Determining the value of asset location information systems in a manufacturing environment

The efficiency of manufacturing operations is often seriously affected by significant amounts of time spent searching for misplaced assets. Real‐time location systems (RTLS) provide a promising approach for reducing wasted time. Given the difference in information precision and system costs, the quantification of the expected benefits from these systems is a challenging task. In this paper we present an analytic method for calculating the expected savings from a location information system and we demonstrate this through a case example. The model enables us to compare different location information systems and provides insights into the factors that affect the value that each system delivers.