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Asset Valuation With RFID

A return on an investment in the technology can be achieved from improved quality and accuracy, the ability to perform frequent inventory counts and other benefits.
By Carlos Ribeiro
Dec 15, 2016

The end of the year is coming, and millions of dollars will be spent on asset valuation, traditionally performed via bar-code labels and badges. Much of the expense will be in outsourcing the inventory process, and in the consolidation or realization of repeated inventories of physical assets to comply with tax legislation.

Most companies insist on using only a single method of identifying goods—often bar-code labels. Sometimes, they use two or more bar-code tags so that they are not lost during asset counting.

This decision, typically made by a company's financial department, allows for physical asset control with minimal cost, and avoids deviations detectable by accounting auditors who analyze balance sheets and only monitor the systemic updating process, as a rule, using enterprise management software (from SAP, Oracle or Microsoft) or another internal system. The focus is on the depreciation of assets and the best possible reporting of physical assets' health.

With this narrow vision, companies lose the opportunity to take an integrated view based on logistics processes and, thus, to meet the level of services demanded by customers.

One week after outsourced companies are contracted to take inventory counts, a new cycle of uncertainty typically begins: determining whether physical assets are, in fact, present and in good condition. The "almost certainties" will come at the end of the following year, once a new contract is made to revise the asset bar-code tags and generate a new consolidated Microsoft Excel file.

I believe the vision of asset management with radio frequency identification must be an integrated one that drastically simplifies the inventory process at multiple locations. One advantage of this management proposal is the use of multiple goods-identification technologies, including includes RFID tags, beacons, bar codes and typing. In addition, importing the current labels via Excel allows inventory operations to be carried out within a matter of days.

USER COMMENTS

Michael Smith 2016-12-20 11:05:59 AM
Good article Mr. Ribeiro, I understand the value once the RFID tracking system is in place, but is there still not a need for a professional baseline inventory and deployment of the tags and RFID technology at the beginning.

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