GPS Tracking ROI

Here’s an interesting news release I just came across. It’s actually singing the praises of one of my competitors, but the fact that the company involved didn’t buy from me doesn’t negate the value of the system they bought.

As you can see they originally bought the GPS tracking system for some valid but highly technical expected returns. But low and behold they found that the employees were (consciously or unconsciously) stealing enough time that the system would pay for itself many times over, just by verifying time and attendance.

I’ve written about this in the past but I often consciously try to avoid talking about employee theft too often, because I don’t want to appear just as a grouchy old curmudgeon. But, I guess I am.

This morning I visited an old client to check out a perceived problem with his GPS tracking system. This gentleman spent a little under $5,000 for the hardware and software to track a small percentage of his fleet. It’s been running fill time now for a little over 6 months and here’s some highlights of his results:

An employee was proven to have been stealing as much as 8 hours a a week. Just not going to work on Saturdays when he was being paid to work. When challenged on the discrepancy between his actual job performance as recorded by the GPS tracking unit and the time sheets which he submitted over his signature, attesting to their accuracy, the employee stated, “I’m not going to work for a company who doesn’t trust me”! This little incident alone saved far more than the cost of the system in itself.

Another employee was doing his job pretty well, day in and day out. However, on Saturdays the employee’s truck was observed to be going to a residential location and sitting for an hour or two in the afternoon, then coming back to Headquarters at the normal quitting time. Turns out the location was the home of an old high school buddy, where the employee just sat and chatted for a bit to keep in touch. His rationale when questioned on this outright theft of time from the employer? “well my day’s work was done and the office wasn’t open so what did I have to do if I came back before 5″? Hmm, does the concept of filling out the time sheet and going home, thus not having the company pay for his chit chat sessions enter into anyone’s mind? This incident alone accounted for several thousands a year in wasted salary.

A third employee didn’t seem to be making his required stops at customers. in addition, he was logging about 8 times as much truck idling time than his co-workers (make sure you buy a system that logs idle time, not just stops). Well, turns out the guy _was_ going to the customers. he was just leaving his brand new truck, filled with expensive company property, sit outside the customers’ locations with the keys in the ignition and the engine running. In addition to the obvious potential for theft and the liability of the company had the truck been stolen, this idling added at least 4 to 5 dollars per week to their fuel bill.

Employee number four was a quick worker, The first month of his driving showed he exceeded 70 miles per hour on city streets and arterial roads 21 times (an average of better than once a day). When questioned he argued that he failed to see any problem he’d never had an accident. Forget the huge risk exposure he was leaving the company open to, do the math as to how much more fuel a truck uses at 70 that at 45 .. the speed limit on most of the roads he was traveling.

Well, these stories could go on and on, but these were the only 4 driver’s participating in the initial pilot program. That’s right, 100% of the drivers were breaking company rules and costing the company substantial, identifiable money.

I have not yet found a client who has not noticed immediate problems with his or her operation the first week GPS tracking was used. The client mentioned in this post and I today agreed that in the first 6 months of operation the tracking system (which, by the way has zero (as in no) monthly cost) , has paid for itself at least three times over. On an annualized basis that seems like a 600% return on investment (ROI) to me.

Can anybody direct me to an off-the-shelf business solution that will return on investment at a higher rate?

This one is kinda cute,spouse picked it up yesterday afternoon. Didja happen to notice the name of the roofing company? Yep, “Precision Roofing”. Well, at least they weren’t in Granada Hills when they were supposed to be in San Pedro. But this sort of thing happens every day. It’s a big world out there and it’s getting bigger. Let’s look for a moment at this incident and the dollars and cents involved.

If the roofing company owner had ever been approached to track his crews with GPS we can be pretty sure he would have reacted, “I can’t do that, it’s too expensive.”

For a decent real-time tracker on the crews truck he would have laid out about $600 and a buck a day for the live reporting. Let’s make a guess at 5 crew trucks, so that would be a one-time expense of $3,000 and $150 a month on going to monitor all those jobs.

A roof job in the San Fernando Valley runs around $9,000 … he’ll certainly wind up paying that much or more to get out of this incident, where tempers have already been riled up … and don’t forget the lost time .. the job those “wrong roofers” were supposed to be on when they made their mistake.

So it’s easy to see he’d be money ahead just avoiding one incident every three years or so. As to the monthly running cost? 4 guys on a crew, 5 crews is 20 men at an average of say $11 per hour … at probably $37,000 per month in labor. Nobody I’ve worked with using live tracking hasn’t found a 10% savings in labor by watching start times, stop times and lunch hours. That’s close to $3,700 a month, easy, in savings, divided by $150 in running cost .. you do the math on the savings.

I wonder if he’s reading this and saying he can’t afford it now? I wonder if you are?

One can learn a lot from dumb old roofing shingles.

Well what did Dave find to complain about here? Looks like good news, and it is. But no wonder it is taking so long to properly integrate GPS into our public safety infrastructure.

based on the fugues in the article they are spending more than $8,000 each to ‘upgrade the cars’ computer systems’, including GPS tracking. Now, don’t get me wrong, you can’t put a decent in car computer system in a police vehicle for “a buck 92″, but folks this is outright ridiculous.

Go find the most rugged tablet PC you can find, ad a Wi Fi card and a GPS card and a Wi Fi hot spot on the town’s water tower and you are in business. Of course, Motorola won’t make a profit of $6,000 per car, but then this isn’t an anti-Motorola blob, is it?

The advantage of the dispatcher being able to see which car is closest as mentioned in the article does make a big improvement in operations and safety. I consulted for an ambulance service in a western state that was able to take several ambulances and crews off line because of dispatcher insight gained by GPS tracking … and if you don’t think _that_ was a saving, better think again… about $300k per ‘bus’ when you factor in all the costs .. talk about ROI for the GPS system.

The other hidden benefit Haverstraw is going to see with these units is a tremendous decrease on the channel chatter over their scarce and expensive voice radio channels. In one analysis I was involved in here in the Spring we found more than 80% of the voice messages flowing in the system were of three types: What’s your 20, my 20 is exchanges and officer safety calls… the dispatcher had to set a timer after the end of each call to an officer and if that officer had not been heard from in 4 minutes the dispatcher had to send out a voice query that the officer responded to with an “I’m OK” code word. The third and most prevalent waste of bandwidth? The four digit representation of time added at the end of every call … so the officers would have the time when the received the call to put in their log books, Add up all these words that would not be needed with a GPS system and the load on the voice channel goes way, way down.

If you’re involved with voice dispatch and you’re feeling a pinch, look into a non-traditional way to get more use from the same channels… maybe you don’t need all those base stations and other gee-gaws Motorola wanted to sell you.

According to this industry news letter/commercial directory re-seller the ROC (Taiwan) and the PRC (China proper) will tally up a 47% increase in GPS sales over 2004. Now 47% more of anything in one year is a lot. Most of these products are things the average consumer never knows he or she has … circuit boards, loose chips, sealed black boxes and the like that gets integrated into consumer products.

Funny that I’m writing abut China twice in a row, but beleive me, you’re going to see a lot more about China in this coming year, even if I go on to greener pastures.

You know a lot of people in the US bitch and moan about China and other Asian countries taking business away from the US. A number of US workers are actually hurting as well as the whiners who just complain, blogging on their Taiwanese-made computers while sitting in their Chinese-made chairs. There’s all kinds of reasons offered as to why the US is falling behind, and I am sure not smart enough to know all of them … but I’ll tell you a little story that may illustrate a few things.

When you get off an airplane in a US passenger terminal, what do you see? If you’re at MCO you see signs for Disney World … bring the kids, have a ball, spend a small fortune … produce? Nothing. If you land in LAS you see huge ads for casinos … bring the girlfriend, leave the wife home, what happens in Vegas stays in Vegas .. play the sots, lose a bundle … produce? Nada. Multiply this again and again for any city you can think of. Last time I was in Detroit I don’t recall even seeing anything that would show a visitor that it was the car capital of the world. And in Los Angels, which used to be the home of more than half the world’s commercial aircraft .. Douglas .. what will you see? An ad for Brokeback Mountain, perhaps.

Well folks, slot machines and gay love stories don’t build an economy. They dissipate an economy. Get off the plane in Tokyo and guess what you see when you claim your luggage? Complementary baggage carts all festooned with advertising in many languages by their sponsor … Fanuc Ltd. Never heard of them, I’ll wager. Who’s Fanuc? (no it’s not Italian slang for the Brokeback Mountain boys), they are one of the world leaders in computer controlled machine tools and robotics. machine tools? Yeah, those things that carve metal into finished parts that actually build a product and _produce_ something. Guarantee any Japanese getting off the plane knows who and what Fanuc is.

Get off the plane in TPE (Chiang Kai Shek Airport .. yep another one of those fire-breathing warlords the US put in power and is still causing problems years after his death). Know what’s on the wall ads? Bolts, nuts, machine tools and more. Hardware and machines that actually _make_ things. Now don’t get me wrong you can see scenic wonders in Taiwan or you can go down to their version of the “strip’ and waste your money on a hooker same as Vegas… but the Taiwanese aren’t focused on play toys and playtime. Their focus is on making the toys for us ever more lard ass Americans to buy.

Get off the plane in Guangzhou (formerly Canton for the geography-deprived) and you know what’s on the wall? Posters of pretty Chey girls. No, not not “Cherry girls”, “Chery girls”. Don’t know what Chery is? General Motors does. They are engaged in a legal battle to make the company change its name. GM’s legal issue? Chery is too easily confused with Chevy. Look here: http://www.cheryglobal.com/ This company makes more than good enough cars that get great mileage and cost. in China, under $4,000 … nope, that’s not a misprint, their prices start at $3750 US. Malcom Bricklin, the US investor who brought us the Subaru is recruiting dealers right now to import the Chery to the US. Beleive me, GM has a lot more to worry about than the name of these little puppies. (by the way, that Brokeback Mountian DVD is available, pirated, in the street market for about 5 or 6 Renembi .. about 50 to 75 cents US)

So what can you take away from today’s rant? If you own a company, think about actually producing something. If you want to start a company, think about actually producing something. If you have a company that produces somehting and you use trucks to hauk any of it, equip your trucks with GPS tracking to improve your bottom line and keep you in business. If you have a kid in school, send him or her to classes in engineering, math and (better hedge your bets, Chinese).

If America thinks it can just sit around and getter fatter on entertainment, video games and hookers (oh sorry, Las Vegas, i meant good family-oriented pleasures, like losing the mortgage money but getting free drinks as you go down the tubes) the our thinking is wrong, wrong, wrong. Let’s do some right thinking for a change.

So, what’s newsworthy about this? In my view quite a bit.

First of all, I’ll admit to being a Chinafile. Regardless of anyone’s viewpoint regarding how China is not the US’s friend and China will take over the world, and they are all still a bunch of ChiComs, the world still goes on. Those who ignore China are no better than ostriches sticking their heads in the sand. those who discount China, especially in business or government, do do at their own risk.

Ok, here’s the situation. The Three Gorges area on the Yangtze river is kind of the Niagara Falls of China. It’s coming into New years there (Chinese New Year, D’oh), and the Chinese are big, big tourists. So demand for cruise ships of all sizes and description is booming. The Three Gorges area is also notoriously dangerous.

So the Yangtze River Maritime Safety Administration , good government bureaucrats that they are .. you know China, don’t you .. huge, slow-moving bureaucracy, “Chinese Fire drills”, etc. .. had two choices. They could sit on their butts like, say, Michael Brown and FEMA and then tsk, tsk, tsk at the inevitable accidents that would occur, or, they could take action.

The action they took is simple, cheap and effective. Instead of waiting for some kind of law to force ship owners to equip their vessels with GPS, the administration just bought GPS units and placed them, temporarily, on any ship wanting to enter the danger zone. result: Safety enhanced, goals met, out of pocket expense near zero in comparison to the non-supervised results. Also, some good public relations as a fallout.

Several years ago when I was consulting for a GPS tracking/GIS (Geographic Information Systems) firm we spent a lot of money to attend a useless TSA (Transportation Security Administration) trade show and show off our products. One product was a utterly reliable self-contained GPS receiver/satellite transmitter that reported vehicle positions anywhere there was WWW access. A US Coast Guard officer approached me and outlined a situation very similar to the Yangtze Three Gorges issue. He wanted to track, monitor, and in case of safety or international law violation, control ships in a certain hazardous river “chokepoint.

The commander was very impressed with our live demonstration …. most of the attendees at the show were merely selling brochures and Power Points of what their systems would and could do if the government just coughed up bucks) but when I got down to brass tacks about how the system could be implemented he lost interest.

Too expensive? Hardly, the systems were (and still are) very cheap for the work they do .. costing on the order of say two or three days of fuel costs for a ship. Much less than the food bill for the crew for a month. But the “Coastie”, could only think of the tremendous overhead of having a law passed that would mandate all ship owners (many non-US owners) to buy one specific box to transit the problem waters.

How simple it would be and how much cheaper it would be to just provision the Coast Guard (who stops and inspects all ships entering these waters) with ‘loaner’ GPS units for that portion of the voyage and collect them at the other end. (the units wouldn’t go missing, they track themselves, remember?).

Know why the idea will never fly? It will always fail because it would involve the US government actually performing a function that served someone .. rather than imposing a restriction on someone.

Read that Yangtze article again and then ask yourself (and, perhaps your Congress-critter), what has government done _for_ business rather than _to_ business?

How many remember grandpa with his quaint saying, “No sense locking the barn after the horse is stolen”? Well, perhaps the own of this Ford dealership and some other folks with high value items will, in the future.

The dealership undoubtedly has millions invested in their property and physical plant. An they have x number of $51,000 pickups on the lot, subject to theft 7/25/365. (ooops, my bad, they have the quantity x-1 pickups right now, don’t they?
Somebody sold them a fortune in surveillance cameras because .. well because everybody has them. But now they can’t very well ask the camera to track the truck, can they? (Come to think of it, just how obscene is it to have a Ford pickup with a price tag of $51,000, hmm, Ooops, never mind, got off track there).

There are GPS Tracking units buiolt exactly for the needs of new car and truck dealers. I sell them, many others do too. If the dealer had invested less than $600, one time per hi-value truck, the thief would be enjoying the hospitality of the Miami-Dade County jail as I type this. And the $600 wouldn’t be wasted, when the truck was sold and being prepared for delivery the dealer could take his GPS tracker off the truck and hang on to it for the next delivery. Or, he could lease the GPS tracking units for about a buck and a quarter a day for two years and then own them out right. It would not be initial or operating costs that would make a smart manager decide against GPS Tracking.

Or, here’s a thought, he could sell it to the truck’s purchaser for say, $800 and made a nice profit on I guarantee the stereo in that truck cost more than a business management GPS tracking unit and would do a lot less for the purchaser’s bottom line.

Ever wonder why car dealers are always crying poor mouth? perhaps because when it came to the class on business sense and how to calculate ROI (Return On Investment) they were day dreaming, thinking of $1200 undercoat jobs and $95 oil changes.

Go figure.

(Story continues here)

Well, this one woke me up this afternoon. That’s a LOT of miles. Mater of fact that’s more than half the top-performer mileages for a lot of over the road truckers.

What will the investigation show? Well I guess the safest thing to say if that Paulie Gaultieri (you know, Paulie Walnuts from the Sopranos?) has to work weeks sometimes to make 34 large, but this lady did it in one expense report.

When managers think about GPS Tracking they mostly think about the “motor pool” sort of things … excess idling, getting the vehicles in for service on time … honorable but greasy finger nails sorts of things.

But front office management is always impressed when they actually take GPS tracking for a test drive. I have yet to find a government agency or a commercial fleet where drives aren’t cheating. Sad but true, and if you don’t beleive me, just challenge me to a tryout.

The real joke in the Pennsylvania saga above is that this employee claimed she ran up all those miles running children to doctors and court appearances. Friends, have you ever take a child to the doctor or worse yet, a custody hearing? If you have I know you can spell ‘dead ass’ … I mean talk about boredom and delay?

71,733 at a generous 45 mph average is more than 1500 hours behind the wheel, The normal public employee work week is only 2080 hours. You mean to tell me that she did all that doctor’s office and court waiting, plus vacation, sick leave, personal days off, etc, etc in the less than 500 hours a year she wasn’t in her car?

If ya do, stop by tomorrow, as soon as I blast a hole for the sign post I’ll have my ocean front property in Arizona up for sale.