5th March 2008 - Active RFID demonstrates ROI

Active RFID demonstrates ROI

While some companies may be actively seeking the value proposition of RFID implementation, others have discovered that the value proposition already exists in applications utilizing active RFID. These tend to be closed system applications which, at this point, provide the clearest path to calculating an ROI -- either in direct savings, process improvement or better customer service. Closed systems also do not rely on outside suppliers or customers to achieve 100% tagging, allowing companies complete control over the system. Of equal importance, however, is that tags are reused within the system and, based on cost-per-use, active RFID tags become very economical.

How and where are active tags being used to provide an active ROI? Here are some examples.

Asset management/tracking
Health care providers have been among the most resourceful in demonstrating how accurate asset identification and management using real time locating systems (RTLS) can save time and money. Being able to quickly locate moveable assets saves employee time. More importantly, however, is that an accurate inventory has helped certain health care providers actually reduce its inventory of expensive equipment or its capital expense budget by providing better asset utilization. Further, since some equipment cannot be used unless it is calibrated on a routine basis, it's necessary to locate specific pieces of equipment for technicians. In some case studies, prior to the implementation of RTLS asset tracking, equipment could not be located in a timely manner and was therefore not calibrated and could not be used.

Yard management
RFID enables more accurate yard management in company lots, freight terminals and car lots. Affixing active RFID tags to trailers and containers as they enter the yard enables yard managers to automatically record the location of specific loads, verify parking slots, direct drivers to pick-up slots, and certify departure times. Combined with yard management software, companies can manage the number of supplier, customer and carrier trailers in the lot, reducing density and, in some cases, lot size requirements.

Used to identify automobiles in dealer preparation lots, active RFID tags can help workers quickly identify individual cars that need to have accessories added and track their movement between shops. Some large car dealers have begun RFID tagging vehicles to help manage their inventories and help employees find the right car for a particular customer.

Fleet management
Active RFID tags on company transportation assets -- tractors, trailers, dollies, etc. -- can be used for yard and fuel pump access, maintenance histories and hours of operation, and driver/vehicle matching. Trailer tags, used in conjunction with bar code or RFID shipment information, can also verify the contents of each load and time of departure from a shipping dock.

Lot/batch tracking
Using read/write RFID tags on bins, vats, totes and other moveable containers used in batch processing allows companies to achieve a more granular view of the process. If the source and type of ingredients going into each batch are identified, the RFID tag can be used to track finished product back to a single batch or process and used for quality control or in the event of a recall. Being able to limit the size of a recall provides obvious advantages in both cost and customer perception.

Sensors
Sensors attached to either active or battery-assisted passive tags have begun to offer significant quality control measures that were previously unavailable, too expensive, or too complicated.

Temperature sensors on shipments of perishable goods can facilitate accurate FEFO (first expire, first out) inventory management. A university study demonstrated that temperatures within a refrigerated trailer can vary significantly. These variations were observed to be in "micro-zones" that were previously unanticipated -- meaning that perishable goods in adjacent cartons on a pallet could have different effective expiration dates. Active tags can maintain a histogram of temperature (or shock, vibration, humidity, etc.) for evaluation upon receipt of shipment.

The US military is using sensor-enabled active RFID tags to monitor conditions within jet engine storage containers. These are often stored in outside lots and leaks in the container can quickly ruin a multi-million dollar piece of equipment.

Sensors attached to active RFID tags are now also being used to monitor concrete cure rates and maturity in both pre-cast concrete and new construction. Because tags do not need external leads or connections, construction managers can more easily obtain accurate readings on the maturity of poured concrete structural components and can safely build more quickly.

Tool/fixture tracking
In many manufacturing facilities, large tools, jigs and fixtures are used only for specific production runs and are warehoused between uses. For defense contractors, many of the tools and fixtures belong to the military and must be accounted for on demand. Quickly locating the right storage container is essential in maintaining production schedules. Again, active RFID can help locate and identify these assets.

Conclusion
While passive RFID remains an area where we continue to see growth, adoption and innovation, it's important to remember that RFID is a diverse family of technologies including active. Active RFID tags used in closed loop applications are proving their worth in a wide range of applications today. It's clear that, for many companies, it's time to actively seek active RFID solutions.

Bert Moore
Editor
RFID Connectiond