Is Barcode cheaper for Uniform Tracking than RFID or vice versa?

This article used material gleaned from a July 7, 2009 article on RFID Weblog by Gautam.


“On the 35th birthday of Barcode there is still a myth prevailing in the whole industry that barcode is cheaper when compared to RFID.”


For Uniform Tracking, barcodes, after all cost just 15 cents each while the electronic tags used in RFID cost $1.00 each


Mark Roberti at RFID Journal seems to question the prevailing theory which says that barcode technology is cheaper when compared to RFID technology. He says “calling barcodes cheaper than RFID tags is the same as saying that a wood handled hammer is cheaper when compared to nail gun.”


Like Mark Roberti did for a retail business in his article, we at Foundation Logic Systems are using a very simple example for Uniform Tracking to show that the overall cost of implementing RFID is less when compared to barcode.


Let’s say there are two hotels, each owning 15,000 garments. The cost of the barcodes in Hotel A, at 15 cents apiece, would be $2,250. The cost of the RFID tags in Hotel B, on the other hand, would be $15,000 at $1.00 each. “Barcodes look like a much better deal, sure but remember, neither hotel has yet taken inventory or scanned garments to and from the cleaners.”


Let’s say each hotel decides that in order to maintain an accurate inventory, it will conduct an inventory once a month. Each month, two employees at Hotel A would take a total of 40 hours to scan the barcodes on every item. The total labor cost would be $800 per month, or $9,600. At Hotel B, meanwhile, it would take one worker two hours to read all of the RFID tags. The total labor cost each day would, thus, be $20 or $240 per year.


Collecting the data necessary to operate efficiently with barcodes would thus cost Hotel A $11,850 ($2,250 for barcodes, plus $9,600 in labor); whereas it would cost Hotel B $15,240 to collect the data it requires ($15,000 in tags, plus $240 in labor). So collecting the information needed to maintain high inventory accuracy would actually cost slightly more with RFID than with barcodes. But how much time is taken to scan barcoded items to the cleaner and scanning them again when the cleaned items are returned. It’s not unusual for the process to take one employee 3 hours each day scanning barcoded items in and out, whereas items with RFID tags take seconds to read. So to scan barcodes the total labor cost would be $30 per day or $9,360 assuming that this process is done 6 days a week.


To operate efficiently with barcodes it would cost Hotel A $21,210 ($2,250 for barcodes, $9,600 in labor for inventory plus $9,360 to scan to and from the cleaners); whereas the costs for Hotel B would still be roughly $15,240 to do a monthly inventory and send and return garments from the cleaner ($15,000 in tags, $240 in labor to take inventory and virtually nothing to scan garments to and from the cleaners).


Therefore, collecting the information needed to maintain high inventory accuracy and scanning items to and from the cleaners would actually cost more with barcodes than with RFID.


Mark Roberti says that he realizes he simplified things in his example of the retail business. But he goes on to say: “You would also need to factor in the cost of handheld barcode interrogators, RFID scanners, software and so forth. But you get the point, and there should be no disputing it: Collecting data is not cheaper with barcodes than with RFID tags.”


There is another factor that must be considered in evaluating the cost of barcodes versus RFID tags. It is estimated that a typical uniform can be cleaned or laundered roughly 50 times before it needs to be replaced. Manufacturer tests have determined that washable RFID tags can go through at least 200 cleaning cycles before they begin to fail and this appears to be a conservative estimate. Theoretically then, RFID tags can be used on four different garments which will essentially reduce their price to 25 cents per use. Also, one can’t ignore the fact that barcodes tend to fade if the chemicals used in cleaning are too harsh, which means sometimes more than one barcode label must be installed on a garment.


“One also needs to realize that when compared with barcodes, RFID completes the job faster and if measured then it’s 75 to 80% faster. Data collection with RFID is definitely cheaper as compared to barcode technology and is far more accurate and one doesn’t need to deploy too much labor. Even the overall performance of the staff seems to suffer as a result of wrong data and probably these factors are ignored by most of the companies and as a result they are not able to realize how much they tend to lose by not implementing RFID.”

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