RFID is all about the data – how many, what, where, and who. As a data collection system, RFID is hard to beat. It’s fast, it’s accurate, and it interfaces easily with other automated business-information systems. But like any other business system, RFID’s return on investment is a burning issue for managers. When you analyze the data, is RFID a good business decision?
One industry has already done the science and calculated the math for us: Healthcare.
The healthcare industry has incorporated RFID into many aspects of its operations. RFID was first adopted as an inventory management system for medications. As its value was recognized, it was expanded into asset management, as well as patient and personnel location.
Now RFID systems are tracking medication from manufacturer to patient – something that’s especially important in the delivery of the coronavirus vaccine. RFID labels are applied at factory, tracked to the pharmacy, and ultimately to the individual patient receiving the medication.
With RFID so widespread in the healthcare sector, the question of ROI arose among decision makers. The Mayo Clinic, whose scientific methodology is unimpeachable, undertook a study of the return on investment of hospital RFID systems. Researchers examined search time, shrinkage rates, utilization rates, and RFID implementation costs in a 600-bed hospital.
And the results? The team calculated:
- Payback of initial installation costs – 2 months
- Three-year projected ROI – 327%
Those numbers would make any accountant smile. Of course, every operation is different, and as the saying goes, “your results may vary.” In other industries, RFID can be even more productive, linking to MIS and ERP systems to create an end-to-end BI (business information) system.
A projected ROI of 327% is quite attractive, and with a customized industry-specific RFID system, you may find your ROI is even better. However, unless you have in-depth RFID experience, it’s best to work with an expert. An experienced consultant will design and install a cost-effective RFID system ideally suited to your business. Break out your calculator and start watching your ROI grow.
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