First, a lesson in Lexicography
Lexi-what!? Don’t be alarmed. This blog is not as boring as it sounds, especially if you are involved in manufacturing. Lexicography is the art of compiling, writing and editing dictionaries. Sounds like a ton of fun, but let’s move quickly to the point to prevent nausea or inducing sleep. Value, according to dictionary.com when used as a noun, is defined as relative worth, merit, or importance. Notice, the lexicographer mentions nothing about cost.
Tracking valuable assets using RFID within the walls of a plant has become common practice for many organizations. Tracking fork trucks, specialized equipment, machinery and other high cost items are a no-brainer. However, experienced users of RFID technology have realized that it is important to know the location of a high cost asset, but it is paramount to know the location of a high value item.
Defining the VALUE of assets (tools, measurement and calibration devices, specialized machines etc.) can be a tricky game. Conversely, it is not difficult to record the cost of an asset on a balance sheet. A tool which has a cost of $50 doesn’t have a VALUE of $50.
Do you really know what your assets are worth? Is your $50 tool worth hundreds, thousands, or even millions? How is that possible? This is fairly straight forward. If that tool is an integral part in the operation of the manufacturing line then every minute that tool is “missing” is a minute of downtime. How much does a minute of downtime cost your company? How much does an hour of downtime cost your company? Does this tool help your final product conform to standards? What is the cost of nonconformance? What are the financial implications of a product recall? These questions need to be addressed when determining whether or not you should track your assets.