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How RFID Technology Can Enhance Your Asset Management Program
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Table Of Contents
- Introduction
- How RFID Technology Works
- RFID Versus Barcode
- RFID Technology in Real-world Applications
- Summary
Introduction
Even though the technology has been around in some form since World War II, chances are that you
think of Wal-Mart's supply chain initiative when you hear the words "radio frequency identiication,"
or "RFID." Since January 2005, the retail giant has required suppliers to place RFID tags on pallets
and cases. Wal-Mart is already seeing a return on their investment, such as gaining the ability to
reill out-of-stock products three times faster than before.
But does RFID technology make as much sense for asset management as it does for supply
chain management? While senior executives may pay close attention to product inventory, they
sometimes underestimate how the cost of purchasing, maintaining, and disposing of assets
can affect the bottom line. Engineering directors, IT managers, and maintenance personnel
understand the impact, but they typically have had ineffective tools ' time-consuming,
error-prone manual systems and spreadsheets ' that prevent easily and quickly tracking,
measuring, and reporting on the status and performance of these assets. For manufacturers
alone, according to ARC Advisory Group, just improving asset performance by a few
percentage points could be worth billions of dollars annually across the industry.
RFID technology enables the automated gathering and sending of asset information ' including
location, meter readings, maintenance status, and much more ' without a person needing direct
line of sight or contact with that asset. Not only does RFID provide a fast, accurate method of
obtaining this valuable information, but the types of information it enables asset managers to gather
can help companies do such things as reduce costs by implementing a need-based maintenance
schedule rather than an arbitrary calendar-based schedule, increase revenue by accurately valuing
assets being sold, and increase equipment longevity by identifying usage patterns and the need for
additional user training.
This brief paper describes the basic RFID technology components and how they work, and it
compares the differences between using RFID and barcoding for asset management. This paper also
provides real-life examples of how RFID technology is being used by enterprising organizations today
to gain signiicant time savings and enable better asset management.
How Rfid Technology Works
RFID technology consists of two basic components: a tag (or "transponder") that is afixed to the
asset being monitored, and a reader (an antenna and transceiver). When the reader transmits a
signal in a speciic radio frequency, the tag is activated and sends the data back to the reader. The
reader passes information to the control system, but also can write information back to the tag.
RFID tags are described as "passive" or "active." A passive tag is one that does not contain a
battery; the power is supplied by the reader. When the reader transmits a signal, the tag's built-in
coiled antenna forms a magnetic ield. The tag draws power from the ield, energizing its circuits
and enabling it to send the information encoded in its memory. An active tag is equipped with
a battery that can be used as a partial or complete source of power for the tag's circuitry and
antenna. Some active tags are sealed units, while others contain replaceable batteries, thus
extending the tag's useful life.
Key factors in selecting a tag for a speciic application include the likely distance between the
tag and reader, and the amount of data to be stored on the tag. Passive tags must be close to the
reader ' generally within a few feet ' and have less memory than active tags. Active tags may be
hundreds of feet from the reader and have more storage capacity than passive tags. See Table 1 for
a comparison of active and passive RFID tag characteristics.
Table 1. Relative Comparison of Active and Passive RFID Tags
| Passive Tags | Active Tags |
|---|
| Cost | Less expensive ' from a few cents to a few dollars | More expensive ' often $20 or more |
|---|
| Size | Smaller ' some as small as a grain of rice | Larger |
|---|
| Power | Provided by reader | Provided by battery |
|---|
| Maintenance | None required | Battery or tag replacement required |
|---|
| Useful life | Longer ' up to 20 years or more | Shorter ' depends on battery life |
|---|
| Distance at which tag can be read | A few feet | Up to hundreds of feet |
|---|
| Memory | Less memory (typically 16K) | More memory (as high as 512K) |
|---|
Two types of RFID readers also exist: "ixed" and "portable." A ixed RFID reader is a device that
automatically detects RFID tags without any user interface or mobile capability. These readers
typically have a direct Ethernet connection and intelligence built into the unit to enable tag capture
and basic data transfer. Fixed readers are primarily used to track such information as location and
work in process. They are typically implemented as a "pass through" station, such as the doorway to
a tool crib. RFID portable (or "mobile") readers typically are Pocket PC/Windows® CE devices, which
look similar to today's familiar barcode readers. They can be carried by personnel or attached to
vehicles, such as forklifts.
Once the RFID reader gathers data, the information is passed through middleware to the
organization's enterprise asset management application (see Figure 1). As a result, the system
may trigger an alert, release a work order, create an invoice, locate an asset, or do whatever
else is required.
Figure 1. Example of RFID Information in Preventive Maintenance
Rfid Versus Barcode
While the irst type of barcoding had been developed decades earlier, the irst Universal Product
Code scanner only began operation in 1974 at an Ohio supermarket. A package of chewing gum
was the irst product to include a barcode. The technology has been used to speed up grocery
checkout lines worldwide since then.
Barcode is referred to as "line of sight" technology. That is, the barcode must be placed very near a
scanner to be read. Barcodes can store only limited amounts and types of information. In addition,
they cannot be preprogrammed, and they must be scanned one by one.
Like barcode, RFID is all around us: in the "drive through" lane at the toll booth, at the "quick tap"
pump at the gas station, on military cargo and containers, and even, perhaps, in Bowser, the family
dog. There are plenty of differences, however, between the two technologies. For example, an RFID
tag only need be within range of the reader. RFID tags do not need to be within line of sight, nor do
they need to be stationary or presented in a certain orientation to be read. In addition, RFID tags
can store more ' and more types ' of information than barcodes. They can be reprogrammed and
can be read simultaneously and automatically. Table 2 compares these technologies along with the
manual processes often used to manage assets today.
Table 2. Relative Comparison of Asset Management Tools
| Manual Process | Barcode | RFID |
|---|
| Data accuracy | Least accurate | Most accurate | More accurate |
|---|
| Data collection time/labor | Most time/labor | Some time/labor | Least time/labo |
|---|
| Data input time/labor | Most time/labor | Some time/labor | Least time/labo |
|---|
| Equipment cost (tags, readers/scanners) | N/A | Some | More |
|---|
| Ability to track assets out of line of sight | No | No | Yes |
|---|
| Amount of data storage on tag | N/A | Less | More |
|---|
| Ability to exchange information two ways | No | No | Yes |
|---|
| Ability to reprogram tags | N/A | No | Yes |
|---|
RFID Technology In Real-World Applications
To fully understand how RFID can make a difference, it is important to explore some real-life
examples. Two that will be discussed here include leet management and utilities.
Fleet Management
A management services irm currently oversees a large leet of forklifts, cranes, and trucks for a
client. This includes everything from rental or leasing of equipment, to maintenance and disposal.
The irm recognized that leet maintenance alone, if improved, could save signiicant amounts of
money for its customer. The manual collection of equipment usage data was expensive and time
consuming. Gauges sometimes were faulty or inoperable, providing inaccurate data. The irm also
recognized that, just because a key was in a vehicle's ignition, it didn't necessarily follow that the
equipment had been used or required maintenance.
In an effort to help its client manage these assets better, faster, and cheaper, the irm began using
RFID technology to capture actual forklift engine-hour readings. Rather than someone manually
recording this data for each piece of equipment in the leet, as used to be done, someone now walks
about the facility with a handheld recorder. Data from any forklift within 200 feet of the reader
is automatically captured. As soon as the handheld recorder is placed into a docking station, the
information is fed into an asset management software program. The program then creates an asset
utilization report for the management irm and its customer.
The beneits are immediately obvious. Data collection is fast. It is accurate. And those people
who need the information in order to make decisions no longer must wait for someone to key
data ' hopefully without error ' into the system.
The management services irm is now considering other key measures it wants to capture with
RFID, including the number of times a vehicle's forks move up or down (a sensor would be
placed in the hydraulic system), or the number of times and frequency a forklift ' or rather, the
operator! ' crashes into something (which would be recorded with the help of a G-force sensor).
By easily capturing key pieces of data with RFID technology, the company feels it will be able to
determine which make and model of forklift works best in their environment and for certain types
of jobs. It will be able to implement a preventive maintenance program based on actual vehicle
condition rather than on an arbitrary schedule, much like how people change the oil in their cars
based on actual mileage rather than "every six months." They also will be able to determine
whether they need more vehicles, or whether they just need a few rapid battery chargers.
In addition to mobile equipment management, the irm anticipates implementing facilities
management and process management applications in the future. It's all about helping their
customers ind better, faster, and less expensive ways of doing business.
Utilities
A small US municipality has outitted its residential water meters with RFID tags. To gather
meter readings for water usage, a city employee simply drives by the households. The tags send
information back to the reader in the city's van, which passes information to the billing system.
For the city, data is captured quickly and accurately. For the home owner who need not be
present or call in the reading, it's convenient.
This system also helps the city manage assets: it can identify whether a meter is working improperly.
By having this information sooner rather than later, the city reduces potential revenue loss from
faulty equipment and can track asset lifecycle trends.
Other Industries
Fleets and utilities aren't the only ones interested in better asset management through
RFID technology today. The US Army is developing a prototype RFID-based system that
will measure not only how many times a weapon is ired ' something that must be manually
recorded today, even in combat ' but also the effects of those irings (heat, force, vibration)
on the gun barrel. This information will assist the Army in understanding the maintenance
requirements of a weapon's barrel.
In another example, nearly half of the healthcare organization respondents to a 2005 survey
expected to implement RFID systems by 2006 to track expensive equipment. Because most
hospitals currently cannot track the whereabouts of equipment, according to the researchers, they
tend to over-purchase equipment to ensure they can ind it when needed.Pharmaceutical groups
are also strongly eying RFID to track the movement of expensive drugs.
Some companies even are looking at using RFID to track personnel. For example, RFID tags may be
placed at different points on a security guard's route throughout a building. Rather than having to
stop at given stations to conirm his presence, the guard can instead concentrate on monitoring the
building, allowing the reader at his side to automatically perform the conirmations for him.
Summary
The costly, time-consuming nature of data gathering in the past meant that organizations limited how
much asset-related information they gathered and how frequently they gathered it. With today's RFID
technology, more data can be gathered faster and less expensively than ever before ' information that
can be used proactively to prevent problems, to schedule maintenance based on actual condition
rather than on an arbitrary calendar date, and to optimize the value of all the enterprise's assets.
Two companies helping to make these beneits possible are partners Infor&8482; (http://www.infor.com)
and Blue Dot Solutions (http://www.bluedotsolutions.com).
Infor, one of the largest business software providers today, delivers integrated solutions for a
wide range of industries, as well as best-in-class, stand-alone products that address the critical
challenges its customers face in areas such as asset management, enterprise resource planning,
supply chain planning and execution, and others. Its core asset management products include
Infor EAM Enterprise Edition, Infor EAM Business Edition, and Infor EAM MP2.
Blue Dot Solutions (http://www.bluedotsolutions.com) is a leading provider of intuitive mobile and
wireless computing solutions for asset-intensive companies and industries. Their mNOW! Mobile
Framework provides customers with capabilities for combined mobile and RFID functionality in a
single infrastructure. Blue Dot's mNOW! Middleware facilitates the delivery of information from a
handheld device to customers' Infor asset management solutions.
To obtain more information about how RFID technology can help you better manage your assets,
contact your local Infor or Blue Dot Solutions representative.