RFID IS a financially feasible solution to your MRO needs

Stan Marshall spent 31 years at Georgia Pacific, where he was responsible for their Maintenance, Repair, and Operations (MRO) team. With Barcoding, Stan successfully implemented solutions that helped their team run a more efficient, accurate, and connected. He brings a client perspective to the discussion of why the ROI on RFID technologies has significantly improved and become a technology that even more businesses should consider when evaluating how they can improve their MRO functionality.

Current State

According to Stan, 70 to 80% of businesses manage the inventory of their storerooms without any technology. This involves manual management and physical tracking and counting of items using spreadsheets or even word-of-mouth. This means that there is little to no data tracking of what parts are being removed except by manual notification through manual input by humans. This then flows into the ERP System for restocking of parts and allows for human error. Not only is the manual labor that this requires expensive; you also cannot rely on the information you are given to be accurate when you are in a real-time crisis, resulting in increased machine downtime that can prove catastrophic.

Why Even Physical Counts with Barcodes Are Less Accurate

Other organizations use barcodes, however, there is still a human element. Typically, if the accuracy of the information that a company is receiving is below a certain level, they invest in a physical count of the items stocked in their MRO. Depending on the size of their physical storeroom, this takes at least 1-3 days and 5-10 employees and up to a week and a half with 13 individuals manually scanning each item.

The time these employees spend on this is hours they could be contributing to other key tasks. Not to mention that although barcodes are an improvement when compared with no technology at all, the results you are given are still likely to be less accurate than those delivered by a technological solution.

Why Go With RFID?

The key elements that you should consider when questioning whether to switch to an RFID solution are the number of parts you currently store in your MRO, the number of human resources your current set-up requires, how detrimental machine downtime is to your business, and what happens to your customer base if you do not have a product. While it may make sense for smaller manufacturers to stick with barcodes, larger manufacturers that have 5,000 parts or more in their MRO and risk major financial losses if a machine stops working should consider making the switch to RFID technologies.

What makes RFID worth it? Well, firstly you will increase the accuracy of your tracking of what is and isn’t in your MRO to over 99%. Additionally, since you are not physically running counts, you can conduct them on a more regular basis such as on a monthly basis or every three months without sacrificing time as well as employees that should be working on more value-added tasks.

The hardware required to implement RFID is a one-time cost with no upkeep required to keep it running.  From start to finish the process typically requires 6-9 months. An actual count conducted using an RFID system only requires one individual in the facility for a day. When those involved are invested in the move to tagging items and understand how this will be beneficial to them individually as well as the company’s bottom-line, they are willing to commit to the process, even having an initial “tagging party” the day that the RFID tags are received and ready to be utilized in the MRO facility.

Finally, whereas before it may have taken you hours if not days to find a specific part that you desperately needed to fix a machine, after you’ve tagged each item and installed the RFID reader, the Geiger reader on your hand-held device can allow you to locate that missing piece within moments. This means a higher amount of “wrench time” and shortened machine downtime ­– in other words, less revenue lost.

Stan Marshall is a consultant who partners with companies and solopreneurs to improve their management of supply chain and business activities. After spending nearly three decades working in Supply Chain for a multibillion-dollar company, Stan knows what truly drives value-added activities, improved reliability, and supply chain improvements.   It’s all about how well you connect with the vision of the company and the people you’re trying to help that make us successful.