The Untapped Value of RFID Data

By Mark Roberti

Genesis Health Systems shows how the information derived from tracking assets can be used to anticipate the need for tools and equipment, so companies can respond proactively.

Last week, we hosted a virtual event entitled RFID for Asset Tracking. We had 540 people pre-register for the event, and almost 270 took time out of their day to listen to five sessions over a two-hour period. Clearly, there's great interest in using radio frequency identification technologies to track assets. And that's understandable—we are good at managing things that are stationary, but not so good at tracking those that move. (If you missed the virtual event, you can watch the video of each session here.)

Asset tracking represents a low-hanging fruit for RFID projects. Deploy a system, and you'll almost certainly increase asset utilization, reduce labor costs and achieve a return on investment. Several companies that have deployed RFID asset-tracking solutions participated in the virtual event, and here are some facts that were revealed during their sessions:

Genesis Health Systems had hoped to cut the time it spent searching for medical equipment from 22 minutes to 11 minutes with RFID, but it actually decreased the time down to 2 minutes.

Northrop Grumman reduced its rental cost on one tool alone by $750,000 annually.

Wayne Memorial Hospital found it was utilizing only 60 percent of the oxygen pumps it owned, so it purchased 50 fewer than planned, thereby saving $275,000.

• One cigarette maker saves $2 million annually in manufacturing mistakes, with a system that cost just $50,000.

These facts are impressive enough, but they actually tell only part of the story. Genesis Health Systems not only employs RFID to reduce the amount of time it takes to locate assets, lower rental costs and decrease capital expenditures on new assets, but also to understand what equipment will likely be needed, and when.

"Prior to our RFID deployment, trying to forecast demand was about as effective as rolling a pair of dice," said Al Loeffelholz, the company's logistics manager. "Today, with RFID, we developed a system of custom reports, keeping accurate records of those reports and using that information to make informed decisions."

In the health-care sector, forecasting the need for equipment can be critical. Loeffelholz, and his co-presenter, Steve Montgomery, Genesis Health Systems' supervisor of logistics, described how RFID was used during a disaster response drill.

"I was over on the East Campus, in the command center, and Steve was part of the team I was in contact with, on the West Campus," Loeffelholz said. "The drill started. East Campus was rolling. I was getting information from Steve on how we were doing with pumps and other equipment, and reporting back to a command center. Everything was going fine, until there was an incident with anthrax [that] shut the East Campus down totally. We had to divert everything to the West Campus. I called Steve and said, 'Give me a status on what you have, and what you need.'"

"I'd heard about the problem [at the East Campus] over the radio," Montgomery said. "I determined we had enough IV pumps, but they were in the wrong location, so I loaded up a cart with IV pumps. While I was unloading them, one of the nurses asked, 'How did you know we needed IV pumps?' Thanks to RFID, we did."

"When Steve called me back," Loeffelholz added, "I went into the command center and reported back to the executives. I said: 'Here is the status of the West Campus.' This was within minutes of when they first told me they were shutting down the East Campus. They looked at me, like: 'OK, Al. We know this is a drill, but you are supposed to give us kind of real information.' I said: 'No, it is real. This is what RFID can do for us.' The executives just stood there in awe."

I wish I could have been there.

The ability to anticipate what equipment will be needed, and to have it in the right place at the proper time, could save lives in a real disaster. RFID data can also be valuable in other industries. I've talk to executives at apparel companies using RFID in stores, for instance. One said that they could analyze the data and tie the theft of items to certain employees working at specific times. Zander Livingston, American Apparel's head of RFID, has said he'd like to test RFID in the store's fitting rooms to identify items that are often tried on but seldom purchased. An analysis of that type of information, he believes, could suggest that there is a problem with the way a shirt is cut, or something else that could be addressed.

End users with whom I speak often tell me that as they collect more data from RFID systems, they learn new things about their operations, and find ways to use that information to improve operations. Of course, the main reason most companies will deploy an asset-tracking system is to improve asset-utilization rates and achieve other established benefits. But the rich RFID data is an awfully nice bonus.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog or click here.