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RTLS ROI, a practical example

Cutting-edge tech is not something chosen, integrated and implemented lightly.   Companies are motivated by calculable, quick-turn return on investment.   So, how should you start to think about cost savings and revenue growth?

The most simple thought starter is to calculate some basic time savings.  Time is money, after all!

Let's say a manufacturing company has 5,000 assets, including machines, tools, high value material, and vehicles. On average, it takes a maintenance craftsperson 30 minutes to locate a specific asset, resulting in an estimated labor cost of $15 per search (assuming a labor rate of $30/hour).

A Lost item can be a pain to find, but the person searching for the item is rarely the only one burning minutes.   Missing a critical tool, machine, or high value asset can often be a job stopper, halting many other processes and workflows, keeping many other people waiting.

A search-and-find function within an RTLS system often reduces the time it takes to locate assets to a few minutes or less!  Some simple math tells us that if search time is reduced to 5 minutes, conservatively, then the craftsperson has just freed up 25 minutes of time.  This represents a real savings of $12.50 PER SEARCH!

If the manufacturing company performs an average of 100 asset searches per day, the total cost savings from using RTLS would be $1,250 per day, or $31,250 per month.

Assuming the cost of implementing an RTLS system is $100,000, the company would achieve a positive ROI in just over three months.

This is just one very simple example of how RTLS can provide a viable, quick-turn ROI for businesses.

There are dozens of other calculable outcomes that can amplify profitability improvements when RTLS is embraced!  

  • Reduced Operating Costs:   Labor, Material and Overhead
  • Increase Asset Efficiency:  Reduce equipment downtime, reworks, compliance costs, accelerate on-time delivery
  • Enhance Revenue Growth:  Reduce general downtime and cycle time, Increase unit throughput, offer better support for customization.
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