The ROI For Automatic Container Tracking Using RFID

Abstract
An RFID system was implemented in 2005 at a chemical facility plant to track the entry/exit of reusable containers, also known as Intermediate Bulk Containers (IBC), shipped on trucks and rail cars. The system was implemented to automatically account for the pool of containers, a portion of which were regularly missing, returned late, or damaged by customers. A secondary consideration was the reduction of the total pool of assets as a result of the new visibility, and a reduction of labor associated with the automated management of the pool.

The semi-active, ActiveTag system from AXCESS International was selected because the tags could be automatically activated at the entry/exit points, and therefore required no human intervention as with passive or semi-passive systems. The battery-powered semi-active tags provided highly reliable tag reads off the metal IBC container surface. And, the network-based reader infrastructure that was implemented was low cost, low maintenance, architecturally unobtrusive and aesthetically pleasing. AXCESS' enterprise application tracking software (Online Supervisor) enabled the user to integrate the data seamlessly with their inventory accounting system. This software solution was designed to manage multiple container locations, enabling access from multiple sites.

This paper provides a financial analysis of the business case for semi-active RFID based on the costs found in the study and therefore associated with managing a pool of containers in a closed-loop environment. The case included 3500 IBC's at a facility with 4 different entry/exit points. Assuming only a 1 percent reduction of missing containers, (industry statistics have shown asset shrinkage due to leakage, sub-pooling and non-returns to be typically 2 percent, but as high as 10 percent) the study identified a reduction of the shrinkage of assets to be more than $87,000 per year.