The common denominator of industrial textiles is that laundries pick up soiled linen, wash, and return it clean in a continuous logistic cycle. Our tracking process runs in parallel, recording the transfer of goods each time these change hands, and responsibility is transferred to the next party.

The tracking process interferes in no way with the logistic cycle, which remains unchanged.

The efficiency and quality of tracking of tagged items is measured by the completeness of data capture at each of the reading stations. Poor read performance of UHF RFID enabled items is one of the main reasons for past failures.

The most impactful improvement of the tracking process is our invention of an aggregation algorithm, which delivers unprecedented reading accuracy.

The industry norm has been to use ‘brute-force’ to maximize results, by relying on increasingly more powerful and sophisticated readers with multiple bigger antennas, in an attempt to achieve maximum accuracy in one single reading.

However, results did not improve sufficiently, as physical factors such as humidity, density and position of tags, the material of a laundry container, etc. interfere with the electromagnetic field. This makes 100% accuracy in one reading at best improbable, irrespective of the power of the reader used.

Instead of relying on hardware-based ‘brute-force’, our tracking process comprises multiple readings. Accepting regular incompleteness of readings, our software uses aggregation algorithms to create full accuracy.

At the time of its development, aggregation in textile tracking was so innovative that we were awarded a patent for its invention.

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There are countless descriptions of the Internet of Things, and even more fancy infographics to visualize functionalities and benefits. Basically, to explain how it all works. To use one such description: the Internet of Things is a system of interrelated computing devices, mechanical and digital machines, objects, animals or people that are provided with unique identifiers (UIDs), with the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.

That is quite a mouthful, and I think the most important part of that definition is in the last few words. Eliminating human interference from the process of data transfer is not a bad idea. We tend to impact on communication processes in a way that is not always beneficial to the quality of the outcome. Machines have no personal interest in whatever information is exchanged between them and, let’s be honest, they don’t make as many mistakes as we do. I find it amazing that in our technology-driven society it took so long to come up with such a brilliant idea.

I love the story how Coca Cola  back in 1982 modified one of their vending machine at Carnegie Mellon University to automatically report its inventory, and whether newly loaded drinks were cold or not. There is general consensus that vending machine was officially the first Internet-connected appliance. However, most people seem to agree it was Kevin Ashton of Procter & Gamble who actually named it Internet of Things. This was back in 1999, when he was working in supply chain optimization, and attempting to integrate an exciting technology called RFID into that process.

At LossLess Group, we connect textiles by attaching an RFID tag, enabling them to communicate with other RFID-enabled items through the Internet of Things. We have learned very early on not to interfere in that process, which probably explains why our tracking system is so successful.

At LossLess Group , we consider it one of our primary responsibilities to help flatten the curve of environmental mismanagement. We operate in interconnected industries that have a common denominator: Textiles, a one trillion dollar annual market.

According to the WWF, the production of inorganic cotton is a relevant factor for the destruction of freshwater ecosystems. Each year, cotton producers use as much as 25% of the world’s insecticides and more than 10% of the world’s pesticides. By using our system, customers can better predict future textile requirements.  This establishes a more efficient just-in-time pickup and delivery process with their laundries, and prevents overstocking because nobody knows if there is enough on site, or when clean linen will be delivered.

Also, making textiles traceable has a preventive effect on theft, resulting in fewer replacements and washes needed. Fewer wash cycles means lower usage of detergents, water, gas and electricity, and lower carbon emissions. Finally, failure to manage textiles when taken out of circulation has serious environmental consequences. Most textiles end up as waste, and are an increasing component of landfills, estimated to exceed 100 billion pounds globally, one third in the United States alone.

These materials can take up to 50 years to decompose. It is estimated some 95% of all textiles have the potential to be recycled, but only 15% are. Our lease model exists because we are able to attribute a residual value to textiles, making them fit for trading in a secondary market and re-use. We believe companies will implement our system not only to manage the lifecycle of their textiles, but also to contribute to social responsibility initiatives. Lower consumption of textiles, and more efficient wash and distribution models improve carbon footprint and reduce the use of natural resources.

Our tracking system TaaS, Textiles as a Service, is the product of integrating UHF RFID with other innovative technologies. RFID, an acronym for Radio Frequency Identification, is a wireless communication technology that uses radio waves to identify and track objects. Over the last 20 years, it has been commercialized, and is used in areas as diverse as supply chain and tracking cows in a field.

RFID belongs to a group of technologies referred to as Automatic Identification and Data Capture (AIDC). AIDC methods automatically identify objects, collect data about them, and transmit those data directly into computer systems with little or no human intervention. At LossLess Group, we use an ultra-high frequency form of the technology: UHF RFID.

UHF RFID offers a read range that allows us to track both individual items and bulk shipments. We focus primarily on industrial textiles that are used in hospitality and healthcare. You would be surprised to learn how many hotels and hospitals have difficulty managing their expensive bed sheets, pillowcases and towels.

In your daily life, you probably already work with a technology that is based on RFID protocols. When you pay for groceries by holding your credit card or mobile phone close to a chip card reader, the communication between the two is through NFC.

The difference between RFID and NFC is the distance over which communication takes place, and the name NFC makes this clear: Near Field Communication. It’s the reason you have to hold your phones so close together when you’re sharing photos with a friend of that great vacation in Florida.

My colleague Benoit de Backer has written an article on ‘The true cost of connected linen’. In it, he explains in some detail the various components of the UHF RFID tag we use at LossLess Group. Our focus has always been on delivering benefits from an integrated system, but you may be interested in a bit more detail of the underlying technology, in which RFID plays a big role.

Whilst asset leasing is a widely used financial construction, to date, it has never been applied to industrial textiles. In order for textile assets to be qualified as an entity that is fit for lease, it first needs to be transformed into a ‘true’ asset.

Historically, banks have shown no interest in offering financing solutions for textiles as these were considered a commodity with little or no residual value. This market gravitates around NFR (Non-Financial Risk) opportunities, and focuses heavily on assets that maintain high residual values, like technology and motor vehicles.

However, our control technology transforms a textile article into an assets with a demonstrable residual value at the end of its lifecycle. By doing so, we have created options to access an area of the finance market in which Asset Finance Companies (AFC) operate. This is a niche within the financial industry centred on a very specific product: asset and credit rights financing.

Effective January 2019, lease accounting is governed by IFRS 16, a standard that replaced IAS 17. For who’s interested: a little bit of history. In 2003, the International Accounting Standards Board (IASB) issued International Accounting Standard 17 (IAS 17), governing the treatment of leases. IAS 17 allowed considerable discretion in determining whether a lease was an ‘operating lease’, which could be held off the balance sheet, or a ‘finance lease’, which could not.

IAS 17 used a dual model classification approach. Finance leases were capitalized on the statement of financial position as an asset and liability, and reported on the profit and loss statement as an interest and depreciation expense. However, IAS 17 allowed companies to report operating leases in the footnotes of financial disclosures, which the IASB considered an accounting loophole.

Keeping operating leases off the balance sheet was believed to obscure the true nature of a company’s liabilities from potential investors. In an effort to increase transparency, IASB in 2016 announced the new accounting standard IFRS 16, which introduced significant changes to the treatment of leases, aimed at balance sheet transparency.

What is important for any business that incurs a variable cost for laundry related activities, is that a fixed lease cost is accounted below EBITDA. This is an important metric for any business as it is often used as the basis of performance and valuation.