RFID
RFID ROI Calculation: The Honest Spreadsheet
Amey Kadle
7 February 2026
6 min read
CFOs do not buy "transformation". They buy NPV. An RFID ROI case stands or falls on six numbers, and most vendor proposals get four of them wrong.
The Six Numbers
- Current dispatch error rate — in % and in ₹ lost per error.
- Current reconciliation labour cost — hours per day x fully loaded cost per hour.
- Current inventory carrying cost from buffer stock held to mask the visibility gap.
- Cycle time on cycle counts — hours per zone x frequency.
- Customer claims / chargebacks — annual, traceable to dispatch errors.
- Capex amortised over a 5-year asset life.
Worked Example
| Line Item | Annual ₹ |
|---|---|
| Dispatch errors (5% x 5,000 items/day x ₹700 error cost) | ₹2.55 Cr |
| Reconciliation labour (4 hrs/day x 2 staff x 300 days x ₹1,200/hr) | ₹28.8L |
| Buffer inventory carrying cost | ₹1.10 Cr |
| Customer chargebacks | ₹68L |
| Gross annual savings | ₹4.6 Cr |
| Capex amortised over 5 years (₹1.8 Cr / 5) | ₹36L |
| Annual maintenance + support | ₹22L |
| Net annual benefit | ₹4.0 Cr |
Practitioner note
A case that delivers > 3x annual savings vs capex is a clean buy. Below 1.5x, demand more discovery before signing.
Frequently asked
What discount rate should I use?
For Indian manufacturers we typically model at 12 – 14% WACC. Any RFID case that does not survive at 14% is not a good case.
Amey Kadle
Founder & CEO, Ajinkya Technologies. 20+ years of building MES, ERP and AI systems for India’s most demanding manufacturing plants.