What is Asset Tracking, and How Does It Work?
Creating accurate asset registers, reducing costs, and improving inventory management are just a few of the many benefits that asset tracking tools can offer a business. With the advancement in IoT, tagging, and cloud-based software, tracking is becoming an easy-to-use and essential part of all asset-intensive organizations. So much so that the global market share is estimated to be worth $36.3 billion by 2025.
What Is Asset Tracking?
For all asset-intensive businesses that rely heavily on equipment to generate revenue, good asset management is essential. Whether that be stock, equipment, vehicles, or infrastructure. Without it, businesses not only risk being left behind by more advanced-thinking competitors but they’ll also incur expenses that eat into profits.
One of the most effective ways to overcome these issues is through asset tracking.
Typically, the purpose of asset tracking is to answer the question; “how much of (something) do I have?”. But, with various tagging tools and computerized systems now available, asset tracking has become so much more. Today, it can be used for:
- Automating inventory management
- Calculating depreciation values
- Monitoring conditions
- Scheduling maintenance
- Achieving compliance
- Improving lifecycle management
Modern tracking tools most prominently come in the form of Asset Tracking Software, which digitalises data into one easy-to-access database; also known as a fixed asset register. A fixed register consists of all types of data including purchase costs, real-time locations, location history, user history, and maintenance history.
How Does Asset Tracking Work?
The basis of being able to track fixed assets is through the use of tagging tools. These tools come in the form of RFID tags, barcodes, QR codes, GPS, NFC, and Bluetooth. The way each tagging tool operates vary, but they all ultimately have the same outcome; assigning each asset with a unique identification code.
The process of tracking assets can be broken down into four stages:
- Record all fixed assets into a system
- Attach relevant data
- Tag assets with chosen tagging technology
- Monitor and track assets in real-time
Asset tracking tools can be used in various ways for a multitude of different processes. For instance, small businesses such as brick and mortar retailers will use tracking tools for stock control purposes. Whereas organizations such as manufacturers will utilize a tracking system to monitor their supply chain.
The Advantages of Tracking Assets
Each functionality of an asset tracking tool is built around the overall goals of reducing costs and improving efficiency. This results in a variety of benefits that asset-intensive businesses can achieve.
Increase Visibility of Physical Assets
The most obvious benefit of a tracking solution is to provide reliable monitoring of physical assets. This is achieved by creating a fixed asset register that is packed full of data. This enables users, from small business owners to enterprises, to keep close track of items as they move throughout the workplace and between sites.
Improve Data Accuracy
Accurate data holds the keys to unlocking the full potential of asset tracking. Whereas using error-prone spreadsheets to collect information can be troublesome, tracking tools provide the platform to increase accuracy. The allows decision-makers to be confident in their decision, knowing that they’re working form accurate information. It’s also handy when generating inventory reports that will be used for budgeting, compliance, and insurance purposes.
Automate Inventory Management
Inventory management can be a time-consuming and costly operation for most business. But, the process of manual inventory counts are quashed with asset tracking. In fact, it’s as simple as correlating the data stored in an asset register with the identification codes of physical equipment. This can even be taken a step further by automating the purchasing of inventory when a low stock level trigger is initiated.
Identify and Remove Ghost Assets
One factor that has an underlying impact on costs is the presence of ghost assets; physical items that have been lost or stolen but still reflect on inventory records. The most efficient way to eliminate ghost assets is with the use of tracking tools. Once assets are scrapped or sold, it will be automatically reflected on the system and assets can be removed from the books.
Reducing Costs Associated With Loss and Theft
The cost of replacing lost and stolen assets has a direct impact on business spending. This prominently occurs as stock, spare parts, equipment, and tools are moved around the property without being monitored. Effective tracking tools help to eliminate this problem and reduce costs associated with replacing assets.
Types of Asset Tagging Tools
To utilize the functionality of tracking assets, it’s important to take advantage of asset tagging tools. These tools help to assign unique identifiers to items and start the process of tracking. But, when it comes to asset tagging technology, there are a few options to choose from.
The process of RFID (radio-frequency identification) asset tracking is a popular choice for businesses with a wide range of assets. It enables users to accurately track data in real-time and collect data from more than one tag at once, as opposed to having to be in the line of sight. Making it a time-efficient and reliable tagging technology to use.
Barcodes and QR Codes
Being affordable and easy-to-use, asset tracking with barcodes and QR codes is a widely adopted process. They can be affixed to all types of physical assets and scanned with either a reader or a mobile device. They’re also easy to print and assign, making them a smart cost-efficient choice for smaller businesses.
GPS (global positioning system) trackers work by communicating with satellites that orbit the earth to triangulate an exact position. Although not useful inside buildings, GPS trackers provide an accurate RTLS (real-time location system) and are ideal for tracking large moveable assets such as equipment and vehicles.
Similar to RFID tagging, NFC (near field communication) is an asset tracking solution that requires a signal to be sent from a tag to a device. Being a widely-adopted technology, mostly for payment processes, NFC tags require only a modern smartphone to operate.
Who Benefits Most From Tracking Assets?
The process of asset tracking has long been implementing across various industries that rely on their assets for generating revenue. The benefits of greater visibility, accuracy, and efficiency have been a draw for all types of business; big and small.
Logistics and Warehousing
Asset tracking is the most emerging technology in the logistics and warehousing industry. It is used in the loading and unloading of cargo areas, as well as tracking carriers with GPS in the transportation sector.
When it comes to the warehousing, each commodity can be tracked. For instance, when cargo is stored in a warehouse, tracking technology can provide the exact location of each item. This eliminates the manual inventory control process and also reduces human error.
The world’s largest warehouses, such as Amazon, use RFID and barcode tagging. With these tools, almost all warehouse processes are automated. Each item is monitored when inside the warehouse until it leaves the premises.
Hospitals and Healthcare Facilities
Healthcare is a major industry that benefits from the use of asset tracking tools throughout its various medical facilities. Whether that be drug manufacturers, suppliers of medical equipment, or private and public healthcare facilities such as the NHS.
As well as increasing patient care, a challenge facing the healthcare sector is to reduce its excessive spending, which totalled £214 billion in the UK in 2018. Replacement costs of equipment and wasted nursing hours make up a large portion of this expenditure.
With the use of tagging tools such as barcode and RFID, vital equipment can be logged in an accurate asset register. Making it easier than ever to monitor and track important equipment in real-time. With nurses spending around 6,000 hours a month searching for equipment, the use of real-time asset tracking is crucial.
Tracking technology in retail stores and warehouses can be traced back to 2004 when American retail juggernaut Walmart spent $500 million on an RIFD initiative. This sparked a mass adoption of asset tracking in the retail industry, which benefited a majority of UK organisations.
For instance, Marks and Spencer installed an RFID inventory management system back in 2001 that increased sales by 5.5%. Clothes retailer River Island also deployed an RFID system that saw its stock accuracy rise from 70% to 98%.
Whether a brick and mortar store or an online e-commerce operation, it’s important for retailers to have greater visibility of their assets. With asset tracking, retailers can start to see an improvement in their entire operations. Not just for inventory management and security purposes, but for improving the overall customer service experience too.