Investing in asset tracking can unlock powerful benefits for your business. From preventive maintenance to asset recovery, being able to monitor your assets remotely is a game-changer for businesses in construction, logistics, agriculture, and more. And one of the best aspects of asset tracking technology is that you can track the ROI.
The sensors and software that make up asset tracking solutions can do a lot, and it’s important to ensure you’re maximizing the value they provide. Continual measurement and improvement are vital to any asset tracking program. Here’s how to measure and improve the ROI of your asset tracking system.
To Determine ROI, Measure the Right Metrics
As you configure your telematics solution, you’ll also need to configure the reporting that you’ll get from it. These are the key performance indicators (KPIs) we recommend you track to measure ROI.
Inventory Audit Efficiency
Auditing is essential to ensuring that your assets are where they should be. They can be stolen, lost, or placed at the wrong location. Without performing regular audits, you may have no way of knowing an item is missing until you need to use it. Asset tracking greatly reduces the time you spend searching for and logging the location of your assets. Keep track of the man-hours you dedicated to manual audits vs. the man-hours required to perform audits with an asset tracking solution in place.
Cost of Lost Equipment
When a piece of equipment is lost, the costs quickly add up. Without the right equipment, workers spend valuable time waiting around or coming up with workarounds. This can lead to delayed schedules and throw off downstream workflows. And, if the equipment isn’t found, it must be replaced. In the construction industry alone, less than 25% of stolen construction equipment is recovered, costing the industry more than $1 billion per year. Because asset tracking allows you to identify theft early, and it acts as a deterrent, keeping track of how much you saved on lost equipment costs is an important KPI.
Lost equipment isn’t the only contributor to lost man-hours. Worker productivity also suffers in the event of a breakdown or when equipment isn’t where it’s supposed to be. Asset tracking can not only prevent unplanned worker downtime, but it can actually improve their productivity. When workers can access equipment quickly and easily, they can devote more time to productive tasks. That’s why measuring labor productivity rates can help you get a clearer understanding of the value of your asset tracking investment.
Rejected Freight Rates
In the logistics industry, loads can be rejected for any number of reasons. And for food and beverage distributors, the risk of a load being rejected has only increased in recent years. Newer regulations, such as the Food Safety Modernization Act (FSMA), created new standards under which loads could be rejected. And the Food and Drug Administration’s Sanitary Transportation of Human and Animal Food rule requires that shippers keep comprehensive records on maintenance and how food is transported. Asset tracking helps prevent rejected loads by ensuring your practices meet regulatory standards and provide customers with an audit trail. Tracking your rejected freight rates can help you see just how much the solution is paying off for you.
By monitoring equipment performance, environmental conditions, and usage rates, asset trackers have become a central component of preventive maintenance programs. For instance, if a piece of equipment is exposed to extreme temperatures, you can be notified before the weather conditions create a maintenance issue. Or, you can replace equipment components based on utilization rates, not just the amount of time that has passed. These capabilities can translate to real cost savings, in terms of preventing downtime, reducing maintenance costs, and extending the lifespan of your equipment.
Asset tracking can be a key tool for optimizing revenue. For example, equipment rental companies can identify which assets are most and least in demand, and adjust their inventories accordingly. Also, with the increased capabilities that you gain from asset tracking, you can offer greater value to your clients. That value can translate into new revenue streams. Logistics providers, for instance, can offer clients real-time data on the status and location of their shipments.
Measuring ROI With the Right System
Being able to easily monitor these KPIs will come down to the system you use to manage your telematics. Today, you’ll find many asset tracking providers who claim that they can provide you with reporting. However, not all providers can offer the ease of use and customization that you need. The data that asset tracking solutions provide can be overwhelming. Without the right configuration of reports, it’s easy to become overwhelmed.
Look for asset tracking solutions that come with the following features:
- Cloud-based reporting and monitoring software that can be accessed from anywhere
- Reporting tools that offer standard and customizable reports
- The ability to drill down into reports to view asset-level data
- Plug-and-play functionality that allows you to start collecting data quickly
- Activity history to support reporting and auditing needs
A system with the right reporting functionalities will enable you to easily monitor the KPIs that matter most to your business and can help you maximize the ROI of your investment.
Ways to Improve Asset Tracking ROI
With the right tools in place to monitor ROI, many companies find themselves looking for strategies to help them maximize every dollar of their investment. One way to do that is to use asset tracking to minimize the amount of time equipment isn’t in use or is in transit between locations. An asset tracking solution with robust reporting can help you identify which pieces of equipment aren’t being used so you can decide if it would be more effective to put the equipment elsewhere.
You can also use asset tracking to improve accountability amongst your employees. Telematics can track driver behavior, for instance, so you can implement corrective training when needed. You can also tie historical data on assets to employee performance. If a piece of equipment tends to be idle longer than other comparable pieces of equipment on the same job, it may be due to an employee training issue. By identifying that asset, and investigating the circumstances underlying the usage patterns, you can guide that employee to perform the right behaviors, and ultimately reduce equipment idle time.
Identify the Ideal System for High Asset Tracking ROI
At HoloTrak, we work with construction companies, equipment rental businesses, government agencies, and more to provide high-quality asset tracking technology and easy-to-use, customizable software to keep track of it all.