Infrastructure
Commentary
12/17/2004
10:39 AM
Gene Alvarez
Gene Alvarez
Commentary
50%
50%

RFID Helps Enterprises Increase Return On Assets Through Tracking

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.

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. Such applications are likely in the 2006-2008 time frame.

UHF 433-MHz tags have become of more interest as the Container Security Initiative (CSI) from The Department of Homeland Security continues to gain momentum. For example, the Port of Los Angeles has begun to test these tags for container movement and tracking. These tags are targeted to enable processing and collection of data associated with the contents of a container. We believe this will be of significant value to Homeland Security, but also will improve visibility for those enterprises that want to know where the container is in a supply chain in the 2006-2008 time frame.

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. In this case, tags that are very small can be used to insure that all items used in a medical procedure are accounted for at the end of the procedure, increasing patient safety and reducing opportunities for litigation.

Bottom line: We believe that enterprises should begin to identify RFID asset-management opportunities and pilot RFID. Moreover, by 2008/2009, we believe successful enterprises will use RFID asset management to create bottom-line shareholder value.

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