How Satellite Tracking Systems Can Both Save and Make Money

March 9, 2010
By being able to remotely record and monitor usage, manufacturers can determine if their equipment was used as it was intended.

An ongoing problem faced across multiple industries is that many original equipment manufacturers (OEMs) are forced to pay on customer warranty claims against their equipment even though such malfunctions are often the result of improper use. Though some companies contest these accusations, the debates typically turn into a "he said, she said," where most OEMs lose in the long run because the claimant is usually the only witness to the events in question.

Often, manufacturers also find it necessary to settle such claims quickly as litigation costs and liability exposure in protesting these disputes is typically more expensive and resource consuming than simply paying the customer. As a result, manufacturers are left struggling with even slimmer profit margins and precarious bottom lines.

Satellite Technology to the Rescue

To reduce these occurrences, companies should consider leveraging the benefits of Machine-to-Machine (M2M) technology. With single or dual mode satellite/terrestrial modems as a standard feature for all their product lines, companies can track, monitor and even control their offerings and assets anywhere in the world. By being able to remotely record and monitor usage, manufacturers can determine if their equipment was used as it was intended, or if the customer claimed damage was the result of improper use or care over time; all without the need for in-field inspectors or the sole word of the purchaser or lessee.

Recent enhancements to the Low Earth Orbit and Geosynchronous Earth Orbit satellite networks have made this option viable. Such technology allows the development of satellite communicators that transmit short bursts of data that use far less power than did their predecessors. Concurrently, the modems themselves have been greatly reduced in both size and cost. These significant changes in global communications have led many important industries to quickly introduce this new technology into their business models not only to both maintain their competitive advantages and to avoid being technologically outmaneuvered by their competitors, but also to focus on their core business without the inherent uncertainty that accompanies a legal defense.

Additionally, equipment manufacturers may also find themselves being able to provide other services to their customers, including asset tracking, condition monitoring, predictive maintenance, security, and remote control, thus creating additional revenue streams and profits by leveraging the same systems that are in place to help reduce their own operational risks. In turn, satellite modem technology offers two benefits for companies; the opportunity to lower the costs of doing businesses while also providing additional income sources.

Here's a good example. One of the largest Class-1 railroad companies in the United States purchased equipment to repair ties to their tracks with the expectation that the gear would work for a certain amount of what's called "track footage." After the embedded analog counter reported several early failures, the OEM provider installed satellite modems on the equipment to monitor usage. In doing so, the company discovered that the counter was not calculating usage correctly, and that the tie repair equipment was operating within specifications; saving the manufacturer and its customer significant time and money.

Moreover, the same manufacturer was able to offer a South Texas heavy excavation company key insights into where their operations could be improved that would otherwise have been undiscovered. Back in 2008 when diesel prices hovered around $5 per gallon, satellite monitoring systems were able to show that operators had consistently idled their back hoes for up to four out of six hours of usage. The reason, it turned out, was the employees were keeping cool in the air conditioned cabs when waiting for their work to start, and thus turning the heavy equipment machinery into one of the most expensive climate control assets the company owned. This monitoring service ensured the manufacturer was not only an even greater trusted advisor, but diverse in its income streams.

Must Haves

In order to ensure such systems will be of optimal value, satellite modem providers must be able to offer manufacturers the following features, functions and services at a minimum:

  • Cost-effectively operate in multiple environments. The modem is only as good as its transmit data, and that means seamlessly working with all the main network protocols, such as ORBCOMM, Iridium, Globalstar, GSM, CDMA and GPS.
  • Support for subscriber-based services. The modem provider must also offer turnkey services -- either directly or in partnership with systems integrators -- that provide companies the ability to offer tracking and monitoring services to their customers without building out the infrastructure themselves.
  • Proven success. The modem provider must be able to offer recent examples of how their systems have been used to reduce costs and increase revenues for a myriad of companies and operations, such as truck and rail transportation, heavy equipment, ships, fishing boats, pipelines and utility meters.

Satellite modem technology -- when effectively employed -- will be one of the key standard components in a manufacturer's product. Not only will they prevent unnecessary operational risks and costs, but also ensure that companies optimize revenue sources and profitability.

Lenny Braunstein is Legal Counsel for Quake Global, a manufacturer of network agnostic communicators for multiple satellite and terrestrial networks.

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