RFID in Textiles: Exploring Inventory Conversion
By Ammar Khan, CEO at Calderon Textiles
As referenced by Jack Morgan in his August 2023 TRSA article “Flatwork Tagging Coming of Age,” the first wave of laundry operators to implement RFID-enabled operations have experienced significant cost reductions and efficiencies, specifically “significant savings on textile ordering, recovery of missing rental goods, fewer return trips by route service reps (RSRs), and reduced staff work related to shortages.”
However, converting a laundry to RFID-enabled operations is a tremendous undertaking. Strategies must be developed for addressing new processes within software/route accounting systems and laundry operations, sourcing of hardware chips, and inventory conversion. Assigning inventory to clients and billing the critical mass of products needed means a majority percentage of your stock must have RFID capability. If your goal is to have your inventory RFID-enabled ASAP, the change will be expensive; the most cost-effective means will take both time and attrition. So, what are the considerations to developing your inventory conversion strategy?
Benefits of Converting Inventory to RFID-Enabled
The benefits of converting a laundry operation’s inventory to an RFID-enabled system are clear. RFID-enabled technology:
- ensures a dedicated inventory,
- efficiently details the correct quantity of product for weekly routes,
- enables the tracking of products and customers with the highest losses,
- supports transparency in product availability, thus enhancing customer satisfaction, and
- has the potential to streamline billing and revenue processes.
Converting Existing Products into RFID-Enabled Inventory
If you are planning to use RFID technology for one or more of the above reasons, you will need to transition your entire inventory to RFID-enable. There are three main approaches to consider. 1) You can self-install the necessary tags on products in-house. 2) You can outsource the installation of the tags of your current inventory. 3) You can replace current inventory as they age out with products that are already RFID-enabled. Each method has its pros and cons. Let’s take a deeper look at each of the three options.
Self-installing the tags in-house involves using your staff to complete the task. Typically, laundry operations start by tagging garments, mats, and then inventory items from most to least expensive (e.g., table linen to sheets).
On the plus side, self-installation offers flexibility, convenience, speed, and is more cost-effective than immediately replacing your entire inventory with RFID-pre-tagged items. In terms of flexibility and convenience, staff could be assigned tagging duties during downtime, working on available items and not disrupting rotating operational needs. Once you purchase the sewing equipment and train your staff, you can utilize them to begin tagging. This training helps to build competency for when product maintenance is required and ensures all circulating inventory is tagged and retagged as and when needed.
There is a downside to self-installing the tags that touch on management issues, labor concerns, the need for up-front capital, and floor space. For extensive inventories, this can be an overwhelming project requiring skill, training, a learning curve for staff. Purchasing the necessary equipment can be expensive. Tagging each linen piece demands rigorous organization. Each RFID tag must be sewed into the product and assigned within the software program. Moreover, the maintenance and potential upgrades of the system can be a continuing cost. Another major disadvantage to self-installation is that a dedicated space will be needed to accommodate the tagging process, especially if you are dealing with a large inventory. This can take up valuable real estate on your wash floor.
The second option, outsourcing the tag installation of your existing inventory, can get the job done quickly—generally within two to four weeks depending on the scope of the project and size of the inventory. Outsourcing can be more cost-effective in comparison to self-installation in that equipment investment is minimal; although freight costs should be factored in and will change the equation. As far as convenience goes, outsourcing can be a turnkey operation with no need to involve laundry staff or management.
A major downside to outsourcing tag installation is the complex planning needed to schedule available inventory for tagging without disrupting stock requirements.
The third option is to purchase products already RFID-enabled. Replacing inventory can be executed wholesale by obsoleting existing circulating items and changing over to new RFID-enabled products all at once. Or the process can be completed over time as items are discarded and replaced with RFID-enabled equivalent products.
Purchasing RFID-enabled inventory replacements over time is manageable and spreads the cost out incrementally. This makes it more cost-effective as compared to other tagging strategies. However, replacing inventory over time on an as-needed basis can be a long-term proposition. Given the seasonal nature of large table linen rentals, as well as product durability, restocking table linens on an as-needed basis could potentially take years to convert your entire existing inventory to the RFID management system.
If you are considering a wholesale replacement of existing inventory with RFID-enabled products, there is one method that will accelerate the process and reduce the expensive venture—a Container Program. Using a container program to get your inventory RFID-tagged is more economical, but requires forecasting, based on anticipated replacements of inventory. Disadvantages include leadtimes for the inventory to arrive, forecasting accuracy, and large investment chunks; but it is a clever strategy when considering changing out large amounts of inventory.
A Hybrid Solution to Converting to RFID Inventory Management
The ideal solution to converting your laundry’s inventory management to an RFID-enabled system will naturally be one that aligns with your laundry’s objectives. What is your priority? Is it speed of conversion? Or cost considerations when initiating the RFID technology? Or a combination of startup speed and cost-effectiveness?
For a hybrid solution to converting to an RFID inventory management system, consider combining elements of the three options. Here is one example:
- Quick table linen conversion, outsourced.
- In-house inventory modification for smaller items.
- New acquisitions for terry products.
Note that replacing current inventory with the more expensive RFID-enabled products can actually save you money. It can be more costly in the long run to have stock go untagged, even compared to the initial investment needed to tag existing inventory in-house or to outsource the project.
In Summary
In the evolving world of laundry operations, it is becoming clear that RFID technology is the driver that will allow businesses to streamline operations, ensure accuracy, and more effectively bill and collect revenue transparently, thus propelling a stronger and more viable company.
RFID conversions will require a strategy as it pertains to software/route accounting systems, laundry operations, sourcing of hardware chips and inventory. The investigation into inventory conversion approaches outlined above offer considerations based on individual needs, on inventory sizes, and on investment capability. Whether opting for self-installation, outsourcing, or considering a hybrid model, the goal is to achieve operational efficiency and maximize RFID investment.
As you embark on the RFID journey, weighing the pros and cons of each conversion approach will help you develop your strategy and choose the path that best aligns with your operational goals and financial considerations. The future of laundry operations is undeniably entwined with RFID technology, and making informed decisions now will set the stage for success in the years to come.