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Thursday, December 23, 2004

RFID Helps Enterprises Increase Return On Assets Through Tracking

Informationweek writes, beginning next year,more and more enterprises will look to RFID to get the most mileage and value out of assets that can't easily be tracked with bar codes. Over time, their efforts will yield operating-cost reductions and process improvements. Excerpts with slight edits and my comments added:

For enterprises seeking increased utilization and management of bar-code-challenged assets--tools, machinery, equipment, people, radio-frequency identification provides a new measure of control. RFID tags can help in situations ranging from bulky rolls of paper that can lose their bar-code labels when stored in a high-humidity environment to heating, ventilating, and air-conditioning dampers that are installed with bar codes facing a concrete structure, rendering them unreadable or unreachable for maintenance tracking. In future, enterprises will deploy RFID-tagged assets, creating operational cost reductions (e.g., reduction in missing assets) and operational improvements (e.g., reduced location times) and further, enterprises will tag more than 70% of their assets and generate operating-cost reductions of 1% to 3%. These reductions will be realized through reduction of lost assets, improved tracking of asset maintenance, and protection of assets from theft, fraud, or injury. Asset-management pilots will draw experience from successful RFID asset-tracking implementations such as the tracking of livestock, boxcars, and trucks.Three tag-frequency ranges are of interest for asset-management applications: low frequency 135-KHz tags, high-frequency 13.56-MHz tags, and UHF 433-MHz tags.
- Low-frequency 135-KHz tags are used in one of the largest RFID applications: livestock tracking. RFID lets cattle ranchers track livestock movements without having line-of-sight or perfect weather conditions, both of which are requirements for bar-code-based readings. Cattle are recorded as they move through gates, similar to the way cars are tracked as they move through electronic toll stations. These same low-frequency tags are used to protect other classes of assets.
- 135-KHz tags are in use for many card-key, access-control systems that let employees enter and exit facilities and protect automobiles from theft, as they are part of many automotive anti-theft and key-entry systems. They've also been used to track runners from start to finish in marathons and other races.
- High-frequency 13.56-MHz tags are being tested in applications such as baggage tracking (e.g., Delta Airlines) and site maintenance (e.g., Frankfurt Airport). In the case of baggage handling, the line-of-sight capabilities of bar codes do work. However, it can require more than one handler to locate the tags to scan and load baggage, which increases the overall time it takes to process baggage and increases use of human resources. Site maintenance (e.g. power, telecommunications switching, and mining facilities) has a combination of lost tags and line-of-sight limitations. In this case, bar-code labels attached to installed components such as pumps, valves, or engines can lose their stickiness over time and fall off the item being tracked, or the components and the tag can become covered with dirt and dust, hindering location of the tags. In the world of health care, 13.56-MHz tags will track key assets (e.g., wheelchairs, infusion pumps, and operating-room equipment); in addition, doctor- and patient-tracking applications are in development to enable improved service and safety levels within hospitals. For example, as a means of improving patient safety, tags could be placed on patients, letting health-care providers collect patient-identification data without having to disturb sleeping patients, or the entrances to operating rooms could be RFID-enabled to ensure that the right patient and doctor can gain access to an operating room.
Tag costs won't be the issue for asset-management pilot projects. Unlike tag costs for retailers, consumer-product-tag costs must fall below 5% of the item's costs. In this case, the asset will have a cost that is much higher, making the tag-cost"to-percentage-of-asset-cost ratio much lower and palatable to the enterprise. For example, a piece of medical equipment such as a wheelchair can cost $1,000; therefore, placing a $10 tag on the wheelchair to prevent its theft is an easy ROI calculation, since the tag cost is only 1% of the asset. In some cases, the asset may be of low value but its contents may not be; for example, money pouches used in the movement of currency in a bank or casino. Other asset-management functions that RFID can enable include the accountability of hard-to-track items such as surgical equipment in an operating environment. Successful enterprises will use RFID asset management to create bottom-line shareholder value.

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