RFID might not save in labour costs to your bottom line but it can increase the efficiency of your business in diverting time away from non income producing tasks.

If you currently spend 2 hours a day in an office preparing reports following service activities on site, the act of preparing these reports, while essential, detracts from the time you could spend on another site generating the income and data for yet another report.

Through the introduction of RFID we can automate the collection and reporting of data. The cost of this is an investment not in saving money on labor but in allowing labour to be diverted to tasks which generate income for the business, time on site actually doing the work.

Just because you don’t have to be in the office for 2 hours a day makes no difference to your bottom line so if I tell you you will be saving money in labor I would be lying. If, through technology such as RFID, you had an extra 2 hours a day that you did not have to spend in an office on reporting you would most likely spend this on site hence no savings in labor costs.

Where the return on your RFID investment comes is it allows for the redirection of labor costs from income draining activities (i.e. time to prepare reports) to income producing activities (i.e. time on site).

Let’s make the following assumptions;

  1. There are 5 days in a working week
  2. The average working day is 8 hours
  3. We spend, on average, 2 hours each working day on report generation in the office
  4. Average income generated from 1 hour on site is $50.00

Now let’s assume we have automated your reporting. This in effect has given you an additional 10 hours of site time (i.e. 2 hours per day for 5 days).

Your labour costs are the same but in having an additional 10 site hours for the week this would translate into additional income of $500.00 (10 hours per week x $50 per hour).

Over a 12 month period this would equate to a potential $26,000 of additional income without having to increase the labour input, just putting your labour to better use in income generating activities.

From this example you can see that there are no savings in labour costs but through smarter utilization of the labour we already pay for we can generate additional income by concentrating labour on activities that generate income as opposed to draining income.

Could you do with an extra $26,000 a year without working any harder than you are already?

Embracing technology is a difficult thing in that it is difficult if not impossible for someone to truly quantify the dollar benefit you will achieve through the technology but I hope this example shows you what could be possible with RFID technology.

Don’t just think in terms of labour cost savings because you probably won’t find them. Think in terms of where your existing labour costs could be better focused and how technology can assist in diverting labour costs from non income producing activities to income producing activities.

If you found this article useful or otherwise please provide comments or suggestions so I can improve on future posts.

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