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Does the Use of RFID Affect an Organization's Operational Efficiency?
Can you quote some examples of how the technology has had such an effect?
The use of radio frequency identification technologies does not guarantee an improvement in operational efficiency. A system can be poorly designed and/or implemented, and staff members can continue to use their old processes, even if the system is well designed and deployed, if they are not trained properly. RFID is a tool, and if you don't use it properly, it won't do much for your organization. But there are many companies across all industries that have seen significant improvements in operational efficiencies. Here are a few examples:
The Defense Logistics Agency (DLA), which supplies the U.S. Armed Forces, has seen a 40 percent decrease in errors, compared to manual entry at passive RFID-enabled receiving, and a 60 percent labor savings to accomplish full inventory within passive RFID-enabled Air Force facilities.
Memorial Hospital, in Miramar, Fla., has decreased its average bed turnover rate down to only 30 minutes.
A pilot program at Bloomingdale's found that item-level RFID tracking could improve inventory accuracy by 27.2 percent, and also reduce cycle counting time by 96 percent.
Sun TV Network, India's largest media company, is monitoring some 10,000 assets, 75,000 recording media and more than 200 vehicles. Among the benefits it has seen is a 25 percent improvement in the availability of equipment, as well as a corresponding 25 percent increase in asset utilization. Sun TV reports a 30 percent reduction in the request-to-issue cycle time for equipment and digital media, since items are now easier to locate. The company has also decreased its operating costs for managing vehicular traffic by 60 percent, thanks to a reduction of security staff and related overhead.
Metro Group, a German retail giant, utilizes RFID in its receiving of pallets of goods into inventory. The company tracks approximately 3 million pallets annually in Europe, and reports a 15 percent decrease in the amount of time it takes to unload trucks, in addition to a 50 percent drop in the time required to verify that the correct items have been delivered.
Methodist Healthcare, a six-hospital, 1,800-bed system in San Antonio, Texas, has reduced its bed-assignment time by 68 percent, and its monthly ED diversions from 700 hours down to just 8 hours.
Greek 3PL Diakinisis has tagged all of its pallets at a major distribution center to facilitate shipment handling. The facility tracked between 300,000 and 400,000 pallets in 2007, when the system became fully operational. Diakinisis has reported numerous operational improvements and benefits, including an 80 percent reduction in shipping errors, an 80 percent decrease in shipping costs related to error reconciliation, a 25 percent reduction in pallet putaway times and a 20 percent reduction in overtime.
San Joaquin Community Hospital, in San Joaquin, Calif., reports a drop in search times for PCA pumps from an average of 23 minutes down to less than 5 minutes, saving 1,663 man hours during a period of 4 months.
These are just a few examples I pulled from our Web site. There are many others. Of course, some companies using RFID decline to cite specific improvements for various reasons.
These operational improvements are no guarantee that your company will see similar gains, however. As with the introduction of any new technology, you have to design and deploy the system wisely and then train people to use it properly. If you do those things, it is almost certain that you will attain some impressive operational improvements from RFID.
—Mark Roberti, Founder and Editor, RFID Journal
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