Rfid Asset Tracking Cost Benefit Analysis
COST‐BENEFIT ANALYSIS OF AN RFID ASSET TRACKING SYSTEM
INTRODUCTION
This paper outlines the cost‐benefit analysis of using Ultra High Frequency (UHF) Radio Frequency Identification (RFID) technology in an asset‐tracking application. To facilitate the analysis, RFID will be compared against the incumbent technology, bar‐coding. An experiment comparing these two technologies was conducted, and the findings from this experiment are further analysed.
Security
Search for missing items
Annual Stock take
Deploy, repair, relocate, refresh and return Figure 1: Hierarchy of Needs for Asset Tracking
Number of Assets 10,000 20,000 50,000 100,000 Number of Reads per Asset per Year 14.11 14.57 16.06 18.71 Annual Labour Cost for Barcode $12,721.70 $26,273.45 $72,398.94 $168,700.81 Annual Labour Cost for RFID $1,361.96 $2,812.79 $7,750.90 $18,060.81 Annual Cost Benefit $15,064.00 $23,685.80 $65,254.07 $150,640.00
Table 1: Annual Cost Benefit compared to number of assets
Table 1 lists the annual labour cost savings when comparing bar coding to RFID processes. For an organization with 100,000 assets, the annual labour cost savings exceed $150,000. This cost saving carries forward (future years) into perpetuity.
EXPERIMENTAL METHODOLOGY
The purpose of this experiment is to ascertain the time (and hence cost) savings that can be achieved through the use of RFID in Asset Tracking. This experiment only focuses on operational cost savings that arise due to the day‐ to‐day work activities involved in asset tracking. As well as these definite operational cost savings, other cost savings that are present include: Improve utilization rate of existing assets Increased productivity through more accurate data recording Security and theft prevention While these cost savings are not insignificant, and can provide primary reasons for an organization to
INTRODUCTION
This paper outlines the cost‐benefit analysis of using Ultra High Frequency (UHF) Radio Frequency Identification (RFID) technology in an asset‐tracking application. To facilitate the analysis, RFID will be compared against the incumbent technology, bar‐coding. An experiment comparing these two technologies was conducted, and the findings from this experiment are further analysed.
Security
Search for missing items
Annual Stock take
Deploy, repair, relocate, refresh and return Figure 1: Hierarchy of Needs for Asset Tracking
Number of Assets 10,000 20,000 50,000 100,000 Number of Reads per Asset per Year 14.11 14.57 16.06 18.71 Annual Labour Cost for Barcode $12,721.70 $26,273.45 $72,398.94 $168,700.81 Annual Labour Cost for RFID $1,361.96 $2,812.79 $7,750.90 $18,060.81 Annual Cost Benefit $15,064.00 $23,685.80 $65,254.07 $150,640.00
Table 1: Annual Cost Benefit compared to number of assets
Table 1 lists the annual labour cost savings when comparing bar coding to RFID processes. For an organization with 100,000 assets, the annual labour cost savings exceed $150,000. This cost saving carries forward (future years) into perpetuity.
EXPERIMENTAL METHODOLOGY
The purpose of this experiment is to ascertain the time (and hence cost) savings that can be achieved through the use of RFID in Asset Tracking. This experiment only focuses on operational cost savings that arise due to the day‐ to‐day work activities involved in asset tracking. As well as these definite operational cost savings, other cost savings that are present include: Improve utilization rate of existing assets Increased productivity through more accurate data recording Security and theft prevention While these cost savings are not insignificant, and can provide primary reasons for an organization to