Manufacturing Plant Smart Lockers: IoT Tool Management Reducing Tool Loss by 90%

Tool loss and unaccounted tool usage had been a persistent quality and cost problem for the factory. Each year's tool inventory — conducted by the toolroom supervisor during the factory's annual shutdown — revealed a gap between the tool register and the physical inventory. In the financial year preceding this project, the annual inventory identified 68 missing or damaged-beyond-use tools with a replacement value of BDT 8 lakh. Across the preceding three years, the cumulative tool loss exceeded BDT 22 lakh.

The toolroom management process relied on a manual sign-out system: workers requiring a tool approached the toolroom window, wrote their name, machine number, and tool ID in a paper sign-out book, and returned the tool when finished with a return entry. The system had several fundamental vulnerabilities. First, the sign-out book was often not completed correctly — workers who needed a tool urgently would take it from the accessible shelving without completing the book entry, planning to "fill it in later" and frequently forgetting. Second, tool returns were not verified against sign-outs at the end of each shift — tools signed out by a worker on the morning shift could remain unaccounted for until the worker returned to their workstation the following morning. Third, the paper book created no workflow for overdue tools — there was no mechanism to alert the toolroom supervisor when a signed-out tool had not been returned within a reasonable period.

The consequence of the sign-out failures was that the toolroom had no reliable real-time picture of which tools were out, who had them, and which had been out for an excessive period. The weekly tool count — a summary review the toolroom supervisor conducted every Friday — would typically reveal 8-12 tools that had been signed out by workers who had since completed and moved to a new machine setup, with no indication of whether the tool had been returned without a return entry or was genuinely still out with the worker.

The ISO 9001 audit conducted in 2025 identified tool management as a non-conformance: the auditor found that the factory's Tool Management Procedure required "documented evidence of tool custody, calibration status, and location at all times" — a requirement that the paper sign-out system could not satisfy. The non-conformance was classified as "Major" — requiring a corrective action plan and a follow-up assessment within 90 days. Failure to close the major non-conformance at the follow-up assessment would result in ISO 9001 certification suspension — a commercial catastrophe, as the factory's primary buyers made continued supply qualification conditional on current ISO 9001 certification.

The factory's quality manager also flagged a production quality concern: when a measuring instrument — a calibrated micrometer or a gauge block — was unaccounted for, the quality inspection records for parts measured during the period of non-accountability could be called into question. If the tool's calibration status was uncertain (because the tool had been out of the toolroom for an extended period without the toolroom supervisor knowing), the metrological traceability of measurements taken with it was compromised. This concern had already caused one minor customer quality complaint when the factory could not confirm the calibration chain for a precision gauge used during a quality hold investigation.

SSAL designed and installed 8 Gallagher intelligent locker units with 320 individual compartments, a barcode tool scanning system, and real-time dashboard management software.

Gallagher Intelligent Lockers — 8 Units, 320 Compartments: Eight Gallagher modular intelligent locker units were installed in the toolroom, replacing the open shelving system that workers had previously accessed informally. Each locker unit has 40 compartments of mixed sizes (small: 150x150x100mm for cutting tools and gauges; medium: 200x150x150mm for micrometers and caliper sets; large: 300x200x200mm for fixtures and large measuring instruments). Electronic latches on each compartment are controlled by the Gallagher locker controller — a compartment can only be opened by an authorized worker via their RFID card and a valid tool request, or by the toolroom supervisor's override card.

RFID Staff Card Authentication: Each worker's existing Gallagher RFID card (issued for factory gate access) is enrolled in the tool management system with their authorized tool category list — CNC machinists have access to cutting tool and gauge compartments; maintenance engineers have access to maintenance tool compartments; toolroom technicians have access to all compartments. A worker approaches the locker bank, presents their RFID card to the reader panel, selects the tool they require from the touchscreen interface (which shows available tools in their authorized category), and the specific compartment containing that tool pops open.

Barcode Tool Scanning — Chain of Custody: Each of the 2,400 tools in the factory's tool inventory was assigned a unique barcode label and registered in the Gallagher tool management software with its ID number, description, calibration status (for measuring instruments), and last calibration date. At check-out, the worker scans the tool's barcode with a handheld scanner at the locker station before removing it — creating an irrefutable record of which specific tool was taken. At return, the worker places the tool in the designated return scan station at the locker bank and scans the barcode before placing it in the return compartment — creating the return record. The toolroom supervisor reviews and accepts tool returns via the management dashboard.

Calibrated instruments (micrometers, calipers, gauge blocks) have a calibration status flag in the software. If an instrument's calibration has expired, its compartment remains locked regardless of the checking-out worker's authorization — the instrument cannot be issued until it has been recalibrated and the toolroom supervisor has updated the calibration date in the system. This directly addresses the metrological traceability concern: the system prevents use of an out-of-calibration instrument by physical means, not just by procedure.

Real-Time Dashboard and Overdue Alerts: The Gallagher tool management dashboard runs on the toolroom supervisor's workstation and on a display screen in the toolroom, showing:

• All currently checked-out tools (tool ID, description, checked-out to worker name, check-out time, duration)
• Overdue tools (any tool out for more than the standard issue period: 4 hours for cutting tools, 8 hours for measuring instruments, 24 hours for fixtures)
• Calibration status summary (count of instruments due for calibration in the next 30 days)
• Utilisation statistics by tool category and by production shift

Overdue alerts are sent automatically via SMS to the toolroom supervisor and the relevant production supervisor when a tool exceeds its standard issue period. The alert identifies the tool, the worker who checked it out, and the time since check-out.

Monthly Utilisation Reports: The system generates monthly reports showing tool check-out frequency by tool, by worker, and by machine. These reports provide the toolroom supervisor with utilisation data to identify under-used tools (candidates for disposal or sharing with other departments), over-used tools (candidates for additional stock procurement), and workers with atypically high check-out frequency (a potential indicator of tool retention or damage patterns worth reviewing).

ISO 9001 Compliance Documentation: The Gallagher system's check-out/check-in log, calibration status records, and overdue alert history together provide the documentary evidence required by the factory's ISO 9001 Tool Management Procedure. SSAL worked with the factory's quality manager to map the system's outputs to the specific documentation requirements of the procedure, ensuring that a future ISO 9001 auditor could verify compliance directly from system reports without requiring additional documentation.