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[Explained] What Is Asset Tracking and Related Questions

If you’re asking yourself, ‘What is asset tracking’, you may also be looking for information that goes beyond a simple asset tracking definition.  We’ll cover some basics of asset tracking, but let’s start by answering the basic question:

Asset tracking is a business process that enables you to know where your high-value assets - like equipment, tools and people – are in real-time, as well as where they’ve been. 

And although there are a variety of tracking methods, from spreadsheets to specialized asset tracking software, each method has its distinctive pros and cons as we’ll discuss later in this post.  But before we do, let’s address a few other questions you might have…

What is Asset Management?

Whereas asset tracking helps you keep up with the location of your physical resources, asset management is the process of overseeing and controlling them, using information about their condition, value, maintenance, and so on.  

Here’s a very basic example. If you use a fitness watch, it tracks you and your movements, much like asset tracking equipment.  On the other hand, that information becomes far more valuable when you add other data points about yourself, such as what you ate or how much water you drank.  So, that’s more akin to asset management.

While that’s certainly an interesting topic for discussion, let’s stay focused on the ins and outs of asset tracking for now.  

What is an Asset Tracking System?

There are many ways you can go about keeping track of your resources, but they all involve some sort of process.  An asset tracking system deals with whatever solution you choose to implement and can include everything from a pen and paper to state-of-the-art asset tracking apps that use some form of asset tracking hardware.  Which brings us to the next question.

What is Asset Tracking Hardware?

Indoor Asset Tracking

If you’re planning to use anything more powerful than a simple spreadsheet for asset management, you’ll need to employ physical devices of some sort to interface with asset tracking software.  We’ve talked more about this topic in other posts (here’s one that covers asset tracking hardware specifically).  

Perhaps the most important type of device to discuss here is the asset tracking tag, which goes on or along with whatever physical asset you wish to manage - be that equipment, tools or people.  

There are several types of indoor asset tracking technologies. And this overview of indoor positioning systems discusses each in greater detail.

Outdoor (GPS) Asset Tracking

If you’re looking to track your physical resources outside of buildings, your best bet is to use GPS asset tracking hardware, which interfaces with satellites to calculate position.  That said, GPS also comes with some pretty major drawbacks.  

The most significant among these shortcomings is the fact that GPS tracking can be extremely power-hungry.  Think about how quickly your phone battery dies when you’re in a location with poor cellular service.  Oh, and most GPS assumes you actually have service.  

In addressing that problem there are some really strong alternatives to GPS outdoor asset tracking now making their way into the market.  The AirFinder SuperTag, which is in beta at the time of publication, dynamically selects the best of three different location technologies - power-optimized GPS among them.

What is RFID Asset Tracking?

Broadly speaking, RFID asset tracking (which stands for Radio Frequency IDentification) is a method of sending or receiving messages from asset tracking tags using specific frequencies. There are two broad categories here: passive RFID and active RFID:

Passive RFID Asset Tracking

Passive RFID, the more basic of the two technologies, is a process whereby a reader sends out a radio frequency signal that essentially “wakes up” the tag.  A simple antenna then registers the signal and relays it back to the reader.  This type of tag is typically very inexpensive because it has no real power source.  

An excellent example of passive RFID are the stickers or tags that set off alarms in retail businesses if merchandise leaves the front door without being deactivated.  

Incidentally, this is called choke point asset tracking, where the door represents a single passage in and out – which is, of course, the only logical place to sound alarms without “alarming” the guests. 

Active RFID Asset Tracking

Here’s where we start to get into the good stuff!  Active RFID asset tracking leverages batteries in tags and often works in concert with Bluetooth or Bluetooth Low Energy (BLE), though other options are available.  Here’s a quick rundown on the difference between Bluetooth and BLE, too.   

Active RFID can track assets throughout a building with a longer range, thanks to battery power.  These tags advertise a message to access points or readers communicating which tag they are.  

Because they have batteries, active RFID tags are more expensive to buy than simple passive RFID tags; but they are also infinitely more helpful. Plus, this technology yields considerably more accurate location information.  

At the same time, what you save in tag cost with passive RFID, you’ll often spend on the overall system (and then some).

So Which One Is Better?

It depends on what you’re looking to do.  If you simply need to know that an item has passed through a location or choke point, then passive RFID is probably a great solution – especially if your tags must be relatively disposable.

Conversely, if you want the ability to proactively locate and monitor assets, passive RFID will never really stand up to the task.  You’ll want to have an active RFID, real-time location system (RTLS) like AirFinder, which combines the best balance of accuracy and affordability.  But that’s a subject for this post on asset tracking accuracy!

What is Barcode Asset Tracking?

Although barcodes are widely used for asset tracking, they offer fairly limited value.  In this type of system, each asset receives a barcode that can be scanned at various points or locations.  Barcode asset tracking is better than using a spreadsheet or some other overly simple method of asset management.  

Perhaps the most ubiquitous use of barcodes (other than at the grocery store checkout) can be found in the shipping industry.  A company receives an order to send out to its customer.  Once the order is fulfilled and ready to ship, the company generates a barcode and sticks it on the package, which then gets scanned along the way until it finally reaches its destination.

Sounds simple, right?  Well, that’s also this method’s biggest drawback.  Think about everything that might occur to compromise the package between order fulfillment and receipt, like damage from improper handling, excessive temperature or theft.  Barcodes can neither account for nor detect any of those events.

Barcodes are also a common asset tracking method in warehouses for tools and equipment.  But what happens if a tool goes missing?  Workers still have to stop production to locate the asset, the costs of which can far outweigh the attractive upfront price tag of a barcode solution.

Now that we’ve walked through some basics of asset tracking, we are ready to answer the last and probably most important question:

Which Kind of Asset Tracking is Best?

Frankly, it depends on both the type of assets you need to track and the extent to which you care about knowing exactly where those resources are.  And if you want to get into more comprehensive asset management, that immediately knocks out asset tracking methods like spreadsheets, passive RFID tags and barcodes. 

Fortunately, however, you are better equipped to make your next move now that you know what asset tracking is and have a handle on the some of the more commonly used methods. We’re here to help, so drop us a line with any other questions you have.


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Written by Clare French

Clare heads up Marketing at Link Labs, bringing over 15 years of performance marketing experience. With a background in B2B, B2G and B2C industries, Clare blends the best of all worlds to create and lead effective, prospect- and customer-centric marketing strategies that drive results. She holds a B.S. in Psychology from Towson University and an M.B.A. from the University of Roehampton.

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