A 600-bed hospital managed by the Mayo Clinic was among the first to calculate and publish the results of an ROI analysis of RFID in a healthcare setting. The final number was impressive: 327% ROI over the first three years, with break-even at less than a year.
But maybe your organization isn’t in the healthcare business. You manage a professional services company, a manufacturing business, a museum, or a retail store. How do you calculate RFID’s ROI when your operations are quite different from a hospital’s operations?
ROI calculations, at their most fundamental, start with questions.
- What items are vital to your operations? Answer very specifically (e.g. “33 laptop computers with 16 gb of storage,” rather than “computers”). These items can be operational elements, or manufactured products, or a combination.
- Visibility: How many times per day/week/month does an item go missing? How often are you short on supplies?
- Intrinsic value: What does the loss of an item cost – not just the hard cost, but the cost of intangible added value? Artwork or data are examples.
- Management costs: What is the cost of periodic inventories or audits to maintain operations?
- Ancillary costs: How much income is lost due to down time when an item is missing or lost, or supplies run low? Are there costs associated with regulatory fines for lost items? How do inaccurate inventories in one department impact other departments’ finances?
With these numbers in hand, calculate two cost scenarios. One scenario is for existing conditions. The other includes the potential improvement to visibility provided by RFID. Most RFID users see visibility (loss) improvements of 60% or better.
But to truly calculate ROI, we have to project the potential savings over an extended period, usually 3 to 5 years. The Net Present Value (NPV) formula gives the most realistic ROI projections for RFID. The NPV formula shows whether the benefits outweigh the costs.
If you manage finances for your organization, you’re familiar with NPV. If you work in a less math-intensive department, you might find an NPV calculator useful. Either way, the answer will give you a strong indication of the wisdom of an investment in RFID. We’re quite confident you’ll be pleasantly surprised by the outcome!
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If you’re wondering if RFID has any applications for your business, the recent RFID Journal Awards might be an eye-opener. RFID has moved far beyond its original use as an inventory management tool. The array of various business sectors receiving awards ranges from hospitals to mines. A few of the award winners are reviewed here:
- Healthcare: Winning in the Healthcare category, Sakura City Hospital is indeed a city, with more than 2,600 beds and over 187,000 assets. Those assets are tracked with RFID, reducing loss and waste, and ensuring the availability of equipment and medicines.
- Manufacturing: This year’s winner in the Manufacturing category is using RFID to produce COVID-19 test kits with fewer personnel. With manpower at a premium, diagnostic-test manufacturer Danaher-Cepheid is helping save lives by maintaining high levels of production during the pandemic staffing crisis.
- Implementation: This category awards innovative uses of RFID. Mining ranks in the top 25 most dangerous jobs; locating miners in a disaster reduces the chance of injury or death. Turkish industrial conglomerate Eczacibasi has implemented an active RFID system to monitor the location of miners and equipment with pinpoint accuracy.
- Retail: RFID has been well-known in the retail world for several decades, but it has really come into its own in creating operational efficiencies. This year’s Retail award went to Havan Labs, a premiere retailer in Brazil. With more than 200,000 items, Havan Labs’ store inventories used to take 15 employees working over 5 nights. After implementing RFID throughout its operations, inventories take 1 employee, and 1 hour.
Even more important, RFID’s real-time data has enabled Havan Labs to reduce its in-store stock by 30 percent. Storage space has been converted to retail space, increasing sales without the risk of out-of-stocks.
Congratulations to all the winners and to all the businesses who have discovered the benefits of RFID for themselves. The above industry sectors are only the tip of the RFID iceberg – automobile parts, legal documents, antiquities, rental cars, historical archives, Army boot manufacturers…the list of RFID applications goes on and on. There’s an application for your organization, too. Who knows, it might win you an award.
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Counterfeits are big business. A global analysis estimated lost sales of $1.82 trillion in 2020. And it’s not just the sales lost to counterfeits. Jobs are lost. Even lives are lost. And brand trust – intangible and invaluable – is damaged, perhaps forever.
Fake products aren’t confined to luxury goods like handbags and watches. They include:
- Pharmaceuticals – Whether they are ineffective sugar pills, or contain dangerous toxins, counterfeit medications have been estimated to kill as many as 1 million people annually.
- Art and Antiquities – Reputable museums and private collectors paid a grand total of $80 million for counterfeit works from one New York forger, as documented in the film “Made You Look.”
- Consumer goods – From consumer electronics to vintage wines, fake labels and fake contents cost the U.S. $600 billion per year.
- Manufacturing components – Falsely labeled components and materials were reported to cost the automotive industry alone $3 billion per year.
Adding insult to injury, counterfeits destroy brand trust. A Harris Poll of 2018 found that if Americans learned that they had purchased a fake product, 73% would stop buying from the company that sold it.
Technology comes to the rescue in the form of RFID. RFID assigns a unique identifier to every element of a product. It starts at the very beginning of the manufacturing process and continues through product completion, shipping, warehousing, and retail sale. The authenticity of each finished product can be certified. Its RFID-managed and controlled “history” is unimpeachable. Your brand’s reputation is enhanced though the use of anti-counterfeit technology, and customers trust your brand more than ever.
RFID has many benefits, from inventory management to operational security and more. But perhaps none is more valuable, in the long run, than protecting your brand.
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NFTs are the hot ticket for the digitally-savvy investor. A Non-Fungible Token (NFT) is essentially a certificate of authenticity for a digital file, ensuring that the owner of the digital file possesses the genuine asset. The technology behind NFTs and their underlying blockchain systems may be confusing to the average layperson, but the concept of asset management, buying and selling, is something we can all understand.
NFTs hold the potential for leveraging the monetary value of almost any digital file, from artworks to archived documents. Digital assets, like physical assets, have value for any enterprise. Like physical assets, digital assets are managed and maintained for the benefit of the enterprise (digital asset management or DAM). NFTs intersect with DAM when the monetary value of a digital file is determined, and an NFT is issued for it.
Digital art has been prominently featured in the NFT market, but UC Berkeley recently sold an NFT of some digitized documents for $55,000. The university owned imaged files of some Nobel Prize-related research documents. An NFT was created of these imaged documents, and it was auctioned to the highest bidder. Berkeley received a lump sum, plus a 10% royalty of any subsequent sales of the NTF.
What does this mean for other organizations’ digital assets? Every business, non-profit, and governmental body has documents that could be valuable to collectors, historians, or researchers:
- Vintage logo artwork
- Historic contracts with signatures
- Founding documents
- Historic correspondence or writings
- Archived photographs of significant events
Selling NFTs of some of these digital assets could yield significant funds for an organization. Keep in mind that an NFT can be structured in many ways – a royalty structure such as UC Berkeley did, or perhaps an ownership reversion under certain conditions. And there can be multiple NFTs of a single digital document, under a limited-edition structure.
But before you can profit from the sale of your digital assets, your paper documents have to be converted to digital files. That’s where document imaging comes into play. A well-designed and professionally executed imaging program gives you all the benefits of document conversion – security, accessibility, reduced storage space – along with the potential for additional income. Image your documents, and mine the value of your digital assets.
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Museum designers have been working hard to change the musty, dusty reputation of museums, and RFID is helping with innovative applications. No longer is the hands-off “Night at the Museum” look the standard for U.S. museums. To attract new patrons, museums are bringing advanced technology to bear, including VR and RFID.
RFID in particular has been easy to adapt for new creative purposes. Many museums already use RFID to manage their collections, affixing unobtrusive RFID tags to art and artifacts. Doorway readers record when items are moved, whether from storage to exhibit, or from one room to another. Curators can check inventories as simply as walking into a room with an RFID scanner. Tags can be programmed to store a variety of data about the object: name, age, and collection information; restoration status; climatic requirements; maintenance schedule; and much more.
But beyond inventory management, RFID offers opportunities for interactive, immersive experiences for museum patrons. Some creative RFID applications:
- Washington, D.C.’s International Spy Museum uses RFID-enabled badges to let visitors take on a spy’s persona. Visitors test their espionage skills as the spy of their choice, and receive an online “debriefing” after their visit.
- Touring exhibit “The Science of Survival” allows visitors to make lifestyle choices in various sectors of the exhibit (transport, building, food and drink), collecting their answers via RFID entry badges. The results are compiled to forecast the future environmental impact of those choices in the year 2050.
- At the O2 in London, visitors at the British Music Experience “collect” their favorite items on museum-issued RFID cards. In-depth information about their favorites is then sent to them in a follow-up email.
- Visitors to the Horsens Prison Museum in Denmark can choose a specific guard or inmate to learn about – for example, a prisoner who escaped by digging a 59-foot tunnel. Visitors’ RFID badges activate videos and images related to each visitor’s particular subject, for a customized experience.
From museum managers’ point of view, RFID ‘s enhanced visitor experience helps to define and reinforce the museum’s brand, build visitor loyalty, and create publicity opportunities. From the museum patrons’ perspective, RFID creates a visitor experience that is far more personalized and immersive than the old-school museum walk-through. It’s fascinating, it’s imaginative, and most important, it’s just plain fun!
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World-renowned historic museum employs state-of-the-art vertical storage solutions and saves on real estate costs.
The price of commercial and industrial real estate is always on the rise, and facilities managers often face the challenge of finding additional storage capacity on a limited budget. Many times the solution can be a vertical expansion, instead of costlier horizontal growth.
One Washington, D.C.-based museum took the upward path when its archival storage capacity began to be strained by continued growth. Its collection of more than 18,000 artifacts, 89,000 historical photographs and images, and 76 million pages of archives, as well as film, video, and oral histories was housed in a substantial facility, but the collection received an average of five to six new artifacts every day.
A heavy duty shelving system supplied by National Office Systems doubled the height of the museum’s previous storage system, allowing the museum to continue collecting artifacts for scholarly research and ongoing educational exhibits on the National Mall.
The storage capacity of a national museum in Washington, D.C. would soon be overrun by the growth of its collection if additional storage was not created. Its facilities manager hoped to take advantage of the vacant vertical space above the museum’s then-current storage shelving, requiring a stronger, more robust shelving system with enhanced accessibility, as well as additional climate and humidity controls.
Using Heavy Duty Industrial Shelving sections, National Office Systems was able to provide 20’ high shelving units, along with a steel grate mezzanine to provide two levels of accessible storage.
Stairs and safety railings were also provided and installed.
The installation was particularly challenging as it had to be coordinated in six different phases, each dependent upon the other and requiring other vendors to provide changes to the existing electrical, lighting, HVAC and fire safety. Old storage systems had to removed, and their contents also had to be relocated and safely stored.
With storage capacity for years to come, this museum can continue its mission of research and education, without additional real estate expenditures for storage.
“Museums require additional levels of care and control to insure the safety and preservation of original historical documents and artifacts. There is no room for error, and proper planning is the key to success,” – Kevin Ward, Storage Specialist
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