RFID Strategy -- Enterprise, Know Thyself: Cost-Efficient RFID Asset Management

Jan. 22, 2007
Keeps tabs on the tools of every trade.

RFID technology has been in the spotlight for its use in tracking items as they flow from manufacturing sites, through distribution centers, onto trucks and onto the retail floor.

But what about assets that don't go out the door? Whether it's a drill bit, an engine hoist or a piece of medical testing equipment, an enterprise needs to know where it is, who's using it and when its service life expires.

Any item used in a work process is eligible for intelligent asset management with RFID. And the ROI can be substantial.

Valuable Assets, Valuable Data

By tagging assets with RFID labels and hardened asset tags that can be identified by readers at key points in a work site, an organization can track more items in more locations with more accuracy than with paper-based or even bar code systems. That means more useful data about when, where, and by whom assets are used.

Are consumables being used at too fast a rate? Before RFID, you might know you were spending too much, but now you can pinpoint the inefficiency. Are tools being misplaced, or hoarded by employees? With RFID, you can identify the wasteful patterns and design ways to correct them. Is safety equipment being used properly? An RFID system can alert managers when it's time for refresher training.

In just about any setting, RFID is a powerful solution. With stationary and mobile readers installed throughout a facility, RFID is always on -- freeing up personnel for more critical tasks. An enterprise-class WiFi network can establish a seamless link between RFID and an enterprise's IT architecture, minimizing data entry lag time, human errors and infrastructure costs.

Since an asset management system is completely internal, it can take whatever form the user wants -- unlike a supply chain management system, which requires coordination with suppliers and customers.

Benefits For Almost Every Industry

"Indirect materials," such as tools, are crucial components of the manufacturing process. A plant's tool or parts crib is often a hub of activity -- but without RFID, the process is often monitored manually and items aren't always checked in or out properly.

An RFID toolcrib installation helped Portland, Ore.-based Bassett Industrial Supply, Inc. take longtime customer Wah Chang, headquartered in nearby Albany, to the next level in asset management. The specialty metals producer's stockroom was manned during only one shift; at other times, employees needed supervisors to gain access. There wasn't enough data on which departments were using which items, so accurate budgeting was impossible.

In partnership with WinWare, Bassett implemented an automated RFID portal system that includes employee identification for access control purposes. According to Bassett vice president John Lottis, the results have been dramatic: use of consumables such as gloves and batteries is down; each tool's repair history can be tracked; more than 25 departments share the cost of materials according to their actual usage; and the "always-open" stockroom makes everyone more efficient.

The Wah Chang implementation "bags and tags" small items with reusable RFID tags, and Bassett has found the durability of the tags to be "phenomenal" -- the system began in June 2005 with an initial supply of 5,000, and they haven't had to order more.

Building and maintaining aircraft requires particularly high-value "indirect materials," and losing track of these can hit the bottom line hard. RFID asset management can also help the aerospace industry observe a critical safety requirement: the Foreign Object Detection (FOD) zone around an aircraft undergoing construction or maintenance. A single item left in the wrong place inside an aircraft could spell disaster during operation -- but RFID provides an accurate, reliable way to make sure that every item that enters the FOD zone also leaves it.

Professional Workplaces
Wrenches and drills aren't the only tools that keep enterprises running. Laptops and servers are just as critical to the head office, and they can be tagged as well. Motorola has used its own RFID products at its Holtsville, N.Y. headquarters to track scanners and other equipment, saving an estimated 10 to 17 labor hours a week and savings in excess of $200,000.

Supply Chain Assets
Weren't we talking about things that aren't part of the external supply chain? Perhaps -- but if you operate one, you rely on a lot of internal assets. Warehouse forklifts and airline luggage pods can be saved from loss, and sent where they're needed, with RFID. In post offices in Spain, RFID tracks the metal cages that carry mail within facilities. These cages cost between $2,000 and $5,000 empty, and before RFID about 20,000 cages, were being lost each year -- some with mail inside them.

Partnerships And New Technology Make RFID Asset Management Work

RFID technology is a better fit for asset management than ever before. A new generation of tags and readers offers enhanced data capacity, greater read distance and reliable function on metal surfaces. RFID tags are coming down in cost as well.

More powerful wireless LAN networks and IT equipment complement the growth of RFID. Mobile and wearable readers and rugged portable computers take RFID-enabled data capture into any workplace.

The technology is only effective, however, when it is supported by solutions that can manage and generate value from the RFID data. This requires an intimate knowledge of the work processes that the data is describing. The enterprise using RFID needs to achieve buy-in across the organization, since an RFID based asset management system requires both managers and workers to willingly modify existing processes for maximum benefit.

In the end, no business can prosper without a clear picture of where its assets are and how they're being used. Traditional methods of securing asset information were seldom cost-efficient. As a result, many businesses gave up trying to see the complete picture, learning to live with a certain level of loss and inefficiency. With RFID, the new capabilities of asset management are re-writing the ROI arithmetic -- and various businesses are getting their first real visibility into exactly what goes on within their walls.

Philip Lazo is vice president and general manager of the RFID division in Motorola's Enterprise Mobility Business. Motorola (formerly Symbol Technologies, Inc.) delivers products and solutions that capture, move and manage information in real time to and from the point of business activity. Motorola's enterprise mobility solutions integrate advanced data capture products, radio frequency identification technology, mobile computing platforms, wireless infrastructure, mobility software and world-class services programs. Symbol Technologies Inc.

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