Real-Time Location Systems (RTLS) have become indispensable for industries seeking to optimize operations, improve safety and compliance, and reduce costs. However, investing in an indoor RTLS system requires a clear understanding of the return on investment (ROI). Some projects never see the light of day due to their lack of a clear business case and ROI. Evaluating ROI is essential to ensure your investment aligns with your operational goals and delivers tangible value in the short and long term.
In this blog, we’ll break down the key components, benefits, and tools for calculating ROI for indoor RTLS systems, helping you make informed decisions.
Key Components of ROI for RTLS Systems
- Initial Investment Costs
- Software Costs: Licensing fees, installation, and integration with existing systems.
- Implementation Costs: Setup, calibration, and employee training.
- Recurring Costs: Recurring licenses, maintenance, and regular updates
2. Tangible and Intangible Returns
- Tangible Returns: Cost savings from optimized processes and reduced downtime.
- Intangible Returns: Enhanced safety, compliance, and employee satisfaction.
Advanced ROI Considerations by RTLS Technology
Different RTLS technologies affect ROI in unique ways:
- Ultra-Wideband (UWB): Provides high accuracy and low latency, ideal for industries like manufacturing and healthcare, but involves higher initial costs.
- Bluetooth Low Energy (BLE): Cost-effective for moderate accuracy, often used in retail and inventory tracking.
- Wi-Fi and RFID: Leverage existing infrastructure to reduce costs but may have limitations in precision or scalability.
- Chirp Spread Spectrum (CSS): Emerging as a cost-efficient option for large-scale, high-range deployments.
Choosing the right technology ensures the ROI aligns with operational needs and budget constraints.
Measuring Cost Savings with RTLS
Inventory Management
- Eliminate misplaced or lost inventory with real-time tracking.
- Reduce excess stock by maintaining accurate inventory levels.
- Reduce audit and costly plant shutdowns for manual inventory counts
Equipment and Asset Utilization
- Monitor and measure asset usage to identify underutilized equipment.
- Extend the lifecycle of assets with preventive maintenance.
Labor Efficiency
- Reduce search times for assets and inventory.
- Automate routine tasks, allowing employees to focus on high-value activities.
Operational Efficiency Gains
Process Optimization
- Streamline workflows by analyzing movement patterns and bottlenecks.
- Optimize material flow and resource allocation.
- Automate manual processes using location
Safety and Compliance
- Monitor safety zones and prevent unauthorized access with geofencing.
- Track and enforce compliance with operational standards.
Scalability: A Long-Term ROI Factor
- How RTLS Systems Scale with Business Growth:
Add new tags or expand tracking areas seamlessly as your use cases and operations grow.
Future-proof your investment with scalable technologies like UWB or BLE, which offer long-term value as they adapt to evolving requirements.
- Total Cost of Ownership (TCO)
Factor in the lifecycle costs of RTLS, including future upgrades, replacement tags, and integration with new systems.
Tools and Methods to Calculate ROI
ROI Formula
ROI = [(Net Benefits – Total Costs) / Total Costs] x 100
Key Metrics to Analyze
- Reduction in Search Time: Quantify time saved by employees in locating assets.
- Decrease in Downtime: Measure the impact of faster maintenance and issue resolution.
- Improvement in Asset Utilization: Compare pre- and post-implementation usage rates.
Conclusion
Calculating ROI for indoor RTLS systems involves evaluating initial costs, operational expenses, and the tangible and intangible benefits the system brings to your operations. A tailored ROI analysis ensures you make the most of your investment, driving efficiency, safety, and scalability
