How Modern Technology Can Save Costs on the Job

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Discover how modern technology is transforming the construction industry! In this episode of Contractor Success Forum, Wade Carpenter and Stephen Brown discuss real-world case studies that showcase the benefits of implementing technology on job sites. From cost savings to increased efficiency, learn how you can leverage these tools to improve your business. Don’t miss out – watch now and join the conversation!

Topics we discuss in this episode include:

  • 00:30 – Benefits of Modern Technology
  • 01:00 – GPS and Automation Case Study
  • 01:30 – Asset Management Technology
  • 02:00 – Cost Savings with Technology
  • 02:30 – ROI of Technology Investment
  • 03:00 – Improving Efficiency with Technology
  • 03:30 – Safety Benefits of Technology
  • 04:00 – Theft Reduction with GPS Tracking
  • 04:30 – World Trade Center Cleanup Case Study
  • 05:00 – Deep Dive into Technology Types
  • 05:30 – Real Time Location Tracking
  • 06:00 – Proactive Maintenance Benefits
  • 06:30 – Route Optimization and Fuel Savings
  • 07:00 – Safety Alerts and Compliance Monitoring
  • 07:30 – Cost Benefit Analysis
  • 08:00 – GPS and 3D Control Systems
  • 08:30 – Autonomous Construction Vehicles
  • 09:00 – Drones for Site Surveys
  • 09:30 – Time Tracking Technology
  • 10:00 – Video and Camera Systems on Job Sites
  • 10:30 – ROI on Equipment Investment

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Wade Carpenter, CPA, CGMA | CarpenterCPAs.com
Stephen Brown, Bonding Expert | SuretyAnswers.com

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TRANSCRIPT

[00:00:00] Wade Carpenter: Are you looking to save time and increase efficiency on your job sites? Struggling to keep up with the latest technology trends? Modern technology might be the solution you’ve been searching for.

Come on in, let’s talk about it.

This is the Contractor Success Forum. I’m Wade Carpenter with Carpenter Company CPAs. With me as always, Stephen Brown with McDaniel Whitley Bonding and Insurance. Stephen, are you seeing contractors using this new technology and finding cost savings or other benefits on their jobs?

[00:00:26] Stephen Brown: Oh, absolutely. And it’s just blowing my mind what everybody’s doing right now. It’s very exciting stuff to me. Wade, I know you’ve done a lot of research on this topic because a lot of your customers and clients are saying, how do I figure out the cost to implement this technology versus the benefit of it?

You were telling me about one of your new young clients that was absolutely developing a reputation for themselves because of technology.

[00:00:54] Wade Carpenter: Yeah, sort of got interested. A new client came in and, he had a bonded job, this grading job. And he had invested in getting them all this GPS equipment, heavy equipment. I wasn’t even aware that some of this stuff existed. But the GPS and like these autonomous computer programs that can actually run bulldozers and skid steers and excavators remotely.

And basically, he got in and got out of his job in like four days, which was supposed to take two and a half weeks. And obviously when you can do that, he underbid everybody, but he was actually able to pull it off. And so everybody was amazed at that.

And we started talking about how expensive the technology is. In his case it can be over a hundred thousand dollars to put on this GPS systems on a bulldozer, and all the technology that goes with it. But he’s telling me like, hey, I can grade something in one pass and I can do it in fewer steps. So that’s where I started getting really interested in this, and just wanted to kick around some of the case studies I found.

[00:02:01] Stephen Brown: Go ahead, Wade.

[00:02:02] Wade Carpenter: Okay. Like I said again, that was pretty interesting to me. I started going through and there’s so much to talk about with technology, and a lot of times on this program we talk about technology from the standpoint of time clocks and stuff like that, tracking your people. But they’ve taken this stuff like GPS and automation and even autonomous dump trucks that can actually move the materials without having to have somebody on site.

And so I just wanted to walk through a couple of real world case studies That I found and then talk about some of this technology. Because I know if that’s interesting me I’m guessing there’s a lot of our listeners that probably were interested in the same thing, too.

You know, there was one here that basically put in some asset management, some technology that does maintenance and tracks the maintenance safety. In that, their particular– I’m trying not to give names here, because I actually have names here. But in their case they found that it reduced their downtime by 20%. The proactive maintenance cut repair costs by 15%, and actually improved their billing accuracy by 10%. So they saved quite a bit and were able to be a lot more efficient by doing so.

How to decide on a technology purchase

[00:03:12] Stephen Brown: Wade, I’m sorry to interrupt you, but you mentioned the percent of savings they had by implementing this technology. They could only figure that out after the fact, right? How do you make a decision on this technology purchase? You may be afraid that it’s technologically obsolete. How long can I expect this technology to pay off?

[00:03:33] Wade Carpenter: Yeah that’s part of what we’re probably going to get into today because what’s the ROI? If you’re going to put $100,000 extra into a dozer or something like that, what’s the payback period? And I’ve got a few case studies. We’re going to talk about that as well.

[00:03:46] Stephen Brown: Oh, good. Okay.

[00:03:48] Wade Carpenter: I’ve got another one that, actually this was a similar project that I’ve mentioned for that young man that did that, but basically, they implemented some of this GPS tracking and automation stuff, and it was the same thing. About four days for a job that should have taken about two and a half weeks. The cost savings they tracked was $26,000 the first job, and then they also reduced the need for surveyors by 30%.

So they saved that cost as well. And what I’m understanding is some of these modern systems can actually grade something out in one pass and actually get your grade properly done and even not have to come back and have surveyors check their grades and stuff like that.

So fewer people on the job means less labor hours. It also means more safety. I mean because they’re not out there walking around this equipment. That makes sense?

[00:04:44] Stephen Brown: Absolutely. You know, You see these robotic brick placing masonry machines. You see robotic equipment on treads that literally print out the blueprint, the layout of your building on the foundation itself. It’s amazing what technology can do.

[00:05:01] Wade Carpenter: Yeah, and I know we recently did one on theft on the job site. So this is probably timely.

We had another case study where they put GPS and some of this extra tracking on the equipment, and in this particular case they noticed that it reduced the insurance premiums by 20 percent, they recovered stolen equipment worth about $50,000 in this case study.

And they say improved their resource allocation efficiency by 25 percent, which means– and again, I’m jumping ahead, but if you’ve got a fleet of bulldozers and you’ve got to have them out on different jobs, and you only need them part of the time, can you be more efficient and get them to the jobs?

Because any time those bulldozers or that heavy equipment is sitting idle, it’s costing you money. And when it’s running, that’s when you’re actually making the money.

So again, getting better control over your assets, the savings and costs as well as security is another thing that I was just pointing out.

[00:06:01] Stephen Brown: Absolutely.

[00:06:02] Wade Carpenter: Last case study and then we’ll dive into a little more detail here. But they actually use some of this technology when they had the World Trade Center cleanup after 9/11. They were having to haul away all this debris and stuff like that. And so by putting this technology and the remote monitoring, some of that in place, they basically reduced the project completion time by 30 percent is what they calculated.

And I’m not sure how they figured this one, but they said they improved the safety compliance by 40%. That’s more of a larger scale job, but It was pretty amazing to see some of these case studies that come together.

So if that’s okay. I just wanted to take a little deeper dive into some of this technology, and again, I tried to pull out some statistics when I could. You start looking into some of this stuff and some of this is from the equipment manufacturers, and obviously they want to point out the, the benefits of their products and those kind of things but from what I’m hearing in some of the case studies, a lot of it seems to be true.

So if you’re going to put all that money in, what does it take to pay yourself back?

[00:07:11] Stephen Brown: Just think about the technology and construction from when the first steam equipment, earth moving equipment, came about. We have some customers that were doing work up and down the levee system in the Mississippi River that were literally inventing and building steam equipment to move the earth.

Can you imagine, what a game changer a bulldozer was? And now, all these years later, and what was implemented in 9/11, state of the art construction processes are standard for the best companies. And if you’re not doing it, if you’re not embracing it it’s past the time to do it, it’s costing you money.

[00:07:47] Wade Carpenter: Now I want to go into, and some of these things I’m just hitting my case studies.

Tracking technology can reduce idle time

[00:07:51] Wade Carpenter: One study showed that they had this real time location tracking. Reduced idle time by about 15 percent. And also what they refer to the geofencing or basically tracking them, they did a study of reduced unauthorized use by 25 percent.

And just trying to think about all the savings, like, what are you gonna put into this versus what benefits you can get out of it? And sometimes you have to think about some of the things these things actually do.

Technology can reduce repair costs and expand equipment lifespan

[00:08:15] Wade Carpenter: But another thing they were talking about was this proactive maintenance based on engine hours. In one study, the proactive maintenance reduced repair costs by 20 percent and extended equipment lifespan by 10%. And again, I found my case studies on this. I have no idea whether a vendor was putting these together, but–

[00:08:38] Stephen Brown: No, I don’t, I think your information is fairly accurate. As an insurance agent, I see these statistics all the time about how technology’s helping. For example, telematics systems for drivers is is saving contractors money on their insurance. And dash cams now have AI built into them.

They literally can and do give feedback to the driver. It warns them if they’re not paying attention, if someone’s stepping out in front of them, they’re about to hit them, if they’re tailgating someone. It just gives them a warning. And a lot of folks say, well, you know, my folks wouldn’t have this. Because some of these dash cams even have reverse cameras where it monitors the face and action of the driver.

 That sounds creepy, doesn’t it? Maybe not if you’re training a driver. But, these AI, cams that you can monitor are now so inexpensive and so technologically advanced, that there’s just no reason not to put them on your vehicles and your equipment.

And from an insurance standpoint, Wade, if you have this in place, it’s so much easier to prove that you weren’t at fault when something happened. I think specifically of a subcontractor that moved a forklift at night that they had borrowed on a job site. And they moved it out where the forks were literally sitting out in the street and a guy riding his bike at midnight hit those forks and had some severe neck and head injuries because of it. That subcontractor swore that they had not operated the equipment. And luckily there was a camera across the street that proved that they were operating that equipment. So the claim was big enough to max out that subcontractor’s insurance policy, plus a good chunk of my client’s.

Technology can help you reduce fuel consumption

[00:10:21] Wade Carpenter: It’s amazing. And you also led into the next one I was going to mention.

The savings also there’s in, in the study that’s talking about route optimization. Basically reduced fuel consumption by 10 percent and real time tracking improved operational efficiency by 15%.

And they were also talking about fuel consumption in the context of monitoring how long a piece of equipment is sitting idle and shutting it off remotely. Things like that to save fuel.

[00:10:49] Stephen Brown: And also for enforcing, the rules that you have over your company vehicles. That technology lets you do that. Folks taking a dump truck, leaving it running in a parking lot while they duck in a convenience store to grab something, that’s against every company rule there ever was.

[00:11:05] Wade Carpenter: Guess I can see why.

[00:11:06] Stephen Brown: Being able to know when that happens in real time, getting alerts about it, is a huge way to protect yourself.

Technology can reduce safety incidents and increase regulatory compliance

[00:11:14] Wade Carpenter: That leads into some of the other things, safety alerts, reduced incidents by 20%, compliance monitoring, improved regulation, regulator adherence by 30%. So that’s another benefit there.

The cost benefits of using technology in your construction business

[00:11:27] Wade Carpenter: But getting back into the cost benefit of this. This particular case study found that average fuel cost reduction of 12%, labor cost reduction of 15%, maintenance cost reduction of 14%. And as we already mentioned that particular case, we also see some increased revenue because we can complete projects faster and allow companies to take on 10 percent more projects annually.

Again, I’ve got all these different case studies, but there’s so much of this technology that I didn’t know existed. There’s GPS and 3D control systems where they’re precise grading, contouring, roads, you had already mentioned, I think, bricklaying. And, sometimes concrete pouring can be done remotely. And I’ve seen some of these autonomous things essentially 3D printing concrete buildings now, and some of that technology is really coming into play.

 There was another project, this one I was talking about here with this highway project, they supposedly completed it 60 percent faster and had significant cost savings. I don’t have a number on those cost savings, but, they apparently have autonomous construction bulldozers and excavators. And we saw some case studies on that.

But, in this study they were talking about 50 percent improvement in productivity and a 20 percent labor cost savings. I feel like I’m running through all these different case studies and a lot of them sound redundant, but–

[00:12:53] Stephen Brown: No they don’t. Just over and over again, Wade, you’re just showing the practical numbers of implementing technology. And once you implement the technology, there’s no going back from it. You either love it or you hate it. And I can just say that there’s just some things that if you’re not doing now you have to be doing, or you won’t be able to stay in business.

[00:13:13] Wade Carpenter: And again, one other case study I was going to throw out there: using drones for site surveys and some of those kind of things. And basically what they’re seeing, I think a lot of our contractors know that, it’s saving survey time reduced by 75%, and then they have the cost savings of labor and equipment. I think drones are being used more and more.

[00:13:33] Stephen Brown: Absolutely. I had a client send me drone footage of the progress of one of their construction projects that I was able to enjoy and send on to their bond underwriters. They were thrilled to get that information.

Technology can improve payroll accuracy and reduce administrative costs

[00:13:45] Wade Carpenter: A lot of what I was looking at had stuff to do with GPS tracking and those kind of things, and I also brought up the geofencing and geotracking. And a lot of these timecard software now can, obviously you can put it on people’s phones, and a lot of people don’t want it. I’ve had some contractors trying that.

But when they have put some of these things in place, what they’re seeing is automated time tracking improved payroll accuracy and reduced administrative costs by 30%. And then in this particular case, I was looking at the time logs, decreased payroll discrepancies, or time card padding or whatever you want to call it, saving up to 10 percent labor costs. It’s not just equipment, but there’s a lot of things that are going on. And people ask me about things like the time tracking all the time.

[00:14:33] Stephen Brown: Yeah, Wade, That’s something you deal with every day. You remember one of the guests we had on our podcast, literally out of frustration developed a video and camera system on the job site with real time stamping that showed the work that was done and completed. It really helped when there was an argument about the installation process or something had been done properly, so they didn’t have to go back and tear something up and rebuild it.

And it also was proof of certain change orders being completed for that contractor to protect themselves.

[00:15:06] Wade Carpenter: Yeah, it’s amazing what you can do with that. And I know that was almost three years ago now. And a lot of these construction software or these add on software products that tag onto QuickBooks Online or something like that for contractors, they actually build stuff like that into them, where they can upload the pictures.

But the problem is, you’ve got to force the people on the job site to do them. If they don’t do them, having the technology does no good. So that’s another thought on putting this stuff in place. But like I said, I think just wanted to hit the high notes today. And I feel like I threw case studies out, but you know, you do really need to do your due diligence on this stuff.

And I thought I had pulled out, but apparently I don’t have in front of me, the ROI on, say, $100,000 invested into a new bulldozer, or you can retrofit some of the older equipment with this stuff. And they were seeing some of the payback periods can be, as little as six months to a year, and sometimes it’s more than a year. But it depends on how much that equipment’s being used and , how you’re making the best use of it.

[00:16:14] Stephen Brown: You’re right. Time is money and your reputation is everything. So what a great story of this, young man who built up his business, invested in the technology, and is just rocking it out there right now.

[00:16:29] Wade Carpenter: Yeah, I’m sure if you go to any of the trade shows in the utility contracting industry the equipment people are right there wanting to tell you about it.

If you’ve got any thoughts or feedback on what we discussed today, we’re always happy to answer your questions. If you’ve seen some cost savings by implementing some of these things, just drop them in the comments. We’d love to see it.

Thank you for listening to the Contractor Success Forum., check out more information at Contractorsuccessforum. com or on the Carpenter CPA YouTube channel for more information. We’d appreciate it if you’d consider liking, subscribing and follow us every week as we post a new episode, and we will look forward to seeing you on the next show.

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