The benefits of RFID when tracking assets and RTIs are many. This article takes a closer look at some of the benefits from an RTI business and asset management perspective.
Opening up the concepts
What do we mean when we say RTI? RTI, Returnable Transport Item, is a reusable packaging asset, which is utilized in transporting goods and then returned to its original location. RTIs are roll cages, pallets, plastic crates, etc. The goods are packed in an RTI, then shipped through the distribution chain to its end location, a retail store, a factory etc. Afterwards, the empty RTIs are shipped back to the original location, mostly following counter-wise the steps in the distribution chain.
When talking about asset management, we mean the “coordinated activity of organization to realize value from assets” (ISO 55000). Thus, it means balancing and evaluating the existing assets to bring profits to the company. The core issue is to make the right decisions and optimize the delivery of value. In practice, an asset is owned by the company and it can be for instance an RTI, but also tools, textile and office equipment are considered company assets. Moreover, asset management covers a larger spectrum of actions, such as managing the RTI pool or rented assets in circulation.
In the RTI business, the aim of asset management is coordinating the actual RTI pool and allocating the right numbers of RTIs to customers, but also predicting the circulation pattern. This means that a company must have a sufficiently large pool of assets circulating to provide RTIs to customers, and to ensure the product deliveries.
Track and trace to technologies that enable goods to be followed through the delivery channel, including identifying and verifying their path. RFID is considered a track-and-trace technology, as it enables both real-time monitoring of the goods as well as easy, fast and efficient tracking of the items. RFID can also be utilized to automate the tracking operation itself.
What to bear in mind when planning to invest in RFID?
Inevitably, the list of benefits that the RFID implementation brings along is remarkable:
- the inventory accuracy improves,
- the out-of-stock situations in shopscan be eliminated,
- and shipping errors of outbound operations can be avoided.
However, there are several things that should be taken into account when an RTI pool owner considers deploying RFID in their business.
- To begin with, the actual need for RFID should be carefully estimated, including where the potential benefits arise as well as is the list of benefits long enough.
- When the benefits are clearly evaluated and listed, managing the assets becomes easier with real-time measurement systems.
- Real-time information is a big advantage, which can be considered a money-maker for the RTI pool owners.
Moreover, as a business decision maker, it is important to keep in mind that when considering RFID implementation, asset tracking and asset management are two different operations. Focus should be on the chargeability of the system – if the RTIs are not rolling in and out, no profit for the pool owner is generated. Companies facing these kinds of problems are easily willing to exploit an automatic RFID system as they understand that it will enhance their RTI processes. Another point is that the RTI pool needs to be large enough, so it would make sense to transfer the fleet to an RFID system.
Price tag = value CREATED by RFID?
The value brought by an investment can be classified in different ways. Financial benefits are perhaps the most common assumption, but are they the only targeted value driving an RFID implementation? No, it’s not.
- As mentioned, the most common value is financial – RTIs are considered an investment as they are reusable assets that bring financial value to the owner.
- But when this asset is not returning on time or not at all, the aspired value is something non-financial, urgency-related, and thus more difficult to define. The second value is naturally avoiding downtime in other shipments as you are able to improve monitoring the availability of an RTI. The term used to describe this is intrinsic. It consists of the actual value of an asset based on an ultimate assumption of its true value, which includes both tangible and intangible aspects of the business. When an RTI is either not returning on time or not at all, it causes intrinsic problems in the asset management.
- From the asset management perspective, the value consists of different angles or focuses. If an RTI cannot be tracked and it contains important spare parts for a certain production machine, the whole production is standing while waiting for the spare part to arrive and to be installed. The third value is mission critical value – when one fails, others fail too as a chain reaction.
maximize the profits brought by RFID
To boost the RFID implementation process, the actual RTI, and the goods inside, should be monitored as part of the same infrastructure. As the infrastructure can take advantage of the same expense as the scope increases, several stakeholders and interest groups benefit from tagging the RTI. This gives guidance how to build the roadmap. By monitoring both the RTIs and the goods inside with the same RFID system, the overall benefits of tracking increase. In short, this means that the whole supply chain benefits more of the RFID tagging when the system tracks both the RTI and the goods inside.This way also the customer, whose goods are inside the RTI, can take advantage of the tagging process. Moreover, besides asset tracking, also the supply chain gains benefits.
Furthermore, when the RTIs are lost, who will take responsibility for the money lost? The end customers are not willing to take any responsibility unless their goods are the ones inside the missing RTI, even though it can be considered their responsibility. Furthermore, the damages caused by the missing RTI should be measured in real currency as it helps people understand the level of losses better than other criteria.
If you are interested in RFID tagging, don’t miss our expert article on how to succeed in writing tags.
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