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Some businesses, such as those in the transportation, shipping, logistics and distribution industries, manage thousands of assets — everything from trucks to cartons loaded with goods. Keeping track of the whereabouts of individual assets can be one of the biggest supply chain challenges.

Emerging asset-management technologies such as real-time location systems (RTLS) can help companies gain greater visibility of those assets and as a result run more-efficient supply chains. In some cases, these systems they can replace the labor-intensive, manual processes of tracking objects.

There’s a growing market for such technology, according to industry research. “In our recent research into real-time location systems for field service, we found a relatively small percentage of field service companies using GPS [global positioning systems] and RFID [radio frequency identification] to enable real-time locating of mobile assets,” says Russ Klein, vice president and research development senior analyst, emerging technologies and information systems, at Aberdeen Group. “However, there is a strong indication that the adoption rate will double in the next 12 months and continue to be steady for the coming two years.”

Among the key drivers for the adoption of this technology, Aberdeen says, are customer demand for faster service response times, increasing cost pressures on service organizations, customer needs for improved asset performance, inadequate workforce utilization due to inefficient task scheduling, and a need to track assets for security.

Which locating technologies are best depends greatly on the business process being addressed, Klein says. “It is difficult to generalize because the definition of a moving asset varies widely by industry and throughout the supply chain,” he says. The definition of a moving asset can include coal miners, rail cars, bottles of pills, forklifts, aircraft engine components, plastic tubs, sheets of glass or metal, or even hand tools, Klein says. “The technology solution best suited to one may be completely inappropriate to another,” he says.

Real-time location systems are showing a lot of promise, especially in industries such as health care, manufacturing and logistics. The systems employ radio signals to transmit the physical location of a tagged object in real time or near real time. The key components of RTLS include RFID tags that are attached to whatever is being tracked; RF transmitters and receivers placed throughout an area in which objects are being tracked; and software for the tracking application. Many of the systems use battery-operated tags, such as active RFID tags.

“Generally speaking, in any industry, the [return on investment] for RTLS when applied to asset tracking takes the form of enhanced process visibility and the improved ability to measure the key performance indicators that must be understood before process improvement can take place,” Klein says. For example, he says, at a manufacturing company, RTLS improves the ability to measure asset counts, turn rates, loss rate, sources of bottlenecks, request-to-resolution time and reason for failure.

There are challenges with RTLS. The technology is relatively new, some systems are costly and standards for systems’ interoperability continue to emerge. Nevertheless, location technologies such as RTLS are expected to play an increasingly vital role in supply chain management.

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