Automated asset inventory system

              AUTOMATED ASSET
INVENTORY SYSTEM
Final Report 580
Prepared by:
Andreas Schiffer
Bar| Scan, Inc.
31200 Via Colinas, Ste 202
Westlake Village, CA 91362- 3939
Telephone: ( 800) 414- 7226
Facsimile: ( 818) 991- 7014
www. bar- scan. com
April 2006
Prepared for:
Arizona Department of Transportation
206 South 17th Avenue
Phoenix, Arizona 85007
in cooperation with
U. S. Department of Transportation
Federal Highway Administration
The contents of the report reflect the views of the authors who are responsible for
the facts and the accuracy of the data presented herein. The contents do not
necessarily reflect the official views or policies of the Arizona Department of
Transportation or the Federal Highway Administration. This report does not
constitute a standard, specification, or regulation. Trade or manufacturers’
names which may appear herein are cited only because they are considered
essential to the objectives of the report. The United States Government and The
State of Arizona do not endorse products or manufacturers.
ACKNOWLEDGEMENTS
The author would like to thank Project Manager John Semmens, of the Arizona
Department of Transportation, for his good will and guidance, as well as Theresa Simms
and Richard Neshwat for their support and feedback. Such research would be impossible
without the gracious cooperation of willing participants.
Technical Report Documentation Page
1. Report No.
FHWA- AZ- 06- 580
2. Government Accession No.
3. Recipient’s Catalog No.
4. Title and Subtitle
5. Report Date
April 2006
AUTOMATED ASSET INVENTORY SYSTEM 6. Performing Organization Code
7. Authors
Andreas Schiffer
8. Performing Organization Report No.
9. Performing Organization Name and Address
Bar| Scan, Inc.
31200 Via Colinas, Ste 202
Westlake Village, CA 91362- 3939
10. Work Unit No.
12. Sponsoring Agency Name and Address
ARIZONA DEPARTMENT OF TRANSPORTATION
206 S. 17TH AVENUE
PHOENIX, ARIZONA 85007
11. Contract or Grant No.
SPR- PL- 1-( 63) 580
Project Manager: John Semmens 13. Type of Report & Period Covered
FINAL
15. Supplementary Notes
14. Sponsoring Agency Code
16. Abstract
This report was prepared for the Arizona Department of Transportation ( ADOT), to explore options for
implementation of a barcode inventory system to track fixed assets on an organization- wide basis. ADOT
currently has no department- wide automated fixed asset inventory process nor does it use barcode or other types
of technology to track fixed assets. ADOT currently relies on manual inventory methods to maintain their fixed
asset information in their fixed asset accounting software.
Information on label and ID technologies, bar code hardware and scanning technologies, software applications,
and a Pilot implementation are discussed.
Since the Pilot Implementation showed that an automated asset inventory system can reduce the amount of time
needed to perform a physical inventory as well as increase the accuracy of the results, it is recommended that
ADOT further study the automated technology in conjunction with one of the three implementation strategies
presented in this report.
It is the author’s opinion that Strategy Three, the implementation of moderate barcode technology and web or
network based data collection, would best suit ADOT’s infrastructure. It offers the benefits of both Browser
Access as well as barcode technology without committing to a dedicated centralized inventory staff. To recap,
Browser Access can be advantageous under a number of situations previously discussed in this report.
17. Key Words
Barcode inventory, asset management, bar code
hardware, bar code software, bar code label
18. Distribution Statement
Document is available to the
United States public through the
National Technical Information
Service, Springfield, Virginia
22161
23. Registrant’s Seal
19. Security Classification
Unclassified
20. Security Classification
Unclassified
21. No. of Pages
39
22. Price
SI* ( MODERN METRIC) CONVERSION FACTORS
APPROXIMATE CONVERSIONS TO SI UNITS APPROXIMATE CONVERSIONS FROM SI UNITS
Symbol When You Know Multiply By To Find Symbol Symbol When You Know Multiply By To Find Symbol
LENGTH
LENGTH
in inches 25.4 millimeters mm mm millimeters 0.039 inches in
ft feet 0.305 meters m m meters 3.28 feet ft
yd yards 0.914 meters m m meters 1.09 yards yd
mi miles 1.61 kilometers km km kilometers 0.621 miles mi
AREA
AREA
in2 square inches 645.2 square millimeters mm2 mm2 Square millimeters 0.0016 square inches in2
ft2 square feet 0.093 square meters m2 m2 Square meters 10.764 square feet ft2
yd2 square yards 0.836 square meters m2 m2 Square meters 1.195 square yards yd2
ac acres 0.405 hectares ha ha hectares 2.47 acres ac
mi2 square miles 2.59 square kilometers km2 km2 Square kilometers 0.386 square miles mi2
VOLUME
VOLUME
fl oz fluid ounces 29.57 milliliters mL mL milliliters 0.034 fluid ounces fl oz
gal gallons 3.785 liters L L liters 0.264 gallons gal
ft3 cubic feet 0.028 cubic meters m3 m3 Cubic meters 35.315 cubic feet ft3
yd3 cubic yards 0.765 cubic meters m3 m3 Cubic meters 1.308 cubic yards yd3
NOTE: Volumes greater than 1000L shall be shown in m3.
MASS
MASS
oz ounces 28.35 grams g g grams 0.035 ounces oz
lb pounds 0.454 kilograms kg kg kilograms 2.205 pounds lb
T short tons ( 2000lb) 0.907 megagrams
( or “ metric ton”)
mg
( or “ t”)
Mg megagrams
( or “ metric ton”)
1.102 short tons ( 2000lb) T
TEMPERATURE ( exact)
TEMPERATURE ( exact)
º F Fahrenheit
temperature
5( F- 32)/ 9
or ( F- 32)/ 1.8
Celsius temperature º C º C Celsius temperature 1.8C + 32 Fahrenheit
temperature
º F
ILLUMINATION
ILLUMINATION
fc foot candles 10.76 lux lx lx lux 0.0929 foot- candles fc
fl foot- Lamberts 3.426 candela/ m2 cd/ m2 cd/ m2 candela/ m2 0.2919 foot- Lamberts fl
FORCE AND PRESSURE OR STRESS FORCE AND PRESSURE OR STRESS
lbf poundforce 4.45 newtons N N newtons 0.225 poundforce lbf
lbf/ in2 poundforce per
square inch
6.89 kilopascals kPa kPa kilopascals 0.145 poundforce per
square inch
lbf/ in2
TABLE OF CONTENTS
EXECUTIVE SUMMARY......................................................................... 1
KEY FINDINGS......................................................................................................... 1
KEY RECOMMENDATIONS................................................................................... 1
INTRODUCTION....................................................................................... 3
BACKGROUND ........................................................................................................ 3
SCOPE........................................................................................................................ 3
METHODOLOGY ..................................................................................................... 3
OVERVIEW............................................................................................................... 3
CURRENT ADOT FIXED ASSET INVENTORY PROCESS ................. 5
INTRODUCTION ...................................................................................................... 5
ON SITE INVENTORY OBSERVATION................................................................ 6
TECHNOLOGY AND LITERATURE REVIEW...................................... 9
INTRODUCTION ...................................................................................................... 9
LABEL AND ID TECHNOLOGY ............................................................................ 9
BAR CODE AND RELATED HARDWARE ......................................................... 12
Introduction........................................................................................................... 12
Hardware Portability............................................................................................. 12
Hardware Durability ............................................................................................. 13
Scanning Technologies ......................................................................................... 13
Auxiliary Data Entry............................................................................................. 14
Radio Frequency Identification............................................................................. 14
Wireless Local Area Network............................................................................... 15
Summary of Hardware Requirements for Asset Inventory................................... 16
PRE- PACKAGED AND SEMI- CUSTOM APPLICATIONS ................................ 17
Case Studies .......................................................................................................... 17
Vendor Search....................................................................................................... 18
Browser Based Data Access ................................................................................. 20
PILOT IMPLEMENTATION................................................................... 21
SELECTION OF STRATEGY................................................................................. 21
SELECTION OF TECHNOLOGY FOR PILOT ..................................................... 25
DEPARTMENTAL CANDIDATES........................................................................ 26
PILOT IMPLEMENTATION FINDINGS............................................... 27
SAMPLE RESULTS ................................................................................................ 27
Estimated Annual Cost Benefit............................................................................. 28
Estimated Acquisition Cost for Hardware and Software...................................... 28
Estimated Annual Maintenance Expense and Life Expectancy ........................... 29
CONCLUSIONS AND RECOMMENDATIONS ................................... 31
INTRODUCTION .................................................................................................... 31
CONCLUSIONS....................................................................................................... 32
RECOMMENDATIONS.......................................................................................... 32
APPENDIX A ........................................................................................... 33
LIST OF TABLES
Table 1. On Site Observation Sample............................................................. 7
Table 2. Vendor / Product Matrix................................................................. 19
Table 3. Pilot Implementation Sample. ........................................................ 27
Table 4. Implementation Cost....................................................................... 29
GLOSSARY OF ACRONYMS
ADOT Arizona Department of Transportation
ASTM American Society for Testing and Materials
ATRC Arizona Transportation Research Center
AMS Accounting Management System
DoD United States Department of Defense
FAA Federal Aviation Administration
GIAI Global Individual Asset Identifier
GRAI Global Returnable Asset Identification
ID Identification
IEEE Institute of Electrical and Electronics Engineers
IRL Interactive Reader Language
IT Information Technology
JFMIP Joint Financial Management Program
OS Operating System
RFI Request for Information
RFID Radio Frequency Identification
TSA Transportation Safety Administration
UID Unique Identification Initiative
USB Universal Serial Bus
VIN Vehicle Identification Number
WEP Wired Equivalent Privacy
WiFi Wireless Fidelity
WLAN Wireless Local Area Network
1
EXECUTIVE SUMMARY
This report was prepared for the Arizona Department of Transportation ( ADOT), to
explore options for implementation of a barcode inventory system to track fixed assets on
an organization- wide basis.
ADOT currently has no department- wide automated fixed asset inventory process nor
does it use barcode or other types of technology to track fixed assets on an organization-wide
basis. ADOT currently relies on manual inventory methods to maintain their fixed
asset information in their fixed asset accounting software.
Information on label and identification ( ID) technologies, bar code hardware and
scanning technologies, software applications, and a Pilot implementation are discussed.
Sample inventory time data was collected using the current ADOT fixed asset inventory
process. Then, asset inventory software and hardware from selected manufacturers were
procured for a pilot implementation. Another inventory was performed using the
software and hardware and time data was again collected. The results were compared.
Lastly, conclusions and recommendations are provided.
KEY FINDINGS
♦ The Pilot Implementation showed that an automated asset inventory system can
reduce the amount of time needed to perform a physical inventory as well as
increase the accuracy of the results. However, it cannot be concluded that a full
scale implementation of the technology will result in a cost savings.
♦ Because of ADOT’s infrastructure, three different statewide implementation
strategies were detailed. Each strategy had distinct advantages and disadvantages.
♦ The lack of academic journal articles and publicly available data point to a lack of
systematic analysis of fixed assets inventories. However, case studies justify the
use of barcode technology and have shown reduction in the time taken to conduct
periodic asset inventories.
♦ The primary benefit that bar code hardware brings to an asset inventory is its
portability. Newer technology has made this process easier and faster. There were
additional observed benefits of the automation. Finally, with automation, future
inventories will be easier to perform since existing asset tags will contain bar
codes.
KEY RECOMMENDATIONS
♦ The Pilot Implementation showed that an automated asset inventory system can
reduce the amount of time needed to perform a physical inventory as well as increase
the accuracy of the results. It is recommended that ADOT further study the
automated technology in conjunction with one of the three implementation strategies
presented in this report.
2
♦ It is the author’s opinion that Strategy Three, the implementation of moderate
barcode technology and web or network based data collection, would best suit
ADOT’s infrastructure.
♦ A larger study incorporating the Pilot Results with web or network based data
collection would provide additional key information required to justify the
statewide implementation of an automated Asset Inventory System.
3
INTRODUCTION
BACKGROUND
This report was prepared for the Arizona Department of Transportation ( ADOT) to
explore options for implementation of a barcode inventory system to track fixed assets on
an organization- wide basis.
In reference to this study, we are using the term to denote an inventory of durable,
moveable property referred to as “ capital assets and non- capital assets.” Capital Assets
are also referred to as “ Fixed Assets.”
ADOT currently has no department- wide automated fixed asset inventory collection
method nor does it use barcode or other types of technology to track fixed assets on an
organization- wide basis. ADOT currently relies on manual inventory methods to
maintain their fixed asset information in their accounting management system ( AMS)
Advantage Accounting System Fixed Asset module database www. ams. com.
SCOPE
Funding for this research project was $ 9,800. Reviews of academic, government, and
industry literature as well as Internet based research were conducted. As a follow- up to
this study, a Pilot implementation is suggested to validate the cost savings estimated in
this study.
METHODOLOGY
The Project Manager was John Semmens of the ADOT Arizona Transportation Research
Center ( ATRC). The Project Researcher was Andreas Schiffer of Bar| Scan, Inc.
The literature review included business association and company websites, government
reports, industry publications, and publicly available data. Principal sources of study data
include the Arizona Department of Transportation’s Financial Management Services
Section of the Transportation Services Group’s policies and procedures as well as first
hand inventory observation.
Primary online Literature searches used Google ( www. google. com).
OVERVIEW
This report has eight sections:
♦ Executive Summary
♦ Introduction
♦ Current ADOT Fixed Asset Inventory Process
♦ Technology and Literature Review
♦ Pilot Implementation
♦ Pilot Implementation Findings
♦ Conclusions and Recommendations
♦ Appendix A: Product and Vendor Information
4
The Technology and Literature review section contains the most in- depth discussions of
issues, including:
♦ Label and Identification Technology
♦ Bar Code and Related Hardware
♦ Pre- Packaged and Semi- Custom Applications
The Conclusions and Recommendations section makes suggestions for consideration and
briefly discusses their costs and benefits.
5
CURRENT ADOT FIXED ASSET INVENTORY PROCESS
INTRODUCTION
ADOT currently has no department- wide automated fixed asset inventory collection
method nor does it use barcode or other types of technology to track fixed assets on an
organization- wide basis. ADOT currently relies on manual inventory methods to
maintain their fixed asset information in their AMS Advantage Accounting System Fixed
Asset module database www. ams. com.
The manual inventory method relies on traditional checking of items with paper- based
physical inventory reports and validation of human readable asset labels. The ADOT
labels do not contain barcode or other advanced technology. The labels are foil with
pressure sensitive adhesive. When a label is damaged, the asset number is replaced with
a manually stamped foil label with the same number. Due to the lack of label placement
guidelines, labels are applied in a somewhat random fashion.
The inventories are carried out on an annual basis by each Organization within ADOT
during a two- week window prior to the end of the fiscal year on June 30. There are
approximately four to five hundred organizations responsible for a total of approximately
3,900 vehicles, 2,400 federally funded items, and several hundred other capital assets.
The lower threshold of capital assets currently is set at $ 5,000.
In addition to capital assets, ADOT tracks approximately 20,000 non- capital assets,
which consist primarily of Personal Computers with a lower threshold value of $ 1,000.
The data elements relevant to performing the physical inventory at this time are:
♦ A unique human readable serialized ID Tag
♦ Serial Number or Vehicle Identification Number ( VIN) ( when applicable)
♦ Item Description, Make, and Model
♦ Location as of last inventory ( e. g., Room Number, City, other Organization)
♦ Revised Location ( if necessary)
Inventory reports containing the data elements are provided by the Fixed Asset Manager
to each Organization. When the Organization has completed the inventory, the reports
are signed and dated. Lost items are identified on the report. An Avery brand colored
sticker is provided for confirmation and is placed on the physical item during the
inventory to verify that the inventory information was captured. The color of the sticker
is changed from year to year since it is not required that the previous year’s sticker be
removed.
Because of the possible movement of assets during the physical inventory, the total lost
and found items cannot be determined until all inventory reports containing transfers are
returned to the Fixed Asset Manager, all results verified, and changes are keyed into the
Fixed Asset software.
6
ON SITE INVENTORY OBSERVATION
The author performed an on site observation of the physical inventory process during the
annual update on February 28, 2005, meeting with Theresa Simms, ADOT
Transportation Services Group - General Accounting Administrator and Tanya Shearrow
at 206 South 17th Avenue, Phoenix, AZ. The author then observed them performing the
inventory of assets for the Organizations within their responsibility. This inventory was
completed the same day.
Prior to the actual physical inventory, the data collection forms need to be produced. The
process begins with printing and collating the forms for all Organizations. This
preparation takes three to four persons approximately three to four hours in total. The
forms are then distributed.
Each Organization receives an Interoffice Memo “ Annual Inventory of Fixed Assets”
which contains specific instructions on how to complete inventory. Attached to this is a
roll of colored Avery brand dots for application to the asset to denote that it was
inventoried as well as three forms as follows:
♦ “ Lost or Stolen Equipment Report”
♦ “ Inventory Add- ons”
♦ A computer generated list of assets for the Org known as an “ Annual Inventory
Sheet”
Table 1 on the following page is a chart of the observation result. The inventory time
includes travel time within the building as well as the time required to complete the
forms.
7
Table 1. On Site Observation Sample.
On site observation sample
Org Time Number
Code ( minutes rounded up) of Assets
1114 17 19
1030 6 14
1124 5 6
1125 7 6
1121 3 9
1110 2 3
1113 5 5
1111 4 7
1101 3 5
1112 5 13
1021 1 2
1023 10 6
68 95
assets/ min/ team = 1.39
assets/ min/ per person = .695
While ADOT is geographically disbursed and the above sample is not meant to be
representative of all Organizations, it can be used to extrapolate an estimate of the man-hours
required to collect the annual inventory.
Assuming the collection time for all non- vehicle assets at .695 assets per minute per
person and vehicles at .3475 assets per minute ( 200% of non- vehicle assets), the total
time is approximately 765.5 hours ( 22,600 assets at .695 assets per minute = 32,518
minutes plus 3,900 vehicles at .3475 assets per minute = 11,223 minutes) plus an
additional 5% for follow- up time for a grand total of 765.5 estimated man hours. Ninety
to ninety- five percent of the 2004 inventory forms were returned within the inventory
timeframe.
In summary, an estimated 765.5 hours are spent performing the direct task of the current
ADOT annual fixed asset physical inventory. This estimate is not based on a
representative sample and has no statistical significance. However, we will use it as a
benchmark for comparison to an automated inventory as discussed in the Pilot
Implementation section of this report.
Once the inventory data has been collected, it must be verified and entered into the AMS
Advantage Accounting System. This time is in addition to the direct task of the annual
physical inventory. Unless an automated interface is built, this time would be the same
for both this and the Pilot Implementation and therefore, is not factored into the
comparison.
8
9
TECHNOLOGY AND LITERATURE REVIEW
INTRODUCTION
The term “ barcode inventory system” is generic and encompasses a variety of different
applications and industries. The term is commonly used in warehousing, logistics, and
distribution; it can also be used in retail point- of- sale, manufacturing, and various service
sector implementations. In each case, at its core, a “ barcode inventory system” includes a
measurable list of items or quantities and utilizes barcode technology in some fashion.
Barcode technology is a means of interfacing humans to data processing equipment;
therefore, barcode technology cannot be utilized independent of data processing
equipment. Commonly, the data processing equipment stores the results of a “ barcode
inventory system” in electronic form.
In reference to this study, we are using the term to denote an inventory of durable,
moveable property referred to as “ capital assets and non- capital assets.” Capital Assets
are also referred to as “ Fixed Assets.” Although Fixed Assets can also include a larger
set of items such as Real Estate and Infrastructure, these are not included in the scope of
this report. For purposes of this report, we will refer to “ capital assets and non- capital
assets” simply as “ Assets.”
According to the American Society for Testing and Materials ( ASTM), in their Report E
2132- 01 titled “ Standard Practice for Physical Inventory of Durable Moveable Property,”
the “ primary product of a physical inventory is a report identifying, at a minimum, which
items were located and which were not.” 1 Therefore, any technology that assists in
meeting this goal at less than its incremental cost of implementation should be considered
viable.
The components that make up a “ barcode inventory system” are discussed individually in
the next sections. Other technologies are also discussed.
LABEL AND ID TECHNOLOGY
For Assets, barcode technology typically involves the application of some kind of
identification or label. These labels can be applied at any time during the life cycle of the
Asset, even during its manufacture. Labeling an asset with a unique ID has traditionally
been used as a mechanism to both easily identify an Asset and, to a lesser extent, deter
theft or misuse of the Asset.
All companies that the author has worked with during the course of implementing asset
inventory systems ( several hundred Fortune 500 and government entities) have utilized
serial, non- smart numbering schemes.
1 “ Standard Practice for Physical Inventory of Durable, Moveable Property” ASTM International
Designation E 2132- 01 Published February 2001 downloaded September 29, 2004 from www. astm. org
Telephone confirmation with ASTM to use copyrighted text on September 29, 2004
10
The implementation of a new label standard called EAN. UCC Global Individual Asset
Identifier ( GIAI) has been in process over the last several years. The United States
Department of Defense ( DoD) was an early adopter. Other parties who have expressed
interest are the Transportation Safety Administration ( TSA) and the Federal Aviation
Administration ( FAA).
The standard consists of a sequential asset number to which a prefix is added to identify
the company and another prefix to identify the label as a fixed asset label. To properly
use the standard, the company must register with the Uniform Code Council www. uc-council.
org and obtain its own unique company code.
The GIAI standard would be of benefit for any company or government entity that
requires a totally unique asset number, or whose assets are located at non- company
facilities, e. g., Government furnished property at a defense contractor’s site.
Under the Unique Identification ( UID) Initiative, the DoD has asked suppliers to include
a unique identification on products supplied to the government by 2005 if they meet
certain criteria ( acquisition cost over $ 5000, mission critical, repairable, etc.). 2 Most of
the initiative applies to radio frequency identification ( RFID) but it also includes the
GIAI standard as this is a subset of the UID. 3
According to the Office of the Under Secretary of Defense for Acquisition Technology
and Logistics http:// www. acq. osd. mil/ dpap/ UID/ equivalents. html:
“ The commercial unique identifiers meeting these criteria that the Department recognizes
as DoD UID equivalents are the:
♦ EAN. UCC Global Individual Asset Identifier ( GIAI) for serially- managed assets,
♦ EAN. UCC Global Returnable Asset Identifier ( GRAI) for returnable assets, and
♦ ISO Vehicle Identification Number ( VIN) for vehicles.” 4
The acronym “ UID” is not to be confused with The Joint Financial Management
Program’s ( JFMIP) term “ UID or Unique Item Identifier.” JFMIP is a government body
formed to improve financial management in the Federal Government. See
http:// wwww. jfmip. gov for more information on this subject.
It is the author’s opinion that at this point in time, the GIAI standard, as it applied to
meeting the requirements of UID, is not relevant to the asset numbering scheme for
ADOT. According to ADOT Policies and Procedures FIN- 11.02, ADOT’s Assets are
being controlled solely for internal financial reporting and tracking purposes.
2 http:// www. acq. osd. mil/ dpap/ UID/ Office of the Under Secretary of Defense for Acquisition Technology
and Logistics Defense Procurement and Acquisition Policy Site, accessed October 7, 2004
3 http:// www. line56. com/ articles/ default. asp? NewsID= 5535 “ DoD’s RFID Update” by Demir Barlas, April
9, 2004, accessed October 7, 2004
4 http:// www. acq. osd. mil/ dpap/ UID/ equivalents. html Defense Procurement and Acquisition Policy “ Unique
Identification ( UID) Equivalents,” accessed October 7, 2004
11
There are several key considerations in the utilization of identification labels for Assets.
These are discussed individually below.
A. Label size, material, and adhesion method
For asset purposes, there are two ways to produce a label. First, a computer and printer
or specialized bar code printer ( on- site) can be used or preprinted labels can be obtained
from an outside source. An onsite printer can be either fixed at a station or portable. For
most label applications such as warehouse distribution and retail environments, it is
common to produce labels on- site. For asset tracking, preprinted labels can be less
expensive under many circumstances since they do not require the purchase of equipment
and the associated cost of implementation, training, production, and label stock.
“ The central question in determining whether preprinted labels will be more cost
effective is do you know the data you want to print in advance? In most bar code
applications, the symbol is just a license plate. It need only encode a unique serial
number, either unique to the individual item or to the product line. The detailed
information is then stored in a database under the unique serial number. In such an
application, preprinted bar code fits.” 5
B. Label size, material, and adhesion method
Both preprinted and on- site printed labels can be produced on a number of printing
systems and with a wide variety of materials. Common printing systems are Film
Master/ Printing Plate, Ion- Deposition, and Photocomposition. Many printers are
Thermal Transfer, “ A method of printing by which heat from the printhead melts ink
from the ribbon onto media. The ink adheres to the media as it cools.” 6
For most asset applications, materials typically include polyester, foil, aluminum, and
others. The adhesion method can include any combination of adhesive glue, rivets,
screws or other mechanical fasteners. For indoor application at normal ambient
temperatures, adhesives are the most commonly used adhesion method. 7
C. Bar Code Symbology, identification type, and sequence
“ A Barcode Symbology defines the technical details of a particular type of barcode: the
width of the bars, character set, method of encoding, checksum specifications, etc.” 8
Basically, a barcode symbology is the language of the label.
5 Russ Adams, Adams Communications. http:// www. barcode- 1. net/ pub/ russadam/ preprint. html, accessed
September 14, 2004
6
http:// www. intermec. com/ eprise/ main/ Intermec/ Content/ About/ GlossarySubpages/ Glossary_ ST? section= A
bout, accessed September 14, 2004
7 Metalcraft, Inc., 149 4th St. SWMason City, IA 50401,
http:// www. idplate. com/ products/ fixed_ asset_ products/, accessed October 7, 2004
8 http:// www. mecsw. com/ specs/ speclist. html, accessed March 30, 2005
12
Code 39 or Code 3 of 9 symbology is widely used for asset tracking because its character
set can include both numbers ( 0- 9) and upper case letters ( A- Z). Its printing tolerances
are also not as rigid as some other symbologies and therefore, can be printed on a wide
variety of printers. It has been adopted by all major equipment manufacturers as the
symbology to encode serial numbers and other information on the manufacturer’s product
labels. As a single dimensional label, it can also be read by most bar code devices.
For smaller item tracking, a 2- d ( two dimensional) barcode can contain more information
in a smaller label. The downsides include a smaller adhesive surface and fewer bar code
devices that can read the label.
D. Additional information displayed on or embedded in label
Typically, this can include the owner’s name, corporate logo or other artwork, a human
readable version of the asset number, and a specific color or color band. Bar codes need
not be printed as black on white as long as there is sufficient contrast for the bar code
device to read the label. Some bar codes employ ink coatings to visually “ hide” the bar
code for security reasons. These labels can be scanned by using lasers of different
spectrums than visible light.
Also, an RFID tag ( transponder) can be embedded in the bar code label providing the
capability to track the asset using both technologies.
BAR CODE AND RELATED HARDWARE
Introduction
Bar code hardware represents only a small portion of the total worldwide automated ID
marketplace. Major manufacturers of bar code hardware doing business in the United
States include: Intermec, HHP, Symbol Technologies, PSC, Sato, NCR, Zebra
Technologies, and Datamax. Distribution channels include direct sales, partners, and
resellers. The technology gains in this industry over the last twenty years have mirrored
many of the gains seen in the Personal Computer industry. They include more
portability, wireless connectivity, faster processing and memory, as well as
standardization of operating system ( OS) and programming languages.
Hardware Portability
The primary benefit that bar code hardware brings to an asset inventory is its portability.
Data entry that had occurred at the end of the inventory process can now be done at the
collection site. Historically, portable hardware had been batched and offered little real-time
validation. Batch connectivity was the primary method to connecting to Microsoft
DOS based computers or to mainframes via emulation. In the last few years, newer
technology such as the universal serial bus ( USB) standard and RFID standards allowed
more communication options.
13
Historically, the lack of validation was due to two factors. The first is that, until the last
few years, sufficient memory ( storage space) at an affordable cost was not available in
the portable hardware to hold validation information. Secondly, until such operating
systems such as Palm OS and Windows CE became available, much of the programming
environment and program generators did not have the power to develop the sophisticated
programs required for validation. As an example, the author’s first experience with a
programming language for portable hardware was Interactive Reader Language ( IRL ® ), a
proprietary language specific to Intermec hardware. In spite of being called a high level
language, the programmer could only code at a relatively basic level and could not
produce the types of sophisticated programs available today.
Hardware Durability
Bar code hardware is manufactured for almost every type of operating environment from
extreme cold and wet to extreme hot and dry. In addition, it is manufactured to withstand
different levels of physical use and shock. According to Intermec, “ ruggedized mobile
computers provide a total cost of ownership advantage over consumer- grade devices that
offsets the implementation cost difference, according to VDC.” 9
However, due to its small size, Fixed Asset inventory was not a vertical market analyzed.
The author has sold many different models of Bar Code Hardware and offers a range of
hardware, both ruggedized and “ consumer- grade.” 10 It is the author’s experience that
fixed assets inventories in the traditional indoor environment ( not warehouse) do not
warrant the extra expense of ruggedized hardware. Some manufacturers offer leather or
rubber coverings ( or boots) over the non- ruggedized models that offer good protection for
a smaller cost increment.
Scanning Technologies
There are two major types of scanning technology for bar code hardware that is suitable
for most asset inventory systems. They are Linear Imagers and Laser Scanners. Either of
these technologies can read the most common bar code symbologies and have some
overlap in their capabilities. 11
Linear Imagers are best suited for asset inventory systems since scanning distances are
almost always less than 18 inches ( 45cm) and the scanner cost is typically lower than
Laser Scanners. Additionally, they are solid state with no moving parts and tend to be
more reliable.
9 Intermec quoted source: Venture Development Corporation www. vdc-corp.
com/ industrial/ reports/ 03/ br03- 12. html also “ It Pays To Understand The Total Cost of Ownership For
Mobile Computers” published 08/ 13/ 2004 ( no author)
http:// epsfiles. intermec. com/ eps_ files/ eps_ wp/ TCOMobileComputers_ wp_ web. pdf
Downloaded 10/ 13/ 2004
10 http:// www. bar- scan. com/ website/ html- products/ products- hardware. html
11 “ Guide to Scanning Technologies” published 12/ 16/ 2003 ( no author)
http:// epsfiles. intermec. com/ eps_ files/ eps_ wp/ GuideToScanningTech_ wp_ web. pdf
Downloaded 10/ 08/ 2004
14
Laser Scanners have some advantages in a warehousing environment of asset inventory
systems because of their longer scanning distance and bright beam.
Auxiliary Data Entry
There are several forms of data entry commonly available on portable hardware beyond
scanning technology. This is almost always a requirement for asset inventories since
some detailed inventories involve the collection of ad- hoc information in the field, for
example, the name of the current user of the asset. Additionally, the asset label may not
always be in the line of sight of the scanner and the asset number may have to be entered
manually. The most common forms of auxiliary data entry are:
♦ Keyboard - physical qwerty type or chording ( characters are generated using
different combinations of a few keys), touch screen, or both.
♦ Letter or handwriting recognition ( graffiti tablet or block recognizer), typically
with a stylus.
Speech recognition is not prevalent in the hardware, and computer mice are rare.
For asset inventories, the preference is typically to either utilize bar code menus
whenever practical, or download information into the portable hardware to reduce the
amount of unique auxiliary data entry. This has the combined advantage of both
accuracy and speed. However, this does require knowing the data elements, or choices,
prior to the inventory.
When the information is truly ad- hoc, a keyboard may be the best balance between
accuracy and fast data entry.
Radio Frequency Identification
RFID is a major trend in the automated ID technology. However, its main application is
in vertical markets that include Transportation and Logistics, Supply Chain ( commercial
and military), Industrial and Manufacturing, followed by the retail sector. 12
At some future date, RFID may be a major trend in the inventory of fixed assets.
However, “ while the potential for viable RFID applications appears virtually limitless,
few applications have translated into consistent and profitable opportunities, with price
often being the decisive barrier.” 13
12 Frontline Solutions May 16, 2004 - “ Label software vendors add RFID capabilities” by Brian Albright
Quotes by Michael Liard, VDC’s Senior AIDC/ RFID Analyst also December 1, 2003 - “ Ready or not,
RFID’s coming” - Quotes by Michael Liard, VDC’s Senior AIDC/ RFID Analyst also Supply Chain
Systems Magazine December 2003, “ Bar Code: 2003’ s Untold Success Story” - by Paul Quinn - Quotes
by Taylor Smith, VDC’s AIDC Analyst
13 Global Markets and Applications for Radio Frequency Identification” David Krebs & Michael J. Liard,
Venture Development Corporation, a white paper published 5/ 04 http:// www. vdc-corp.
com/ white/ index. html
15
Currently there is a substantial price difference between typically used Polyester labels
and RFID labels. For example, a midwest supplier ( www. idplate. com) retails 3,000
premium labels of a typical size used for asset labels at $ 509.10. The same supplier
charges $ 4,220.10 for 3,000 combination RFID/ barcode labels of 2” x 1.5” with a foam
adhesive ( required for mounting on metal assets).
On the portable hardware side, there is also a substantial premium for RFID capability.
For example, the Symbol MC906R- G with RFID capability retails for $ 4,995.00
( www. symbol. com). A comparable scanner based Symbol MC9060- KH retails for
$ 2,445.00.
Wireless Local Area Network
Wireless Local Area Network ( WLAN) is often mentioned in the same sentence with bar
coding. Many manufactures of bar code hardware are integrating this technology into
their equipment. Basically, it refers to technology that enables the hardware to
communicate to another computer ( usually a host computer with a database depository)
using standard network protocols, but without network cabling.
Since the emergence of cross- vendor industry standards such as The Institute of Electrical
and Electronics Engineers ( IEEE) 802.11 standard, manufacturers have produced a large
number of different solutions. However, most of these solutions have focused in areas
where there is either a high volume of transactions or a local area where the infrastructure
can be easily installed, such as in warehousing or point- of- sale.
The most common form of WLAN today is wireless fidelity ( WiFi). WiFi is the wireless
way to handle networking. It is also known as 802.11 networking and wireless
networking. Data throughput can be scaled to support transmission of up to 1500 feet ( ft)
outdoors and up to 295 ft indoors.
WiFi can be open or secure. If a hotspot is open, anyone with a WiFi card can access the
hotspot. If it is secure, the user needs to know a Wired Equivalent Privacy ( WEP) key to
connect.
Just like the case with RFID technology, WLAN has little application for most fixed asset
inventories. With the exception of warehouses, where the investment of access points
can be justified, most organizations will not make the financial investment required
solely for asset inventories.
The author has one international customer who is installing a WiFi network in one
building for testing purposes. However, the justification includes access for a number of
different uses including mobile email, work order processing, and to a lesser extent,
information technology ( IT) asset management. The customer stated that they could not
justify a WiFi network based only on their need for asset management. 14
14 Confidential source pursuant to terms of non- disclosure agreement
16
The 802.11n standard is scheduled to begin appearing in products in 2005. Existing
hardware is most likely not upgradeable. It will increase bandwidth and the range of
wireless networks. 15
Summary of Hardware Requirements for Asset Inventory
Most manufactures supply hardware which includes a wide range of features. The
author’s experience is that the key to an asset inventory is the need for Hardware
Portability, including a relatively long battery life. Additional Hardware Durability is
usually not warranted. The preferred scanning technology is linear imaging. A physical
keyboard is advantageous for auxiliary data entry. RFID and WLAN are technologies yet
to prove their additional expense.
15 “ The Future of Wireless Networking,” Richard Baguley, PC World Magazine, November 2004 ( pg. 106)
17
PRE- PACKAGED AND SEMI- CUSTOM APPLICATIONS
Case Studies
Numerous case studies justify the use of barcode technology. There are fewer case
studies for asset management due to its more specialized application. The studies cited
below were produced by the various vendors and all stated positive results when
compared to the previous manual methods.
“ Barcode auditing has also significantly reduced the time taken to conduct periodic asset
audits by the Faculties. For example, one audit conducted that would normally have
taken two days alone in sighting assets utilizing a spreadsheet generated printout … was
completed in 6.5 hours…” 16
“ Despite the large number of assets to be collected, recorded and entered into the system,
barcoding and actual data capture took only 11 days – this represented an average capture
of more than 1000 items per day. The whole process took less time than previous audits
and provided much more accurate and reliable information.” 17
“ That’s changing for the better with each annual inventory. ‘ The last one took three
months, we hope to reduce it to two months this year and eventually even more,’ says
Bloodworth. Missing items figures decreased also. Two years ago, 2.36% of total
inventory was not located during the annual inventory count. Under the new system last
year, that was cut by more than half to 1.09%.” 18
“ The second largest school district in Pennsylvania, Pittsburgh must inventory and track
21,000 fixed assets across 90 remote locations.”
“ For more than seven years, the District has continued to maximize its return on
investment in FAS. The software has created a faster and more productive way of doing
business by cutting actual inventory time by 30 to 40 percent.” 19
None of the studies cited cost justifications detailing actual costs and savings. In the
author’s own experience, where inventories are required, the savings in labor time has
exceeded the purchase and implementation costs of the software and hardware on
projects where the total number of assets exceeded 10,000 or the assets had to be counted
on a regular basis of not less than annually.
16 “ Case Study: Hardcat at Edith Cowan University” http:// www. mindstreamit. com/ AllCaseStudies. htm
downloaded on 10/ 18/ 2004
17 “ Hardcat at ANZ Bank” http:// www. mindstreamit. com/ AllCaseStudies. htm
Downloaded on 10/ 18/ 2004
18 “ Asset Tracking Program Gets A+ at Florida Community College,” by Doris Kilbane
http:// www. dhsworldwide. com/ Images/ asset_ art_ fccj. pdf downloaded on 10/ 18/ 2004
19 “ FAS Suite Automates Fixed Asset Management for Pittsburgh Schools”
http:// www. bestsoftware. com/ pdf/ fas/ ss/ fas_ pittsburghschools_ ss. pdf downloaded on 10/ 18/ 2004
18
Vendor Search
An Internet search was made to identify a variety of vendors supplying “ bar code
inventory systems.” Care was taken to select a broad variety of vendors that supply
solutions from basic systems capable of inventorying a few thousand items, to enterprise-wide
systems that both track as well as manage the life- cycle of hundreds of thousands of
items.
Other sources which were used to compile the vendors were:
♦ “ Frontline Solutions” Magazine “ Buyers Guide 20904” www. frontlinetoday. com
Advanstar Communications, Inc. 131 W First St., Duluth, MN 55802- 2065
♦ “ 2004 Facilities Planning and Management Directory” published by Tradeline,
Inc. 115 Orinda Way, Orinda, CA 94563 www. tradelineinc. com
♦ “ American School & University” Magazine “ Buyer’s Guide & Industry
Sourcebook” March 2003, Primed Business Magazines & Media, 9800 Metcalf
Ave., Overland Park, KS 66212- 2216 www. primediabusiness. com
♦ www. govtech. net by e. Republic, Inc., 100 Blue Ravine Rd, Folsom, CA 95630
While the list of vendors selected cannot represent the entire marketplace of applications,
based on the author’s 23 years of experience in this field, the author feels that it does
provide a good cross- section representing various application features and price points.
It should be noted that at the enterprise level, most applications are customized to work
within the IT infrastructure as well as the end- user operational guidelines. Some pre-packaged
applications have features and/ or modules that also allow some customization;
for example “ user defined fields” are typically available to some flexibility to the
application so that it can meet unique needs of each customer.
The list of selected vendors is provided as Appendix A. From this list of Vendors the
matrix on the following page was compiled.
19
Table 2. Vendor / Product Matrix.
Vendor/ Product Name
( alphabetical)
Available Server OS
and Database
Est. Software
Cost*
Bar Code
Technology
Some
Browser
Functions
Asset Systems, Inc.
AssetWin ®
Microsoft Windows
Microsoft Access
Microsoft SQL Server
Oracle 9i
$ 6,895 to
$ 7,995
Yes No
Bar| Scan, Inc.
Bar| Scan ®
Microsoft Windows
Microsoft Visual FoxPro
$ 8,500 Yes Yes
Best Software FAS Fixed
Asset Management
Solution
Microsoft SQL Server
$ 12,360 Yes No
DataStream Systems, Inc.
Datastream 7itm
Microsoft SQL Server
Oracle 9i
$ 35,000
Yes Yes
Hardcat Pty, Ltd.
Hardcattm
Microsoft Windows
Microsoft SQL Server
Sybase SQL Anywhere
IBM DB2
$ 10,000
Yes
Yes
Intellitrack, Inc.
Fixed Assets
Microsoft Access
$ 2,495 Yes No
PeopleSoft, Inc.
Fixed Asset
Accounting
Vendor unresponsive** Estimated FA
$ 85,000 module
only
No
information
No
information
Peregrine Systems, Inc.
AssetCenter ®
Vendor unresponsive** No information No
information
No
information
* Basic Network version with barcode capability – 5 user license exclusive of training,
support, server software, and PDA software
** Both Peoplesoft, Inc. and Peregrine Systems, Inc. were contacted via mail and email
by John Semmens of ADOT with a Request for Information ( RFI). Peregrine responded
with only limited brochure information. There was no response from PeopleSoft.
20
Browser Based Data Access
Browser based assess to Fixed Asset databases is not common. This is due primarily to
two factors. First, the information is often sensitive and is not shared among a large
group; and second, the type of data presented does not process well in a Browser. For
example, a Browser is not designed to manipulate thousands of records simultaneously,
such as is done when depreciation is applied.
However, several of the Vendors do have a Browser Based Module that does allow
access to some areas of functionality.
Brower Access can be advantageous under a number of situations including:
♦ When facilities are geographically remote and do not have sufficient IT
infrastructure to allow access to a master asset database depository.
♦ When the number of assets at a facility does not warrant the bar code hardware,
infrastructure, and training investment required for a physical inventory.
♦ When a large group requires limited access to the inventory.
♦ When persons outside the organization require access to the inventory.
♦ When the Personal Computer does not meet the minimum requirements to access
the database directly ( for example, Apple computers utilize Browsers but many
Vendors do not provide their application for Apple OS).
♦ When the software pricing favors Browser Access.
21
PILOT IMPLEMENTATION
SELECTION OF STRATEGY
ADOT’s Asset Inventory cannot be implemented in a traditional manner. The primary
reasons are:
♦ Dozens of facilities are dispersed over a wide geographical area throughout the
State.
♦ Most facilities have a relatively small number of inventoried items.
♦ Currently, a large number of Organizations are responsible for the inventory.
♦ No central location which facilitates initial tagging and subsequent data entry
exists for the receiving or salvage of items.
Because of these reasons, three different Pilot implementation strategies are detailed
below. In all implementations, inventory personnel will physically replace the current
labels with bar code labels. Each strategy has distinct advantages and disadvantages.
Finally, a Pilot implementation is suggested to validate the cost savings estimated in this
study.
Strategy One - Implement robust barcode technology with dedicated physical
inventory personnel
This scenario would move the responsibility of physical inventory from the
Organizations to a centralized physical inventory staff. This would be the most radical
departure from the current ADOT fixed asset inventory process.
Most larger entities have a specific department tasked with the maintenance of Fixed
Assets which includes the process of physical inventory collection and audit. Sometimes
this is an independent entity but most often it falls under the auspices of Facilities,
Accounting, or Information Technology. In some cases, the personnel assigned are
independent of any departments. However, it would be most feasible to place the
Physical inventory personnel within the Fixed Assets department since ADOT already
has a Fixed Asset Manager.
Since these personnel would be dedicating a relatively large portion of their time to
physical inventory, they can be fully trained in the use of bar code technology. They can
also be provided with more advanced technology since they would receive more personal
training ( than a larger group of Organization employees) and it is anticipated that they
would have lower turnover.
The number of dedicated personnel required is a function of their inventory speed,
number of items to be inventoried, routing schedule for the physical locations, and
desired duration of the physical inventory window.
The inventory window would have the greatest effect on the number of personnel
required to complete the inventory. In the author’s experience, regulatory requirements
are an important factor in determining the window. One California Agency requires an
inventory every three years. In spite of being a very large and geographically diverse
22
entity, they only have to account for each new asset upon receipt, disposal and physical
inventory once every three years; the large window means that they can employee only
two persons for their physical inventory. On the other hand, it would be impractical to
maintain the current two- week physical inventory as the staffing requirements would be
prohibitive.
If a Cycle Count is acceptable to ADOT, performing the inventory over the course of one
or two years would require the smallest number of dedicated personnel and would
minimize the total cost of the strategy.
Advantages
♦ Minimal investment in barcode hardware while maximizing the hardware’s usage.
♦ Reduced involvement of ADOT Organizations and associated annual disruption
and the associated labor costs to the Organizations.
♦ Increased accuracy, speed, and consistency of the inventory due to specialized
training of personnel and technology. For example, improved consistency of label
placement and asset descriptions.
♦ Accountability independent of Organizations.
♦ 100% physical inventory – no delays or follow- up necessary with Organizations
for data collection. Obviously some assets such as vehicles will require inventory
schedule coordination.
♦ Fastest implementation track because this is the most centralized strategy.
Disadvantages
♦ Dedicated direct inventory labor and additional expenses such as transportation
and lodging. These costs can be charged to the Organizations in proportion to the
number of assets or other parametric.
♦ Increased duration of total physical inventory window due to sequential inventory
collection methodology rather than parallel collection methodology.
23
Strategy Two - Implement minimal barcode technology with emphasis on web or
network based data collection software
This scenario entails the implementation of software that replaces the current distribution
of manual asset inventory information to the Organizations. Using either a web centric or
server based database, push the inventory data to the appropriate Organization contact at
each site. This scenario is the least radical solution but still adds automation to the
current process.
The software should print data collection forms similar to forms currently being used.
Organizations may use forms as they perform the physical inventory and manually mark
as appropriate. Results are then keyed back into software at the Organization’s site,
eliminating the need for a paper- based response as software may provide immediate
feedback. Optionally, Organizations can print a final hardcopy for their records.
Authorizing Signature can be added manually or electronically.
Optionally, when adding barcode technology, you will need to procure one or two
barcode hardware and train a very small number of personnel for independent auditing.
Advantages
♦ More accurate data entry than current manual method as Organizations can
validate their own data entry and obtain immediate feedback.
♦ Minimized investment in bar code hardware and training.
♦ Minimal change created in current ADOT Fixed Asset Inventory Process of
Organizations responsible for their own physical inventory.
♦ Current small physical inventory window of two weeks maintained.
♦ Less storage of paper records.
Disadvantages
♦ No independent accountability.
♦ Required follow- up of discrepancies required but this can be automated through
technology such as automated email.
♦ Minimal increase in inventory accuracy due to lack of bar code technology
implementation.
24
Strategy Three - Implement moderate barcode technology and web or network
based data collection
This scenario is a blend of the previous two. In summary, allow the Organizations in the
smaller locations to use the physical inventory methodology described in Strategy Two
while implementing Strategy One with its bar code technology in the larger locations or
all locations in a close geographical area.
Supply bar code hardware only to the larger sites such as Phoenix and Tucson. Train one
person in barcode for audit purposes and two or three in barcode data collection for the
larger locations.
A sample proposed grouping of locations to determine the feasibility of this option was
developed to justify the procurement of four or five portable bar code readers and is
included in Appendix Y.
Advantages
♦ Better than manual method.
♦ Minimal investment in barcode technology may be offset by investment in
software.
♦ Some increase in inventory accuracy due to partial implementation of bar code
technology implementation.
♦ Increased the current small physical inventory window by only a few weeks.
♦ More accurate data entry than current manual method as Organizations can
validate their own data entry and obtain immediate feedback.
♦ Less storage of paper records.
Disadvantages
♦ Does not have independent accountability.
♦ Required follow- up of discrepancies at some locations, but this can be automated
through technology such as automated email.
25
SELECTION OF TECHNOLOGY FOR PILOT
A selection was made for software and hardware for the barcode technology portion of
the Pilot Implementation. Because the cost- benefit is not yet proven, it was decided to
limit the choices to the lowest cost solution providers. Three vendors were suggested:
Hardcat Pty, Ltd.; Bar| Scan, Inc.; and Intellitrack, Inc.
Of these, the Intellitrack Fixed Asset Software and Symbol PPT8800 were selected as
this combination was the lowest cost and offered with additional discounts.
Richard Neshwat, the Fixed Asset Manager for Financial Management Services, installed
and tested the Intellitrack Fixed Asset Software and Symbol PPT8800. Patches were
required and were installed with assistance from the Vendor.
It was not possible to test an ideal implementation of one of the three strategies as
installing and testing a web component would require additional unknown expenditures.
However, cost savings can be extrapolated from a comparison physical inventory.
It is important to keep in mind that any hardware and software selected for the pilot may
be replaced by a more robust selection at a later date.
Hardcat Pty, Ltd. and Bar| Scan, Inc. provide basic systems with bar code technology and
some browser functionality. Intellitrack, Inc. offers the lowest cost solution but did not
offer a browser function. The browser function is an important component of the
implementation strategies previously mentioned. Estimated costs per vendor for a Single
User version and one bar code reader were:
♦ Hardcat - User version with barcode capability – exclusive of training and support.
Modules: Core, Barcoding plus Symbol PPT8800 $ 7,550.00.
( Information on the Symbol PPT800 can also be found at www. symbol. com)
♦ Bar| Scan - Single User version with barcode capability – sold with 2 days training
and 1 year support:
Bar| Scan Asset Management plus Symbol SPT1550 $ 7,875.00.
( Information on the Symbol SPT1550 can also be found at www. symbol. com)
♦ Intellitrack - Single User version with barcode capability but no browser capability–
exclusive of training and support:
Intellitrack Fixed Assets version 4.3 plus Symbol PPT8800 $ 3,580.00
Bar code labels to tag the individual assets were also required for any of the three above
mentioned vendor candidates. The cost for 3,000 polyester asset labels was $ 480.00.
26
DEPARTMENTAL CANDIDATES
Several Departmental Candidates for Pilot Implementation were considered including
Transportation Services, MVD, Equipment Services, and Administration.
It was decided to perform the implementation at the 206 S 17th Avenue site, primarily on
the second floor. This was primarily due to the fact that the initial On Site Observation
was also done at this location. Performing the Pilot Implementation within the same
environment would present us with the most compatible data set for comparison.
27
PILOT IMPLEMENTATION FINDINGS
SAMPLE RESULTS
Richard Neshwat, the Fixed Asset Manager for Financial Management Services,
performed the Pilot Implementation with the Single User Intellitrack Fixed Asset
Software and one Symbol PPT8800.
Below is a chart of the observation result. The inventory time includes travel time within
the building as well as the time required to complete the forms.
Table 3. Pilot Implementation Sample
Pilot Implementation Sample
Org Time Number
Code ( minutes rounded up) of Assets
0020 4 6
1010 4 7
1021 1 2
1023 3 6
1030 7 12
1101 4 5
1110 3 4
1111 4 7
1112 4 14
1113 3 4
1114 7 16
1120 1 2
1121 4 9
1124 3 6
1125 3 4
55 104
assets/ min/ team = 1.89
assets/ min/ person = .945
While ADOT is geographically disbursed and the above sample is not meant to be
representative of all Organizations, it can be used to extrapolate an estimate of the man-hours
required to collect the annual inventory with bar coding and automation.
Assuming the collection time for all non- vehicle assets at .945 assets per minutes per
person and vehicles at .4725 assets per minute ( 200% of non- vehicle assets), the total
time is approximately 563 hours ( 22,600 assets at .945 assets per minute = 23,915
minutes plus 3,900 vehicles at .4725 assets per minute = 8,254 minutes) plus an
additional 5% for follow- up time for a grand total of 563 estimated man- hours.
28
Once the inventory data was collected, various reports, such as a missing asset report,
were generated. Since this was only an experiment, the data was not entered into the
AMS Advantage Accounting System.
In summary, an estimated 563 hours are spent performing the annual inventory. This
estimate is not based on a representative sample and has no statistical significance.
Comparing the results of Table 1 and Table 3, the extrapolated reduction in man/ hours
for the physical inventory collection was 26% ( 765.5 man/ hours reduced to 563
man/ hours).
Estimated Annual Cost Benefit
For ADOT, the extrapolated reduction in man/ hours translates to an annual benefit of
$ 5,067.67. The cost is based on a $ 15.69 hourly rate plus benefits for ADOT
administrative personnel. 20 Assuming an estimated six year operational life of the
equipment and software, the total benefit would approximate $ 30,000.
Estimated Acquisition Cost for Hardware and Software
The total acquisition cost of hardware, software, and labels for the Pilot was $ 3,988.70.
To implement Strategy Three, while retaining the abovementioned initial investment, the
total additional implementation cost is estimated to be from $ 11,155.00 to $ 12,425.00.21
This would be sufficient to implement bar code technology at the three largest facilities
with the assumption that each facility requires one portable bar code device.
The Intellitrack network upgrade to allow up to five simultaneous users is $ 1,195.00.
There are several different Symbol models that can run the Intellitrack software. The
purchase of additional Symbol equipment that can run the Intellitrack software is from
$ 1,410.00 to $ 2,045.00 each ( including cradles and cables). Intellitrack software licenses
for the Symbol hardware is $ 300.00 per unit.
Professional training in the use of the software and hardware would require additional
expenditure for several days. The industry standard for training is from $ 1,000.00 to
$ 1,500.00 per day.
The cost for 20,000 additional bar code asset labels of the same specification used in the
Pilot is estimated to be $ 1,750.00. This is a sufficient quantity to label all inventoried
assets. Depending on label placement, vehicles might require an ultra- violet resistant
label.
An export from the Intellitrack to the AMS Advantage Accounting System Fixed Asset
module should be reviewed. An electronic interface to update physical inventory
information would eliminate data entry as well as improve accuracy.
20 202.5 hrs saved times ($ 15.69 hourly rate plus 59.5% payroll additive— estimate provided by Craig
Rudolphy, Arizona Department of Transportation Comptroller)
21 All upgrades at retail prices, discounts may apply.
29
Implementing software that replaces the current distribution of manual asset inventory
information to the Organizations with a web centric or server based database to push the
inventory data to the appropriate Organization contact at each site is more difficult to
estimate and beyond the scope of this project.
In summary, the implementation cost, exclusive of a web component is:
Table 4. Implementation Cost
Item Cost
Intellitrack 5 User upgrade $ 1,195
2 units Symbol hardware that support Intellitrack with cradles22 $ 2,820 to $ 4,090
2 units Intellitrack Software License for hardware $ 600
2 days of Intelltrack Training $ 3,000
20,000 additional bar code asset labels $ 1,750
First 2 years of Intellitrack Support $ 1,790
Total Implementation Cost: $ 11,155 to $ 12,425
Estimated Annual Maintenance Expense and Life Expectancy
There are many factors that can affect the life expectancy of hardware and software
technology. Currently, there is rapid technological advancement in the hardware
mentioned in this report, especially since the jump to Pocket PC technology. Assuming
that the hardware would only be required for a short duration every year, it would be safe
to estimate that the hardware would be technically obsolete before it is worn out from
normal use. Expect to replace the hardware in about five to seven years. On the software
side, Intellitrack provides an annual support plan for the five user license for $ 895.00.
Given the annual cost saving of $ 5,067, the annualized implementation expense of
$ 1,965 and the annual $ 895 support plan for the software, the estimated benefit/ cost ratio
for implementing this bar scan solution would be approximately 1.77: 1. That is, $ 1.77
would be saved for every one dollar spent on implementation. The time required to
recoup the implementation investment above would be approximately 2.8 years.
Annual support for a web centric or server based database to push the inventory data to
the appropriate Organization contact at each site is more difficult to estimate and beyond
the scope of this project.
22 Symbol MC50 or Symbol PPT8800
30
31
CONCLUSIONS AND RECOMMENDATIONS
INTRODUCTION
The Pilot Implementation showed that an automated asset inventory system can reduce
the amount of time needed to perform a physical inventory as well as increase the
accuracy of the results.
Comparing the Onsite Sample and Pilot Implementation showed a 26% reduction in
man/ hours for the physical inventory collection. However, based on this alone, it cannot
necessarily be concluded that a full- scale implementation of the technology will result in
a cost savings.
Because of the Study’s budget, the Pilot Implementation represented only a very small
sample of assets in a single building and was not representative of ADOT’s infrastructure
which has:
♦ Dozens of facilities dispersed over a wide geographical area throughout the State.
♦ Most facilities have a relatively small number of inventoried items.
♦ Currently, a large number of Organizations are responsible for the inventory.
♦ No central receiving or salvage of items location facilitating initial tagging and
subsequent data entry.
Because of ADOT’s infrastructure, three different statewide implementation strategies
were detailed below. Each strategy had distinct advantages and disadvantages that were
previously discussed.
Strategy One - Implement robust barcode technology with dedicated physical
inventory personnel
This scenario would move the responsibility of physical inventory from the
Organizations to a centralized physical inventory staff. This would be the most radical
departure from the current ADOT fixed asset inventory collection process.
Strategy Two - Implement minimal barcode technology with emphasis on web or
network based data collection software
This scenario entails the implementation of software that replaces the current distribution
of manual asset inventory information to the Organizations. Using either a web centric or
server based database, push the inventory data to the appropriate Organization contact at
each site. This scenario is the least radical solution, but still adds automation to the
current process.
Strategy Three - Implement moderate barcode technology and web or network
based data collection
This scenario is a blend of the previous two. In summary, allow the Organizations in the
smaller locations to use the physical inventory methodology described in Strategy Two
32
while implementing Strategy One with its bar code technology in the larger locations or
all locations in a close geographical area. Supply bar code hardware only to the larger
sites such as Phoenix and Tucson and train one person in barcode for audit purposes and
two or three in barcode data collection for the larger locations.
Conclusions and recommendations are based on imperfect data. They are offered as
suggestions for consideration. Also, review of ADOT operations is outside the scope of
this report.
CONCLUSIONS
The lack of academic journal articles and publicly available data point to a lack of
systematic analysis of fixed assets inventories. However, case studies justify the use of
barcode technology and have shown reduction in the time taken to conduct periodic asset
inventories. This was also validated in ADOT’s Pilot Implementation.
The primary benefit that bar code hardware brings to an asset inventory is its portability.
Data entry that had occurred at the end of the inventory process can now be done at the
collection site. Newer technology has made this process easier and faster. Observed
benefits of the automation were accuracy ( transposition of numbers) and easy reporting.
In addition, with automation, future inventories will be easier to perform since existing
asset tags will contain bar codes.
RECOMMENDATIONS
Since the Pilot Implementation showed that an automated asset inventory system can
reduce the amount of time needed to perform a physical inventory as well as increase the
accuracy of the results, it is recommended that ADOT further study the automated
technology in conjunction with one of the three implementation strategies presented in
this report.
It is the author’s opinion that Strategy Three, the implementation of moderate barcode
technology and web or network based data collection would best suit ADOT’s
infrastructure. It offers the benefits of both Browser Access as well as barcode
technology without committing to a dedicated centralized inventory staff. To recap,
Brower Access can be advantageous under a number of situations previously discussed in
this report.
A larger study incorporating the Pilot Results with Browser Access would provide
additional key information required to justify the statewide implementation of an
automated Asset Inventory System.
33
APPENDIX A
Product Name
( alphabetical)
Vendor Information
AssetCenter ® Peregrine Systems, Inc.
3611 Valley Centre Drive
San Diego, CA 92130 USA
Telephone: 800.638.5231 web: http:// www. peregrine. com
AssetWin ®
Asset Systems, Inc.
618 B West 5th Avenue
Naperville, IL 60563
Telephone: 1- 877- 955- 4321 web: http:// www. assetsystems. com/
Bar| Scan ®
Bar| Scan, Inc.
31200 Via Colinas, Ste 202
Westlake Village, CA 91362- 3939
Telephone: 1- 818- 991- 7001 web: http:// www. bar- scan. com
FAS Fixed Asset
Management Solution
Best Software ® Offices
2325 Dulles Corner Boulevard
Herndon, Virginia 20171
Telephone: 1- 800- 368- 2405 web: http:// www. best- software. com/
Datastream 7itm Datastream Systems Inc.
50 Datastream Plaza
Greenville, SC 29605
Telephone: 800- 955- 6775 web: http:// www. dstm. com
Hardcattm Hardcat Pty, Ltd.
GTC Systems, Inc. ( Local US Distributor)
4631 Viewridge Avenue
San Diego, CA 92123
Telephone: 858- 560- 5800 web: http:// www. hardcat. com. au/
Fixed Assets Intellitrack, Inc.
224 Schilling Circle, Suite 130
Hunt Valley, MD 21031
Telephone: 888- 583- 3008 web: http:// www. intellitrack. net/
Fixed Asset
Accounting
PeopleSoft Inc.
4460 Hacienda Drive
Pleasanton, CA 94588- 8618
Telephone: 800- 380- 7638 web: http:// www. peoplesoft. com