RFID Inventory Tracking – RFID Inventory Management Case Study

RFID inventory tracking was essential for Eskimo Cold Storage to implement in their cold storage warehouse. They turned to their warehouse management system software partner Datex Corporation who helped them create RFID inventory tracking at the pallet level. In this 2014 IARW presentation, Eskimo Cold Storage describes their problems tracking their cold storage warehouse inventory and the solution provided by Datex Corporation’s Footprint 3PL WMS warehouse software. Eskimo was pleased that they saw a postive ROI in only 4 months after implementation. What we found going through some of the numbers and talking with the people involved with the Eskimo operation, it’s about 3% of the pallets per year that would actually be mishandled without rfid inventory tracking. So but it still came out to be a pretty hefty number, it’s over 4000 pallets. So this is when we zeroed in on the lost pallets at picking, the pallets obviously handled per year is 139,000, 3% is 4176, they’re paying the workers around ten dollars an hour with, you know, the benefits and taxes and things that they have to pay. The picking cost, normally for a pallet, is about $3.13, it’s pretty simple, it’s right there, you just time and motion it out. But then also when you have to add in the time to find a misplaced pallet, it takes four hours on average. And that’s a lot of time to have one or even sometimes two people on forklifts running around a warehouse looking for, what is it 33,000 pallets, 32,000 pallet positions? And then the picking cost per lost pallet comes out to be $50 so every time they have to find a lost pallet, it costs them $50. Not yet alone, the lost opportunity cost to have that forklift actually doing something productive, not just trying to find the lost pallet. So lost dollars per year as we estimated it, it’s right at $208,000 or $209,000 and then you add that in with the chargebacks per year and get the $25,000 on there.