Eskom benefits from tool management and traceability system

Do you know who has what tools and equipment in your warehouse? Can you account for all tools and equipment issued, and do you have measures in place to identify tool and equipment losses? You may be able to answer this question positively, but can you say for certain that you have a record of when these tools or equipment were last maintained, and when their next service is due? Are you compliant in terms of the Occupational Health and Safety Act (OSHA) in this regard? Warehouse managers, tool crib managers and safety managers are often concerned with these issues and other relevant issues when it comes to managing tools and equipment.

It is not surprising that these issues are of concern as failing to manage tools and equipment have various consequences. In terms of tool and equipment losses due to theft, a recent survey found that this issue costs industries in the United States of America a whopping $600 million per year (National Equipment Register Survey, 2007 in ToolWatch Corporation Industry Statistic Sheet, retrieved 2014). When considering that as little as 6.5% of that equipment is ever recovered (National Equipment Register Survey, 2007 in ToolWatch Corporation Industry Statistic Sheet, retrieved 2014), it is easy to understand why managing tools and equipment is vital. Despite the exorbitant cost of theft of these items, a failure to keep them well maintained can cost organisations in time and money due to mistakes being made or due to substandard production.

Lastly, an organisation that fails to keep record of relevant information relating to tools and equipment also does not comply with the requirements of OSHA (Occupational Health and Safety Act 85 of 1993, 2014).


Taking into consideration all these potential consequences of failing to effectively manage stock of tools and equipment, Eskom wanted to move away from their paper-based tool and equipment management solution to a more sophisticated and reliable system. Eskom currently has 10 training centres across South Africa. Each training centre houses tools and equipment to the value of R1.6 million and they were loosing approximately R800 000 in total per annum, due to tool and equipment losses. Given these losses, Eskom required a system that assisted them to monitor tool and equipment movements, provide a reliable method of recording these movements, record calibration and maintenance done on tools and equipment and lastly, record future services and calibration required on the same tools and equipment.

In this discussion we address the problems experienced when managing tools and equipment, as well as highlight the latest technology and processes available to implement a tool and equipment management system.

Eskom will be used as a case study to outline the likely problems experienced by most companies, and the implemented solution will be elaborated upon in order to highlight an effective management system used to address this problem.

The first section of this paper will address the reasons as to why a paper-based system is ineffective. This purpose of this section is to provide further insight into the challenge that so many organisations face. Once a general overview has been elaborated upon in terms of these reasons, the case study organisation will then be discussed in order to understand the specific challenges they faced.

The second section deals with a specific solution that was implemented at Eskom to help them effectively manage their tools and equipment. The process employed at Eskom will be addressed in this section and is depicted in a diagram.

The third section will outline the core features and the respective benefits of using the system employed. Lastly, final thoughts on the paper will be shared.

1. Why is a paper-based tool and equipment management system ineffective?
Depending on the nature and size of the organisation, management and control systems for tools and equipment may or may not be in place. Smaller organisations or organisations that do not keep many tools are not likely to manage their tools and equipment at all, or may count stock of these items when required to for recording on the asset register. This approach renders the organisation vulnerable to the actions of deviant employees. Conversely, larger organisations, or organisations who rely heavily on the use of their tools are likely to implement some form of a tool tracking system, no matter how rudimentary it may be. These rudimentary methods may include using paper and spreadsheet procedures for controlling tools and equipment.

A basic system of control includes employees being issued with the required tools and equipment once a day, once a week or once a month (depending on the organisation’s specific procedure). The serial numbers (if any) and/or a description of the item is recorded by an individual on a spreadsheet or document. In some cases, the employee signs in confirmation of receipt of the item(s). Depending on the procedure adopted by the company, the employee then returns the items at the end of the day/week/month which is likely to be recorded on the same document it was issued on. The items issued to the employee are then checked against the spreadsheet or paper to verify whether the employee still has the tools or equipment previously issued, and whether these items are in fact the same tools and equipment that was previously issued.

The above outlined procedure relies heavily on the correct information being recorded initially by individuals (if at all). Additionally, the above procedure requires that the issuer effectively controls the document and that upon return, the items are properly inspected. This type of procedure is prone to human error. Lack of proper recording, item descriptions and inspections provide many opportunities for tools and equipment not to be returned. If the equipment is in fact returned, the defined procedure may or may not make provision for ensuring that the tools or equipment are returned in good working order, potentially resulting in faulty equipment being reissued. Some individuals are irresponsible when using tools or equipment, and as a result the life of the item can be dramatically decreased.

With specific reference to Eskom’s case, a report was generated and printed from SAP, an ERP (enterprise resource planning) system. Once the report had been generated, a comparison was made between what was recorded on the system versus what was in stock. The specific challenge that Eskom had faced with this system was that assets that were depreciated to a point where they had a zero value, did not feature on the report for comparison with the physical items. The fact it was not operational and as a result,
depreciation of the item did not mean discrepancies were found between what was in stock versus what was recorded on the system. Consequently and due to the extent of tool and equipment losses suffered at the training centres, an effective and efficient tool and equipment management solution was required.

2. Tool and equipment management system
An equipment and tool control and management system that uses a 2D code scanner and individual biometrics to issue and return items at Eskom’s training centre was delivered to manage tools and equipment issued to students. The organisation requested that the implemented system also keep track of the movement of tools across different locations.

New items or items that are not marked are firstly marked with a 2D code and human readable text with a dot peen marker, which imprints a permanent mark onto the item. Materials that are up to 62 Rockwell C in hardness can also be marked. Appointed marking operators control the dot peen markers. Tools and equipment can be marked at just about any location as the dot peen markers were customised to be mobile marking stations. Where a mark can not be made directly onto the item, a non-transferrable tamper evident asset label is stuck onto a visible part of the item. The label cannot be removed and restuck onto another item as the label disintegrates when interfered with. The asset number allocated and marked or stuck onto the item is a unique number issued by Eskom’s asset register system. Once the item is marked, it is scanned to verify that the information is correct and that the mark is scannable.


Marking trolleys supplied to Eskom by Traceabilty Solutions

Registration entails the operator logging onto the system by scanning his or her fingerprint. The 2D code on the item is then scanned (the scanner is plugged into a personal computer), and the information is then populated to the relevant field in the custom software package. This serves two purposes. The first purpose is to register the item on the database, and the second purpose is to confirm the uniqueness of the number allocated. The operator is then required to record the type and description of the item. This is done by the operator selecting options from various drop down fields in the software, thereby minimising human error in recording data. The information recorded includes the type of item, the description of the item, whether the item is in good working order or not, and whether the item requires calibration or not.

Once the item has been registered, the item is issued to the individual concerned. The item is issued only once the item has been scanned, and the fingerprint of both the person issuing the item and the person receiving the item has been scanned and captured on the system allowing full accountability for both parties.

Once the item has been used and is returned by the student, the item is returned on the system by means of the verifier (storeman) logging onto the system by scanning his or her fingerprint. Once the person who has logged on has been verified, the 2D code on the item and the fingerprint of the user are both scanned in order to complete the process of the item being returned on the system. At this stage the item is inspected for faults. If the item requires maintenance, this is recorded on the system. Serviceable items are then entered into stock and packed away for reissuing when required.

3. Benefits of using the outlined management system
Before addressing the benefits of using the outlined management system, the core features of the system are highlighted below. The core features of the outlined management solution render the solution more effective in managing tools and equipment. The core features include:

  • In most cases, direct part marking (i.e. permanent mark on the tool/piece of equipment)
  • Using 2D codes to store information
  • Dedicated software package
  • Using fingerprints to verify the issuer and the receiver
  • A reporting function for management to review tool and equipment movement, even
    across different locations

By marking directly onto the part, the mark is permanent and cannot easily be removed. Markings can be done in recesses where it would be difficult to get into to remove and can still be picked up by a scanner. Even if a file is used to file away at the mark, it can still be established that a mark was previously there. In addition, the filed away information can be recovered forensically, if need be. Where a tamper evident label is used and interfered with, it can be seen as the label disintegrates. When searches are conducted, the marks that are filed or labels that are tampered with will easily be identified and it can quickly be established that the part belongs to the company. Defaced items or labels that have been interfered with can still establish accountability when it is in the receiver’s possession.

The 2D code can store much more information in a smaller space on the marked item than what would be possible with a 1D code or man readable text. A lot more information can be accessed from the tool or piece of equipment as a result of this, and this allows the company to better manage services and calibrations when required to. The 2D code allows for automated reading of information, which is not possible with only human readable text. In addition this 2D code could also be a huge theft deterrent as it is unlikely that people would go to the lengths required to mark a 2D code on an item in order to get away with stealing it. Either way, unless the perpetrator has a dot peen marker, the right scanner and software, the use of 2D codes makes it more challenging for individuals to mark and copy the unique number allocated to the tool or piece of equipment. For even more security it is even possible now to put non counterfeit codes on items.

The most beneficial features of the system implemented, are the fact that it requires minimal human intervention to record information as well as the fact that responsibility for items is established through scanning fingerprints of the issuer and receiver. Human error in recording, describing, receiving and/or issuing the tools/pieces of equipment is minimised.

The operator is required to select from pre-populated fields to effectively describe a part. This standardises descriptions used and thereby eliminates confusion about which part had been issued and returned. This implemented system also ensures that no item can be issued without scanning the 2D code on the part and without scanning the issuer’s and receiver’s fingerprints. This way responsibility for the item is immediately established and an audit trail per item is available for review.

Another benefit of using fingerprints to establish responsibility is the fact that trainees who have left tools behind on power lines or on site will quickly be identified. This helps to eradicate potential safety concerns that may arise, as well as the loss of tools resulting from negligently leaving tools behind. If tools are found unaccounted for onsite, once the 2D code on the tool is scanned, the person who was issued with the tool will be identified. Trainees are likely to ensure that they have all their tools before leaving a training site due to this feature of the implemented system.

Lastly, the system implemented includes a reporting function, which provides management of the training centre with important information relating to tool and equipment movement. The reports provide an audit trail in terms of movement of items across the different training centre locations. In so doing, management are able to identify questionable transactions on the system, a well as any items which have not been returned, or have been returned by the person who was not the initial recipient.

4. Final thoughts
Knowing who has what tools and equipment and having the peace of mind of knowing that record is kept of service and calibration dates is of concern to warehouse and tool crib managers, as well as to accounting staff and executives. The objectives of most tool and equipment management systems are to establish responsibility and accountability of those using the items as well as to maintain tools and equipment. At the end of the day, if a system can deliver on these objectives, the system is deemed to be effective. There is no better system to establish accountability and responsibility than one that uses fingerprints and permanently marked 2D codes to do so. Using what is unique to both humans (fingerprints) and the items issued (once marked with the 2D code) not only establishes accountability, but also deters deviant employees from stealing items. Lastly, using a standardised method of capturing and storing information supports warehouse and tool crib managers to keep track of services and calibration requirements of tools and equipment, which offers these managers peace of mind as a result.

Traceability Solutions is an authority on marking, identification and traceability solutions for various industries. The company is based in Northriding, Johannesburg and has branches in the Eastern Cape, Western Cape and KwaZulu Natal.

For more information on this solution and other solutions available for part marking, identification, track and trace contact Traceability Solutions TEL: 011 704 4744 or visit