Real Time Location Systems Pay Back Under Right Conditions

Real-time location systems (RTLS) adoption is growing amongst companies with revenues of $200 million throughout the world and across a variety of markets, according to 2012 research by VDC Research Group. VDC’s new whitepaper, "Understanding RTLS: What it Is, How It's Used and What You Need to Know before Deploying," concludes that radio frequency identification (RFID) is no longer an emerging technology and that more than half of its survey respondents noted it took less than a year to realize a return on investment.

The report’s authors remind that RTLS is not the same thing as an asset tracking system, although it can be used for that purpose. The difference is RTLS involves continuous communication between the item being tracked and the system. To achieve an ROI, a system should address the following business challenges:

• A large installed base of mission critical assets or mobile assets that are critical to the business;
• The supply chain is complex and comprised of multiple product sets/types;
• There is a need to reduce order-to-cash cycle time;
• There are significant MRO and/or compliance requirements;
• Current asset tracking methods don’t provide needed visibility;
• RTLS is being used at other points in the supply chain.

VDC’s study respondents indicated they spent, on average, approximately $190,000 on their RTLS systems in 2011. The report’s authors estimate that could expand 90% within 24 months as these companies scale, expand and integrate their solutions. They also note that these respondents had experience with the technology and had already begun deploying the solution, and that annual budgets would more closely reflect 2013 values exceeding $500,000.

The primary cost factors include price of active RFID tags vs. passive, the number of readers and the level of customization required.

Related Editorial:

Fit RFID to Your Needs

RFID System Supports Material Tagging for GSA Warfighter Project

BAS Trucks Improves Visibility with Real-Time Locating System

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