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I was recently speaking with the CIO of a major heavy equipment dealer in Canada, and he made the comment that telematics was completely changing the game.  I have known this particular individual for a few years and know that he is not someone who throws around over-used, ambiguous expressions, so I  was intrigued.

He was talking about the ability to gather data (i.e. engine temp, oil pressure, emissions data) from a truck or machine remotely, and then doing something with the data that would provide value to the manufacturer, the dealers, and ultimately to the owner of the truck or equipment.

(Click here to access the SAP whitepaper Leveraging Telematics to Improve Customer Relationships and Product Reliability)

So where does this value come from?  How can the data be used?  Does this replace existing business processes or complement them?

So we began discussing the possibilities for how the data could be used.  The first thing we talked about was the ability to gather machine performance data in order to answer question such as “Is this machine performing the way it was designed to perform?” or “Do all of our machines run like this one?” and “What about the machines operating in Texas?”  So these questions were all about retaining machine performance history and being able to analyze the data.  Read “Big Data” here.

But what if we found a trend or a correlation between performance characteristics and machine failures?  We could effectively monitor machines in
real-time and send alerts to interested parties when a machine appeared to be nearing failure.  Or maybe just monitor a machine to see if it’s being used or misused.  A dealer that rents equipment could monitor its use while out on rental.

But what about avoiding product failures all together by fixing design issues or manufacturing issues.  Sometimes the hard part is determining the root cause of the failure.  Some companies are looking at warranty analysis as a way to discover chronic product issues.  The problem with this is that the warranty
data will tell you what work was done to fix the problem, but won’t tell you why the problem occured.

The machine data can be used to better understand what was going on with that machine before it needed repair.  For example, engine water pumps fail and need replacement.  So is the water pump poorly designed?  Or did the operator allow the coolant to escape causing the engine to overheat.  Maybe the pump didn’t need replacement at all.  The telematics data can help diagnose the problem and better understand the root cause of the product failure.

And think of the potential impact this has on warranty costs!  If I can more accurately determine root cause, I stand a much better chance of permanently fixing the real issue, thereby reducing failures, repair bills, warranty claims, and the cost of downtime.

The point is this:  Once you start thinking about how telematics data can be used to improve products and service, you will likely think of more and more potential opportunities for this quickly-evolving technology.  As SAP gets further into the use of telematics data to generate benefits for manufacturers, dealers, and operators, we will see more and more new business processes that improve product quality and reduce costs, leading to more sales and higher degrees of brand loyalty for our customers.  This is truly a technology that could really change the game in the truck and heavy equipment industries.

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  1. Neetin Datar

    Excellent scenarios, Chet!

    I recently watched a CNBC documentary – Rise of the Machines. Take a look at the video and see how sensor data is being used by Union Pacific to predict wheel problems ahead of time so they can be changed before any disastrous event happens. It also helps save them big $$.

    http://www.cnbc.com/id/101030047

    -Neetin

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