[PROPERTY MANAGEMENT EVALUATION] | An in-depth analysis and evaluation of current property management policies, procedures, and customs at NXF. Contains research on feasibility of implementing a Radio Frequency Identification (RFID) property management solution. |
Letter of Transmittal
TO: Elon Musk, Director, National X Foundation July 2nd, 2012
FROM: John Bell, Project Lead, MS/NFX
SUBJECT: Risk factors and inefficiencies in the Property Management
Dear Mr. Musk,
Below you will find the evaluation of the feasibility of implementing a RFID property management solution to improve inventory management, property visibility and property accountability. While analyzing the annual inventory data from FY12 MS found that NXF had over 10,000 shortages and overages last fiscal year. Through our interview process we were able to determine that the majority of the shortages were due to errors in the labor intensive physical inventory that cost NXF $1.6M annually. These errors are reconciled in the last quarter of the FY by the Center PCOs but the corrections are not updated in the database until the second quarter of the following FY. This leads to inaccurate reporting during the EOY debrief with the executive officers. We also determined that all of the overages located during the inventory were accurate. These overages are due to poor policy implementation and gaps in the current property management five (5) phase processes, most specifically in the receiving phase.
MS has concluded that transitioning to a RFID property management system along with reengineering the receiving process would yield a positive economic benefit and business case for NXF. The potential cost savings would be in the range of $16.1M spread over the next ten (10) years.