Asset tracking
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What is asset tracking Asset tracking enables exactly what the words suggest – the tracking of assets. That’s a requirement that has existed long before the Internet of Things was even thought of. In previous generations much of the tracking of assets was achieved through the use of barcodes and scanners and that continues to this day. Scanning barcodes attached to assets is still valid and widely utilised in settings such as warehousing. Barcode scanning is starting to be replaced by RFID (radio frequency identification) which effectively replaces the adhesive barcode with a small, cheap RFID tag that can be scanned to reveal the asset’s location. However, this remains a relatively simplistic approach to asset tracking. It’s great for tracking a box of snack-food in a retailer’s warehouse and its own, wider supply chain but far less applicable for a provider of expensive plant equipment, such as a hirer of an electrical generator or the owner of an excavator. Those items shift location, experience wear and tear and have maintenance needs. A box of snacks only needs to go from the manufacturer to the distributor’s warehouse and on to the retail store. In addition, the box of snacks is worth a few dollars, while plant equipment can easily be worth hundreds of thousands of dollars. Shipping containers full of valuable items also fit into the items of high worth category that makes sense of satellite network utilisation. Asset tracking therefore isn’t confined to warehouse or supply chain management. It also isn’t the same things as fleet management, although tracking vehicles certainly is tracking of a physical asset. The reason asset tracking is different to fleet management is that fleet management involves the tracking, management and organisation of vehicle fleets. Asset tracking focuses on tracking the asset. It doesn’t plan journeys, schedule deliveries or assess the maintenance needs of vehicles, although asset tracking data feeds into all of these applications. Figure 1: Major applications
Vehicle and asset management
Driver management
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Asset tracking therefore has come to mean the global tracking of physical, typically high value, assets such as plant equipment or shipping containers, using devices which combine the GPS system and cellular and/or satellite technology. As such it is closely aligned with fleet Remote diagnostics management and telematics but it is important to recognise that Maintenance planning Security tracking asset tracking does not always relate to vehicles or transport. Asset tracking is increasingly being used in factories and hospitals to track equipment through a site. Driving data registration & analytics
• • Eco-driving schemes • Insurance risk management
Operations management
• Routing and navigation • Transport management • Mobile workforce management
Supply chain management
• Cargo management • Inventory management
Regulatory compliance and reporting Source Berg Insight
• Drivers’ working hours • Digital tachography data download • Tax and toll collection
In addition, asset tracking is being utilised to track employees and contribute to organisations’ health and safety initiatives, particularly in regard to lone worker safety and workforces in hazardous locations. To demonstrate the breadth of applications, one provider has even used an asset tracking system to track sheep, geofencing animals worth hundreds or even thousands of dollars within a defined perimeter. The blurring of the boundaries between vehicles, shipping containers, plant, people and even livestock means asset tracking is often spoken of under the banner of fleet management, asset management and real-time location systems (RTLS). It’s not incorrect to describe elements of asset tracking by these terms but it has created some confusion in the market place when asset tracking is mentioned.
Asset tracking Areyouontherighttrack
Technical challenges Having self-contained GPS and other types of wireless enabled terminals or units is a vital aspect for applications such as tracking shipping containers. Some ships have power hook ups to enable chilling of container contents but many do not and each container transitions from ship to docks to road haulage so having a self-contained power supply is a critical feature. It also enables the tracking equipment to be installed and not thought about further. For example, an asset tracker installed onto an item of plant equipment, such as an excavator at a construction site, should not rely on the power source of the equipment because the equipment could remain unused in a yard or at a location for many days. In that scenario, the owner still needs to know where the item is so the tracking functionality needs to be always on and not reliant on either being plugged in to a power source by a worker or drawing power from the asset it is attached to. The frequency with which the position of the asset needs to be known or available also influences the quality, size or type of GPS asset tracker required. It has been common for asset tracking devices to fail where cellular signal is unavailable, hence the need for multiple types of wireless connectivity, depending on the application. Early deployments have seen interrupted or failed tracking of assets because of Faraday cage effects that left tracking devices unable to communicate. This is still a problem in urban canyons where skyscrapers prevent wireless signals reaching asset trackers. However, modern wireless technology has now seen advances in signal transmission that allows enough signal strength to reach the GPS satellite system which can then be reported via GPRS or alternative wireless links to terrestrial networks. Nevertheless alternate wireless technologies are all utilised to some extent and regulatory authorities are starting to consider apportioning spectrum for asset tracking applications to use, separately from mobile phone operators’ cellular spectrum.
Why is asset tracking necessary? Businesses of all types across the world lose track of large amounts of valuable property because of theft, damage or loss. In addition, they suffer the knock-on effects in terms of employee downtime, lost productivity and loss of opportunity in terms of peak retail times, for example. Lost assets could involve machinery, critical tools or parts, containers and metals, particularly copper which is regularly stolen from utility The global fleet & asset management companies and construction sites. The theft, loss or market by sebment (World 2012-2018) failure of equipment has a direct impact on a Commerical vehicles company’s operational efficiency, increasing the Construction equipment & agriculture machinery number of lost working hours or unplanned asset Cargo containers & trailers downtime. Enterprises could be forced to hire alternative equipment at additional cost, for example. They may also incur raised insurance premiums because of lost or stolen equipment.
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Research from insurance group Allianz Cornhill found that in 2012 US$110 million of equipment was stolen from construction sites in the UK. Total costs associated with hiring or buying replacement equipment and loss of business totalled more than US$1.25bn per year.
Asset tracking Areyouontherighttrack
Being able to track machinery, equipment, materials or plant on the move, means enterprises are more likely to recover lost or stolen goods, reducing insurance costs. In the case of shipping valuable or hazardous material, they can provide an audit trail as well as identifying shipping conditions such as extremes of temperature, vibration or impact that may affect their viability. Figure 1 above shows that the tracking of machinery and equipment represents only a small percentage of the total asset tracking and fleet management market. Deployment considerations As the Internet of Things/M2M market has developed, there is heightened awareness of asset tracking across verticals including manufacturing, logistics, defence, construction, retail, healthcare and utilities. Technological advances in terms of coverage and better integration of asset tracking into other business systems have strengthened the business case by increasing the value offered and decreasing the costs involved. A stronger business case for asset tracking has therefore emerged but deployment still has costs and a return on investment must be established. Organisations need to consider the capital and operational costs involved with the devices and network connectivity required to enable asset tracking. In some situations such business cases are easy to construct. For instance, the capital and operational costs can readily be calculated as offsetting the losses involved with damaged or stolen equipment. However, in other business cases the benefits are less immediately apparent and may require more work to identify. For example, measuring increased productivity or asset utilisation, reduced delay across a supply chain and increased customer satisfaction can be intangible. Without doubt, they create business value but a clear reason to invest in asset tracking is required. Some of that can be achieved through recent advances in integration of asset tracking with other systems. The market has moved on from standalone systems operating in isolation from each other and this is to the advantage of asset tracking deployments. Integration with other systems such as fleet management, supply chain management and many others, multiplies the value that asset tracking solutions can deliver. This integration is resulting the line between asset tracking and other M2M applications blurring. The applications become part of a more holistic wider landscape as remote monitoring and control, supply chain automation, connected products and fleet management come together. A further improvement that helps asset tracking demonstrate its value is improved network coverage over large geographies. The ability to switch to the most appropriate and cost effective network technology as the asset moves brings down the cost and means the ideal of asset tracking being always-on can be achieved. Finally, awareness of asset tracking means asset tracking hardware is now being built-in to equipment, vehicles and containers rather than being retrofitted. This reduces the costs of deployment because the hardware is integrated and less specialist support skills are required as a consequence.
Asset tracking Areyouontherighttrack
Market competition Partly because of the blurring of the boundaries between asset tracking and adjacent sectors, fleet management in particular, there are a wide set of providers offering asset tracking or closely-related services. These can be broadly segmented into three types of provider.
Telecoms operators Many of the larger mobile operators offer asset tracking as part of their wider M2M services offerings. Providers include Verizon, Vodafone, Sprint and many others. Such providers have either acquired or developed an asset tracking platform and partner with satellite providers and other operators to ensure global coverage. Significantly such providers often bring the propositions of specialist asset tracking providers to market. In addition, telecoms operators support the propositions of other by making GPRS and other cellular networks available.
Device makers Device makers either from the computing or mobile market claim to offer asset tracking. Many of these are consumer related offerings and extend from the provision of GPS-based navigation services offered by companies such as TomTom or Garmin. Blackberry has an asset tracking offering in the enterprise market and satellite navigation and fleet management companies are targeting their hardware at supporting asset tracking.
Asset tracking specialists These companies typically offer a range of IoT services but many have addressed asset tracking for years, extending back before the concept of M2M, let alone IoT, was developed. These players, such as Kore, Numerex, Telit and Wyless have global platforms and relationships with equipment manufacturers and large, global enterprises.
Satellite network providers As obvious enablers of asset tracking satellite network owners have a role to play. Providers including Inmarsat, Iridium and Orbcomm have offerings but also make their capacity available to support offerings by all other types of asset tracking provider.
Asset tracking Areyouontherighttrack
Vehicle and equipment makers The vehicle manufacturers have begun to take an interest, albeit often in partnership with the specialist companies. Within the last year Telogis has announced arrangements with Volvo for Volvo Link, Ford for Ford Crew Chief, GM for OnStar for Fleets, Hino Trucks for Hino INSIGHT, and Mack for Mack Fleet Management Services. Daimler Virtual Technician, a remote diagnostics solution offered in North America, is provided by Zonar Systems.
Vendor challenges and market predictions As can be seen from the above, there are a large number of organisations with different levels of capability targeting the asset tracking market. Some go to market in partnership and in general terms, it’s fair to say there isn’t a one-stop-shop, although most providers package up all the necessary elements to provide a complete offering to their customers. Without a clear type of provider emerging as a leader in asset tracking, every vendor is faced with the challenge of explaining why their approach, platform and offering is most suitable for the deployment type. The specialist providers are up against global telecoms operators promising a complete bundle of M2M services and enterprises often want to minimise the number of vendors they interact with. However, where the requirements are complex, specialist input and advice that is confined to specialist companies is required. In addition, many of the big brand services are supported by specialist companies – beneath the branding wrap anyway. Relationships between asset tracking specialists, mobile and satellite providers are at the heart of efficient asset tracking for complex and high value applications. Each type of organisation will have a role to play but the emergence of large brands as channels for specialist technology and service providers may see specialists limited in terms of the direct sales they can achieve in future. What is clear is that barriers to specifying asset tracking are lowering. The cost of hardware and network capacity has decreased and the return on investment offered by asset tracking is more widely understood. Some of the statistics in the next section illustrate the growth trajectory the market is on. Critically, this is a nascent market, the surface of which has only been scratched to date.
Asset tracking Areyouontherighttrack
Market data – Machina Research believes that at the end of 2013 there were approximately 11 million fleet management connected devices worldwide – including asset tracking. By 2023 the firm expects that to grow to 60 million, plus another 10 million vehicles connected via a factory-fit connection. In revenue terms, it will grow from US$2.9 billion to US$11.7 billion in the same period. – Berg Insight reports there is an installed base over 330 million assets in fleet management & asset tracking worldwide. Around 26 million of these are estimated to be equipped with active telematics solutions with back office software access, representing a total penetration of 8.0 percent. The active installed base will grow at a compound annual growth rate of 20.2% to reach close to 70 million units by 2018. – The global Real Time Location Systems (RTLS) market generated revenue of around US$2.3 billion in 2014 and is estimated to reach US$7 billion by 2020, according to research firm IndustryARC. A consistent drop in prices of RTLS has increased penetration in APAC countries, growing adoption in manufacturing and enterprise segments especially in growing end user application areas such as sports, retail and livestock management are the key contributors for the market growth, the firm says. – Berg Insight estimates that the installed base of remote tracking systems with GPRS or satellite communication capabilities for trailers and cargo containers will grow at a compound annual growth rate of 22.3% from 1.5 million units at the end of 2013 to 4.1 million units worldwide by 2018. – The Active RFID RTLS market can be further segmented into based on type of technology utilised. Wi-Fi is the largest market with $961 million in revenue in 2014 followed by GPS RTLS, reports IndustryARC. Ultra Wide Band (UWB) RTLS is forecast to exhibit the fastest growth, according to the report by IndustryARC, due to the growing use for personnel tracking and asset tracking. - Berg Insight reports that trailers and swap bodies accounted for 80% of the total installed base of tracking units on trailers and cargo containers at the end of 2013. Growing at a compound annual growth rate of 14.7%, trailers and swap bodies will remain the largest segment at the end of the forecast period with an installed base of 2.4 million telematics devices. – Asset/Inventory tracking is the most dominant end use application of RTLS products with a total market size of $797 million in 2014, reports IndustryARC. Personnel tracking application is the fastest growing application with a market size of $281.3 million in 2014 and estimated to grow at a CAGR of 29.7% through to 2020. This is primarily because personnel tracking application is currently being used to improve safety and security of employees who work in hazardous and risk prone environments like mines, petrochemical industries and in construction industries. – The logistics market currently holds the highest market share of 32% in 2014 due to customer demand for asset tracking and growing demand for GPS tracking of shipments, reports IndustryARC. The manufacturing industry however is the fastest growing segment, especially in the APAC region where automation is increasingly being adopted across factories.
Asset tracking Areyouontherighttrack