionsshouldbebasedonexpectedlifecyclecostsandfleetmanagementrequirements.

Figure1:Telematics-OrganizationLifecycle

Keyfindingsrelatedtothesephasesaresummarizedsubsequentlyandadetailedchecklistisincludedinanappendixattheendofthisreport.

PlanningBoththeliteraturereviewandcasestudieshighlightedtheneedforclearlyidentifyingthestrategicvalueofatelematicssystem.Strategicvalueisgeneratedwithintheorganizationalsystemandaccruesfromafocusonsupporting

operationaldecision-making.ForGraniteConstruction,theabilitytoseeiftheywereontargetwithgoalsforeffectivenesswasanimportantvaluethatemergedfromthetelematicssystem:

“Thesitepersonislookingattheoverallsiteandhowisthatprogressingagainsttheplan.HaveImovedenoughdirt,filledenoughlocations,dugenoughthisweek—AmIontarget?”

Operational Costs

Strategic Value

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ForFedExExpress,valueemergedfromthefocusonreducingoperationalcostsandincreasingthereturnoninvestment:

“Everythingthatwedeployhastohaveagoodreturnoninvestment.Inothercountries,we’retryingtostaywithwhatworksinthatcountry.InJapan,we’resuccessfulwithelectricandhybridvehicles.WenowhavetheminFrance,GermanyandtheU.K.Theinfrastructurehastobeinplacefirst.”

FedEx’sglobalreachallowedthemtotestexperimentalvehiclesandenergysolutionsinregionsthathadtheinfrastructureandpublicsupportforthetechnologies.Newtechnologiesweretestedandperfectedinregionsthatwerereceptivetothem.Customersintheseregionswereopenandsupportiveofchangesandpatientwithadjustmentstoservice.Whenadditionalcommunitiesdevelopedtherequiredinfrastructure,learningfrompreviousimplementationsfacilitatedtheadoptionandchangeinnewcommunities.AsdetailedinthechecklistinAppendixA,keyissuestobeconsideredduringtheplanningphaseinclude:

• Understandingthestrategicvalueandoutliningoperationalbenefits• Measuringoperationalbenefitsthroughoutthelifecycleofyourfleet• Exploringthebenefitsoftelematicsacrossalloperations• Utilizingtelematicstoimproveyoursituationalawareness• Positivelyimpactingsafety,andreducingcomplianceviolations• Anticipatingemergingopportunitiesastheyarise

AcquireIntheacquisitionphase,itisimportanttopayattentiontoequipmentandvendor

selection—particularlyifthesesystemsarenotintegrated.ForGraniteconstruction,thismeantselectingknownvendors:

“Frequently,youknow,therearestartupswithalowerprice,butyouuseIBMorCaterpillarforareason.And,we’regoingtohave

severalofthese—thereisnotone(system)todoitall.”

Ourcaseanalysissuggeststhatintheacquisitionphase,leadersshouldlookacrosstheirfleetsfortechnologiesthatcanimprovetheexistingvehiclesaswellasintroducenewvehiclesandtechnologies.ForFedEx,selectingsystemsthatembeddedtheefficienciesintothevehiclesallowedtheoperatorsandthemechanicstofocusonthemissionandtheircustomers:

“There’salotoftechnologyouttherethatwillhelpimprovetheperformanceofexistingfossilfuelbasedvehicles.Plusasvehiclesbecomemoreadvanced,thefuelefficiencytechnologiesarebeingincludedassafetyfeatures.Thetechnologyisveryreliableandwecannowachievesignificant

results.”

Vendors

Equipment

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Bothtelematicsequipmentandthevendorsshouldbeconsideredduringtheacquisitionphase.Asdetailedintheappendedchecklist,keyissuestobeconsideredinclude:

• Assessingtheaccuracyofsensorsandensuringthatdataisrelevantandtimely

• Designingdisplaysthatareappropriateforthebusinessstrategy• Makingsuretherightpeopleseetheinformationinawaythatiseasytouse.• Ensuringvendorsareconvenientandofferneededfeatures,customer

support,andexperience• Customizingreportsfortheparticularorganizationandaligningtothe

organization’sstrategicplan

DeployDuringthedeploymentphaseitisimportanttoattendtotheunfoldingimplementationprocessandtotheintegrationoforganizational,humanandtechnologyfactorsinfluencingusage.ForFedEx,thekeyimplementationfactorsincludemakingadjustmentsbasedonresultsnotschedulesandselectingtherightprojects.

WhenFedEximplementednewtechnologiesorpracticesmanagerswerekeytothesuccessfuldeployment.Localmanagershadtounderstandthebenefitsanddetailsofthetechnologyandfullyadopttherolloutplan.Anearly,andlesssuccessfulrolloutprogramforalgorithmicroutingwasscheduleratherthanresultsdriven.Adjustmentstothetechnologyandpracticescauseddelaysinsubsequentstepsandcreatedafalsesenseofcompletion.

Subsequentphases,thoughrefined,weremetwithresistanceandskepticismfromthelineworkers(driversinthiscase.)Thesesitesbecameresistanttofurtherimplementation.Newsiteswereidentifiedforafullrolloutandtheinitialsites,hadtobegraduallycoaxedintosubsequentchanges.FedExadoptedarevisedrolloutstrategyforthenewsitesthathighlightedsystembenefits:

“Irolledoutabetatestingstationforroutingwiththemostdisgruntleddriversfirst.Iknewtheadvantagesitwasgoingtobringtothatgroup.They

didn’twantitandtheywerevocal.Throughpositivereinforcementandshowingthemhowmuchbettertheyweredoing,theyactuallyadopteditandweresurprisedatthebenefitsfromit.Theystartedsingingitspraises,which

influencedothers.”

FedEx’ssecondstrategywastomakechangeswheretheybelievedsuccesswasassured.TwoofFedEx’sSustainabilityImpactTeamsareexamples2(Figure2).

2FedExblogpost,2015-postinghttp://about.van.fedex.com/blog/license-to-optimize/,accessed11/19/2015.

Implementation

HumanFactors

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Figure2:SustainabilityImpactTeamObjectivesandSavings

TheinitialobjectiveoftheAircraftSustainabilityTeamwastoreduceaircraftemissionsintensity20%from2005levelsby2020.By2013,theobjectivewasexceeded(22.3%reduction)andtheobjectivewasraisedto30%bythesame2020deadline.FedExaccomplishedtherevisedobjectivesbyfocusingonbothassetsandoperations.Aircraftwerereplacedwithmorefuel-efficient,longer-range,andlargerpayloadmodels.FedExoptimizedkeyaircraftrelatedoperationsthroughtheir“FuelSense”initiative.TheFuelSenseinitiativewasaninternal,strategiccommunicationcampaignhighlightingbiggainsfromsmallchangesmadebyindividualsacrosstheorganization.Therallywas“FuelSenseonlyworkswhenweworktogether.”Translatingthesavingsofsmallchangeshelpedconveythesignificanceofsmall,oftenindividualactions.Forexample,“SimplykeepingAPU(auxiliarypowerunitontheaircraft)usagedownby60secondsacrossallflightsaddsuptosaving230,000gallons.Theemissionsavoidedhereisequivalenttotaking470carsofftheroadforawholeyear.”TheinitialobjectiveoftheVehicleEfficiencyInitiativewastoimprovefuelefficiencyofthevehiclefleetby20%from2005levelsby2020.In2015thatobjectivewasexceeded(27%)andtheobjectivewasraisedto30%bythesame2020deadline.FedExisontracktoexceedthisobjectivebeforethedeadlineaswell.Theachievementhasbeenaccomplishedbyimplementinga“Reduce,Replace,andRevolutionize”strategy.Thestrategyemployedroutingefficienciestoreducethenumberofvehiclesneeded,downsizingvehiclesthattravelmoremilestomaximizefueleconomy,andtradingoldtechnologyforfuel-efficientandenvironmentallybeneficialvehicles.Improvementsincludedmoreefficientengines,theuseofalternativefuels,andnewvehicles(hybridsandall-electricwheretheinfrastructuresupportsthem).Reduce,ReplaceandRevolutionizeispartofFedEx’sbroaderstrategy,whichincludesrouting,usingalternativevehicleswheretheinfrastructurewillsupportit,andlife-endingoldertechnology(vehicles)tomakewayforthenew.ThefinalfactorindeployingaTelematicssystemispayingattentiontohowthesystemsupportshumaninteraction.ForGraniteConstructionitwasimportanttoavoidoverloadinguserswithinformation.Thefocuswasonaccomplishingthemissionwiththeleastamountofdisruption:

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“Sowe’vebeentryingtoreallybecarefulaboutoverloadingtheseguys.Thesuperintendentsspendwaytoomuchtimeinfrontofcomputers.Theirvalueisreallylookingattheassets,talkingtothepeoplethatareworkingonthem,

andjustbeingvisible.Sowe’retryingalsotofigureoutjusthowmuchisenough,right?”

Assummarizedintheappendedchecklist,keyissuestobeconsideredduringdeploymentinclude:

• Pilotingthesysteminsmallchunks• Measuringyoureffectsandmakingadjustments• Integratingwithyourexistingsystems• Activelymanagingtheexpectationsofyourworkforce• Consideringthehumanfactors• Providingtoolsandsoftwarethatareeasytouse,reducedriverdistractions,

andminimizecognitiveloads

ManageTotallifecyclemanagementrequiresmonitoringandadjustingthetelematics-

organizationalsystemtomaximizeefficiencyandeffectiveness.Matchingtherighttrucktotherightroute,optimizingthedutycyclesofthevehicles,matchingtheloadrequirementsperroutingareaperday,andmonitoringthevehiclehealthanddriverbehaviorwereallimportantfactorsatFedEx:

“Whenyoutalkabouttelematics,itisabroadbrushusedforanumberofdifferentthings.Wehaveascenariowhereyouhave

dashboardsandscorecards.Adashboard,whichistheinformationspecificatamacrolevel,andthenyouhavethe

abilitytolookatspecificscorecardsforthemanagementteam.”

DuetoFedEx’sexpanseofvehicles,thedatafromvehiclesarecollectedandaggregatedbyadatamanagementvendorwhofiltersthedatatoFedEx’sspecificationsandsendsittoFedEx’sinternaldatacenters.FedEx’sdatacenterscreateindividual(vehicleorpersonnel)scorecardsanddatadashboardsthatmanagementusesindecision-making.ForGraniteConstruction,itwasalsoimportantduringthemanagementphasetocommunicatethevalueofthesystemtotheworkforce:

“Weknowwherewe’renotspendingmoneyonfiltersandoiltoosoonorwe’renotputtingthemachine’shealthinjeopardy…wegetmoreforourmoneywithawarrantyandthemachineslastlonger,lessbreakdowns,utilizationgoesup,morale’sup.Youknow,theguysarerunninganice

machine.”

Knowingthestatusofthevehiclesimprovedperformanceandreliability.Employeesappreciatedtheincreasedsafetyandwereproudoftheirvehicles.

Effectiveness

Employee Accountability

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Aslistedintheappendedchecklist,importantconsiderationsduringthisphaseinclude:

• Ensuringthatdataissound,andthatyou’reactuallyincreasingvehicleutilization,reducingcosts,reducingrisks,andimprovingdecision-makingandreliability

• Revisitingstrategicplansorimplementationprocessesandmakingadjustments

• Activelyinvolvingemployeesbyutilizingtrainingandcommunicationtoincreaseemployeeaccountability

• Providingrewardsandsocialincentives

RetireOuranalysissuggestedthatthereisarelationshipbetweenmonitoringandvehicle

performanceandlife.Ongoingmonitoringextendedvehiclelifeandallowedtheassignmentofvehiclestoroutesappropriatefortheirage.AtGraniteConstruction,itwasclearthatidlingnotonlywastedfuel,itreducedthereliabilityofthevehicles:

“Soforme,fuelconsumptionisveryimportant.It’sover20%ofmyoverallfixedcostforthislocation,soidletimeisextremely

importanttomebecauseidletimeisawasteofcashanditwearsoutthetractorsignificantly.”

AtFedEx,agingtruckswereassignedtoroutesthatmaximizedtheirutilityanddelayedretirement.Forinstance,oldertrucksweretransferredtourbanareaswheretheycouldbeparkedwhilethedrivermademultipledeliveriestobusinessandhigh-risehousingunits.Thus,FedExmaximizedtheasset’sutilitythroughoutitslifecycleandselectedaretirementmomentthatoptimizedthereturnoninvestmentwithoutincurringlargemaintenanceanddestructioncosts.FedExsoughtforvehicleremovalanddestructiontobequickandincurminimalcosts:

“Whatweneedtodoisslowthelifecycleofavehicledownbychangingit’syearlyutilization.Sowemanagetheutilizationtooffsetthecostofcapitalimprovementofthevehicle.…Wegetitintothatsweetretirementspotata

specificpointintimetiedtoourcapitalcashflowallocation.”

Fuelusewasrelatedtoroutingdecisions,maintenancepractices,drivingpractices,andtheselectionofnewtechnologies,whichinfluencethelifeofafleet.Takingintoaccountthefulllifecyclecostsoftheirvehiclefleetsassistedthecompanieswestudiedintheirdecisionstoacquire,extendtheusefullifeof,andretiretheirvehicles.Vehicletelematicswerealsousedasatoolforbuildinganethosofresponsiblefueluse.

FleetManagement

LifecycleCosts

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Asshowninthechecklist,importantconsiderationsintheRetirementphaseinclude:

• Matchingthevehicletothejob• Selectingappropriatetechnologiesforeachsituation• Extendingtheusefullifeofvehicles• Buildinganethosofresponsiblefueluse

KeyFindingsOuranalysishighlightedsixkeyinsightsrelatedtoboththeinherentvaluethattelematicssystemsprovidemanagersandcorporateleaders,andthemethodsusedtomanagethesystems.1. Fuelperformanceistiedtofleetmanagement2. Telematicsareaserviceenabler3. Telematicsprovidesituationalawareness4. Thevalueoftelematicssystemsisemergent5. Datamustalwaysbeinterpreted6. Changedoesn’t(andshouldn’t)justhappen

1. FuelperformanceistiedtofleetmanagementAsshowninFigure3,energybehaviorscancombinetodeliverdesiredoutcomes.Theseoutcomesincludelessfuelused,maximizedwarranties,longervehiclelife,lessdowntime,optimizedvehicleuse,andhealthiervehicles.Forexample,ifonewantstouselessfuel,thatcanbeaccomplishednotonlybychangingdrivingbehaviorssuchasidlingandspeeding,butalsobybettermaintainingvehicles.Factorssuchascombustion,tireinflation,andtransmissiontuninghavesignificantinfluenceonavehicles’overallmilespergallon.Theroutingofvehiclescanalsohavesignificantimpactonoutcomes.Moreefficientroutesmeanlessmilestraveledandfewermilesresultinlessfuelusedandlongervehiclelife.Likewise,anefficientworkforcereducesdowntimeandoptimizesvehicleavailability.

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Figure3:OrganizationalandIndividualBehavior,OutcomeandBenefits

Telematicssystemscanincreasethesituationalawarenessofoperationsresultingininterrelatedbenefitsincluding:reducedbusinesscosts,asaferenvironment,enhancedeffectivenessandtheaccomplishmentofbusinessobjectives.Notsurprisingly,telematicssystemscanhelp;reducefuelcostsbyreducingfueluse,lowermaintenancecostsbymaximizingwarrantiesandloweringrepaircosts,andreduceacquisitioncostsbyextendingvehiclelifeandoptimizingvehicleuse.Forindustry,telematicssystemscanprovideaclearreturnoninvestment.Aheightenedawarenessofavehiclefleetenhancessafetybyreducingthenumberofconvoys,decreasingtheneedtolearnaboutnewvehicles,andreducingthenumberofbreakdowns.Finally,ourstudyindicatedthatorganizationsbecomemoreeffectivewhentheyhaveincreasedsituationalawarenessthatcomesfromatelematicssystem.Reducingdowntimeresultsinmoreavailablevehiclesforthemission.Optimizinghowvehiclesareusedallowsforrightsizingvehiclefleetsandhealthiervehiclesresultsinmoreuptime.

2. TelematicsareaserviceenablerTheimplementationoftelematicsshouldbepositionedtodemonstratesupportforoperations:

• Couriers(Operations)servethecustomer• MaintenanceservesOperations• RoutingservesOperations,Maintenance,andManagement

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Leadersemphasizedthatmaintenanceandfuelaresupportfunctions.Whenefficiencymetricsthatresultedfromtelematicsweretiedtooperationalandstrategicgoals,theorganizationwasabletobuildbuy-inandengagetheworkforce.GraniteConstructionhighlightedseveralwaystheyengagedtheiremployeesduringimplementation.Theleadersnotedit'simportantto:

• Makeastrongconnectionbetweendatainsightsfromtelematicsandthesmoothrunningofoperations

• Communicatehowsafetyandreliabilityareincreasedwhenavehicles’healthismonitoredanddriversarediscouragedfromhard-driving

• Demonstrateaconcernforpeopleandequipmenttosupportemployeemorale.

“Whenwestartedthistwoyearsago,itwasreallyfortheseguys.Youknow,itwasaboutmaintenancepeoplecaringforthefleet.”

AtGranite,theefficienciesgainedthroughtheuseoftelematicshadadirectimpactonemployees—employeesunderstoodtheconnectionbetweenoperatingefficiencyandjobsecurity.Thissuggeststhatensuringthatkeystakeholdersunderstandtherelationshipbetweentheirindividualgoalsandefficiencygoalsisimportant.FedEx’scompanyethosfocusedonthecompany’striplebottomlineofpeople-service-profits.Thisethosincludedcultivatingasenseofcommunity.Beginningin2008,FedExaddedaGCRaspartofitsannualinformationalpackageprovidedtostakeholdersofthecompany.IncludedintheGCRisasectiondedicatedexclusivelytothecompany’sefficiencyintermsofemissionsfromthefuelconsumedanditsenvironmentalimpact.FedExusedthe2008reporttoannounceitscommitmenttofuelefficiencyforbenefitsthatextendedbeyondthecompany’sdirect,tangibleinterests.Congruently,thecompanyhasbeendiligentindevelopingstreamlinedandefficientprocessesthatencouragebuy-inandownershipfromitsemployees.FedExhasstatedacommitmenttonotonlyimprovetheirownoperations,buttocontributeinnovationstotheindustryasawhole.FedExarguesthatitplaysanimportantroleinhowtheworldisconnected:

“FedExiscommittedtooperatingandinnovatinginnewwaysthatcanhelpourbusinessaswellasourindustry.”

1. Vehicledatashouldbeusedtoprovidebetter“service”tooperations

2. Maintenance(fuelefficiency)asa“service”increasesmoraleandbuildsbuy-in

3. Financialaccountabilityoftheunitsleadstoacceptanceandsharedgoalsforefficiency

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3. TelematicsprovidesituationalawarenessUltimately,vehicletelematicsareatoolforsituationalawareness.Forindustry,businessanalyticsareanintegralpartoftheorganizationalfunction,allowingorganizationstoassesstheirbusinessprocessesandminimizetherisktovehiclesandpersonnel.Anup-to-dateawarenessofhowpeopleandfleetareoperating,allowsleaderstomaketheeffectivechoicesaboutresourceallocation,maintenance,andoperationalpossibilities:

“Anahamoment…knowingwecanactuallygothisfar(ordothismaintenance)becauseweknowwhatthisthingisgoingtodointhisenvironment.”

Knowingwherevehiclesare,whatconditiontheyarein,andwhatcanbeexpectedfromequipmentallowsforbetterdecision-making.Monitoringfuelefficiencyandusagepatternsfacilitieseffectivedecisionsaboutwhereandwhenvehiclesoperate.Beingabletobeproactiveregardingmaintenancemakesresourcesutilizationmoreeffectiveandallowspreventive

maintenanceandrepairstobedonewhenneeded,notonaschedulebasedonaverages.And,finally,knowledgeoffuel-usepatternsandvehiclereliabilityimprovesmissioneffectivenessbyallowingtheorganizationtoextenditsreachandplanoperationsbasedonhistoricaldata.Telematicsreportscontainaggregated,compiled,andfiltereddatathatcreatecriticalinformationaboutthehealthofthesystem.FedExusesscorecardstoshowwhethertheyhavetherightvehicleontherightrouteandtoindicateifitiswellmaintained,loaded,anddriven.Managershaveviews(dashboards)intotheinformationstreamsbasedontheirfunctionalareas,region,androle.Dataisusedtomanagetheflowofthedailybusiness,toalignpackageswithvehicles,vehicleswithroutes,andfacilitiesandvehicleswiththeworkforce.Dataisusedtomonitorandmanageallsystems.FedExusesexternalvendorstocollectandaggregatethedata.ItissenttoFedEx’sdatacenterswhereitisanalyzedanduploadedtodashboards,routesandscorecards.GraniteConstructionusesbothexternalreportsfromCaterpillarandtheirownreportstiedintotheirinternalbusinessanalytics.

4. ValueisemergentAnotherimportantlessonisthatthevalueandopportunitiesthattelematicssystemsprovidearenotalwaysimmediatelyevident.Itisimportanttohaveclearbusinessreasonsforimplementingasystem,howeveroncethesystemisimplementedelementsinteractinuniquewaysforeachorganization(Figure4).

1. Usagedataallowsforbetterresourceallocation

2. Areactiveapproachtomaintenanceandfuelusesmoreresourcesandcoststhecompanymore.

3. Beingawareoffuelandmaintenanceimprovesmissioneffectiveness

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Figure4:FeatureUseandPotentialOutcomes

IntheGraniteConstructioncase,theinitialtriggerforthetelematicssystemwasaneedtoreducefuelcosts.Utilizingbuilt-invehiclesystems,Granitebeganmonitoringcorevehiclefunctionssuchasfueluseandmaintenancecycles.Astheyhavebecomemorecomfortablewiththedataandthetechnology,theyarediscoveringhowthetelematicssystemsallowsdeeperinsightintotheiroveralloperations:

“IamactuallyextremelyhappywithwhatIhave….andit’ssomethingthatgetsbetterandevenmoreusefulastimegoeson.”

Thissituationalawarenessallowedtheorganizationtomanagefuelusemoreefficiently,conductroutinemaintenance,andobservethemovementsoftheirvehicles.Then,theorganizationwasabletoexpandthekindsofdatathattheyusetoincludeotherbusinessintelligence–aretheiremployeeswherethey’resupposedtobe?Arewarrantiesbeingmaximized?Areroutesoptimized?Astheybeganusingtheseadditionalfeatures,theuseoftelematicsexpandedtoincludemanagingthetotallifecycleofthefleets.Telematicsareusedtooptimizepreventivemaintenance,reassignvehiclestomoreappropriateenvironments,andadjustfuelingprocedures.Asthecompaniesbecamemoreconsistentintheiruseoftelematicstheywereabletomoreaccuratelypredictthefuture–usefullifetimesofvehicles,assetplacement,trainingrequirements,fuelrequirements.Finally,thecompaniesaremovingtomorefullyautomatedfleetsthatintegratetelematicsintoworkprocesses.Vehiclemetersandmonitorsallowunmannedoperationwithmuchmoreefficientuseofmenandmaterials.Caterpillarforinstance,isusingfullyautomatedexcavationandloadingequipmentinsomeoftheirminingoperations–thebackhoeautomaticallyshovelsearthintoaloader,asensorknowswhentheloaderisalmostfull,andthesystemthenmovesasecondloaderintoplace.ForFedEx,constraintsofferedopportunities.Variationsinlawsacrossstateandprovinciallines(exhaustlimits,idling,safety,andtheenvironment)providedpracticeguidelines,specializedvendors,andopportunitiesthatcreatedcompetitiveadvantages.Forexample,idlingrestrictionsandemissionlimitsoncommercial

1. Growyourprogramfromcoregoals

2. Managethroughoutthetotallifecycle

3. Focusonsituationalawarenessandbusinesspredictability

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fleetsinsomeregionsdrovevehiclemanufacturerstoprovideautomaticshut-downsystemsandcleanerengines.FedExonlyhastospecifytheidletimetheyneedanditissetbythemanufacturingfactory.Likewise,GraniteConstructionwasdriventotelematicsbylocalandstateemissionandmileagerequirements.Safetyregulationsalsotriggeredtheimplementationoftelematics.Safetyregulationscalledforvehiclemanufacturerstoprovideonboardcomputersandsensorsintheirnewmodelsandprohibiteddriversfrombeingdistractedwithvisualdisplays,phones,andothercognitivedistractorswhileintransit.

5. DatamustbeinterpretedTheidealofafullyautomated,self-regulatingsystem,however,isstillinthefutureforcomplexandchangingenvironments.Ouranalysisindicatesthatsystemsinsuchenvironmentscurrentlyrequireclosehumanoversight.Asoneparticipantsaid“you'vegottohavealittlebitofreality.”Realitybeginswithmakingsurethatyouknowwhatyouwanttomeasureandwhyyouwanttomeasureit.Repeatedlyourparticipantsstressedtheimportanceofbeingclear(andlimited)intheiroriginalselectionofwhattheywantedtomonitor.Metricsmustbetiedtoclearbusinessoutcomes.Additionally,participantsnotedthatdatasystemscanmakeerrors:

“Well,you’vegottoremember,thisisdata.You’vegottohavealittlebitofrealitytogowithit…themotorgradersweknow,they’rerunning.They’renot

justidling.They’redoingsomething.”

Oneneedstolookatusagepatternsovertimeandwithincontexttoensurethattheinformationisaccurate.Thisrequireshumanoversightbysomeonewhohasaclearunderstandingofoperations.Usagepatternsofvehiclescanhavesubtle,acceptablevariationsthatonlyahumanoverseercaninterpretandactupon.

6. Changedoesn’t(andshouldn’t)justhappenFinally,it'simportanttorememberthatbuildingbuy-inandbeingadaptableareimportant.Buildingbuy-inspeedsuptheprocessofchange,reduceswork-arounds,andmakesthechangesustainable.Tobuildbuy-in,thecompanieswestudiedfocusedonequipmentthatwas“goodenough”ratherthanputtingoffimplementationuntilthe“perfect"technologycamealong.Leadersnotedthattechnologyhasashortshelflife,andsuggestedselectingasystemthatmakesthemostsense,now.ForFedEx,telematicsworkinsomeinstancesandarelessimportantinothers.Notallvehicles

1. Selectwhatyouwanttomeasure—andwhy

2. Datasystemserr—lookforpatternsacrosstime

3. Usagepatternscanbesubtle—coordinatewithoperations

1. Don’tletbettergetinthewayofgood—findthesweetspot

2. Makechangesbasedonresultsnotschedules

3. Addvaluetoexistingpractices

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supportthetelematicssystem,andnotallneedto.Findingthe“sweet-spot”fortherighttechnologiestooksometrialanderror.Forexample,algorithmicroutingworkedinsuburbsbutnotaswellinurbanareasorruralareas.FedExdoesnotexpecttogetawayfrompetroleumproductsforalongtime,butthecompanyplanstoworktomakeincrementalchangesthatservetheirstakeholdersanddemonstrategoodcitizenshipinthecommunitiestheyserve.Second,meetingobjectivesismoreimportantthanmeetingtheschedule.Implementingchangeswheretheyresultinhighreturns,ratherthanacrosstheenvironment,isessentialtosuccess.Lastly,leadersnotedthatifonewantstoseetelematicsadopted,itisimportanttoaligntheefficiencyeffortswithexistingpractices.Forexample,ifanorganizationhasastrongsafetyethos,showhowreducingfueluseenhancessafety.Ifanorganizationhasestablishedmodesofcommunication,usethemtocommunicate.Ifanorganizationvaluesreliability,connectthedotsbetweenfuelefficiency,reliability,andmission.

RecommendationsandConclusionTheobjectiveofthisstudywastoprovidedeeperunderstandingoftheuseandvalueoffuel-relatedmeteringandmonitoringofvehicles.Threekeytakeawaysare:useTelematicsfordeepsituationalawareness,maketargetedchangesandadaptasnecessary,communicatewidely.First,vehicletelematicscombinedwithprocessandmissiondatacansupportsituationalawarenessanddiagnosisofbarrierstoeffectivenessandefficienciesinorganizationalsystemsandstrategies.Targetedreports,availablethroughdashboards,canprovidemanagersandseniorleadershipwiththetimelyinformationtomakeandmonitorcriticalbusinessdecisions.Dashboardscanprovideoperationsmanagementtimelyaccesstocriticalsystemsandhigherleaderstheabilitytolookacrosstheorganizationanddrilldowntotheindividuallevelwhenneeded.Next,makeincrementalchangesandadapt.Reducefuelusewherebenefitisthegreatest,notunilaterally.Makechangesthatcreatesubstantialsavingsfortheentireorganizationbytargetinginnovationtothelocationsorprocessesitisbestsuitedfor,forinstance,retiringoldequipmentinremoteareasandusingnewtechnologieswhentheyaresuitedtotheloadandworkrequired.Further,ouranalysissuggeststheimportanceofstockingappropriately—maintainaminimumsurplusfuellevelforthetask.Fuelconservationandinnovationarealsodirectlyrelatedtospanofcontrol;whereyouhavethemostcontrol(e.g.facilities),useinnovativefuelsandtechnologies.Thesesavingscanthentransfertosituationswhereyouhavelesscontrol.Leadersinbothcompaniesstressedtheimportanceofthemissionandkeepingthoseclosesttotheactualworkfocusedonthemissionandcriticaltasks.Finally,implementthechangesthatmakethemostimpactfirstandcommunicatetothefullorganizationandtotheaffectedcommunities.Changingaircraftandvehicles

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forthosethatareengineeredforfuelconservationandtheworktaskscancreatesignificantsavings.Lettingpeopleknowabouttheseincrementalsuccessessetsastandardwithintheorganizationandsendsamessageofglobalresponsibility.Fuelandconservationgoalsneedtobereachable,hailedassuccesses,andscaledupovertime.Reducingfuelusetakestime,system-widestrategies,andorganizationalprocessestosupportthem.

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TelematicsChecklist

Plan

StrategicValue

❑ MissionsupportAreyoumeasuringthingscriticaltothemissionanditseffects?Doyouhaveawaytoincorporateopportunitiesthatemergeasyouusethesystem?

❑ SituationalAwarenessAreyouawareofhowpeopleandvehiclesaredeployed?Arevehiclesandpeoplematchedtooptimizeeffectiveness?

❑ SafetyHowistheworkforcekepthealthy,safe,andpainfree?Howcanlogisticalimprovements—routing,supply,andmaintenance—impactsafety?

❑ ComplianceHowcantelematicshelpyoumeetstate,federal,foreignregulations?

OperationalCosts

❑ FueluseHowcanreducedfuelusetransfertoothermissionobjectives—budgetreallocation,timelinessofmission,extendedreach?

❑ VehicleroutingHowcanyougettherightvehicleinplaceattherighttime?

❑ WorkforceManagementIspersonnelefficiencyoraccountabilityimportant?

❑ AssetmanagementWillimprovedrouting,bettervehicleallocation,andproactivemaintenanceimprovemissioneffectiveness?

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AcquireEquipmentSelection

❑ AccurateSensorsAreyourinstrumentsaccurateanddotheyreduceerror?

❑ AppropriateSensorsIsthetargeteddatarelevant,timely,andeasilyintegrated?

❑ UsefulDisplaysCanyouviewandcreatereports,andneededtrends?Areyourdisplaystargetedtotherightchangeagents?

❑ UsableDisplaysIsdatareadable,easilyaccessed,interpreted,andreported?

VendorSelection

❑ FeaturesDofeaturesetsalignwithstrategyandHumanFactors?

❑ SupportIstheregoodcustomerservice—availability,reputation…?

❑ ExperienceIsthereasolidhistoryofproductlines,installation,andmaintenance?

❑ CustomizableCandisplaysandreportsberetrofitted,reportedbylineofbusiness,businessunit,manager,vehicle,etc.?

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DeployImplement

❑ TimeAreyourpilotprogramsbalancingproofofconceptwithdemonstrableresults?

❑ TrainingIstrainingappropriateandmemorable?Dousershavetherequiredskills?

❑ IntegrationDoyoursystemstalktoeachother?Istheremanual“copyandpaste”

❑ MetricsDothemetricscascadefromyourgoalsandmission?Arethemetricsrealistic?

❑ RolesWhoseeswhat?Dodecisionmakersseetherightdata?Shoulditbevoluntaryorautomatic?

❑ CommunicationDocommunicationmodesalignwithexistingnetworks?Doesdatareflectthemissionandgoals?Canexceptionsandalertsbeeasilycommunicated?

❑ ChangemanagementAreyousettingworkforceexpectations?Howcanyouleverageprideandcompetition?Howcanyouminimizeprivacyfears?

HumanFactors

❑ AttentionAre“roaddistractions”minimized?Howcanmissionrisksbereduced?

❑ CognitiveLoadDothedatavisualizationsrequirealotof“thinktime”?Isthedatareadable?

❑ UserControlIstherehumanoversightoninterpretingmetrics?Dousersfeelthattheyarelosingtoomuchcontrol?Canusersdrilldowninthedata?

❑ ErrorpreventionAreerrorsorwrongchoicesminimized?Aregoodbehaviorsinstilled?

❑ AccessIsiteasytogettotheinformation?Isinformationreadilyavailableusingexistingtools?

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Manage

Effectiveness

❑ SoundDataIsthedatapartitionedbymissionarea,statisticallyanalyzed,andintegrated?

❑ UtilizationAreyoumaximizingreach—downtime,resources,supply,distancetravelled?

❑ FuelcostsCanyoutransfersavingstomoretrainingtime,equipmentandresources?

❑ OperationalcostsHowdoesfuelinteractwithrefueling,maintenance,personnel,andlogistics?

❑ RiskHowdoesreducedfueltranslatetorisksversusmission—whatarethetradeoffs?

❑ Decision-makingHowdoesthedatahelpyoumanageassets,personnel,tactics?

❑ ReliabilityHowcantelematicssupportproactivemaintenancethatreducesdowntime,increasessafety,andextendthelifeofthevehicle?

EmployeeAccountability

❑ RewardsDoyouusefinancial,social,task,andpersonalrewards?

❑ CommunicationHowdoyoumakepersonnelawareandanswerablefordrivingbehaviors?

❑ TrainingHowdoyoueducateinefficient,safe,andnon-aggressivedriving?

❑ CohesivenessHowdoyouusedatatomotivatepersonnel,buildanethos,andmakefuelsavingsagame?

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Retire

FleetManagement

❑ VehicleRoutingIsvehiclelifeextendedthroughroutechangesandrelocation?

❑ MaintenanceIsvehiclemaintenancereducingfuelandextendingthelifeofthevehicle?

❑ DrivingpracticesDodrivingpracticesleadtofuelefficiencyandextendthelifeofthevehicle?

❑ NewtechnologiesWhataretherisksandbenefitsofselectingnewoverproventelematics?

❑ RightvehiclesArevehiclesmatchedtolocationforoptimumperformance?Areagingvehiclesmorecostlyduetomissassignment?

❑ FixordestroyWhatarethecosts/benefitsofkeepingoldervehicles?

LifecycleCosts

❑ AcquisitionCanbuilt-intelematicssystemsbeused?Cannewsystemsservemultiplefunctions?

❑ MaintenanceArevehiclesmaintainedbeyondusefulnessandcosteffectiveness?

❑ RetirementAreretirement/destructionpoliciestimely?

❑ CohesivenessHowdoyouusedatatomotivatepersonnel,buildanethos,andmakefuelsavingsagame?