Trends Report

The ROI Of RFID For Asset Tracking

A Total Economic Impact™ Analysis Uncovers Big Benefits When Minimal Inventory Controls Are In Place

July 29th, 2008
PC
Patrick Connaughton
RW
Roy Wildeman
With contributors:
Sharyn Leaver , Jon Erickson , Varun Sedov

Summary

Asset tracking using active Wi-Fi-enabled RFID tags is getting more interest these days. Why? For one, even with the high cost of tags, there's actually a clear ROI in sight for these investments. To illustrate this, we created two conservative ROI models profiling sample companies tagging more than 1,000 assets in a three-year period. The first sample company is a parts supplier to auto OEMs tracking reusable containers. The second is a hospital tracking mobile equipment. The biggest differences between the two scenarios were the number of inventory audits currently being performed and the amount of time it took staff to locate the asset when they needed to use it. The result: For the highly controlled parts manufacturer, an estimated 9% ROI. However, for the hospital with limited preexisting controls and staff that spend an inordinate amount of time searching for assets, the estimated return jumps way up to 69% ROI with cumulative benefits of more than a million dollars. Plus, future rewards like using the data to analyze and improve process flows are just as exciting.

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