RFID in the supply chain: lessons from European early adopters

Purpose Radio frequency identification (RFID) is increasingly being presented as a technology with the potential to improve supply chain performance, but empirical evidence from early adopters is sparse. This paper aims to rectify this scarcity and contribute to a more informed discussion in and between academic and practitioner communities. Design/Methodology/Approach The paper is based on a conceptual model of factors influencing the success of adoption efforts. It then reports the results of a survey of 612 European supply chain managers, focusing on the 128 respondents who have begun RFID trials. Findings A significant influence on operational deployment is the presence of mandates from key customers requiring the technology’s use. Customer mandates also impact the anticipated benefits of a faster sales cycle and of enhanced systems integration, though the relationships are complex. By contrast, greater cost reduction benefits are anticipated in two industries where mandates are less common – industrial goods and logistics. Perceived organizational innovativeness positively impacts anticipated ROI from RFID. Companies adopting a ‘slap and ship’ approach are less likely to anticipate pricing benefits than those integrating RFID into enterprise systems Research Limitations/Implications The limitations of the paper include the limited sample size of early adopters. In addition, qualitative research is needed into RFID supply chain applications and into different approaches to IS integration of RFID, to inform future survey work. Practical Implications This paper informs supply chain managers and senior decision makers who are examining the potential of RFID technology. It offers guidance on what issues to look for when adopting this technology, approaches to take and the benefits that might be accrued. Originality/Valuer This paper offers a major contribution to understanding the current status of the adoption of RFID in European supply chains. This understanding is put in the context of the wider literatures on supply chain management and the adoption of information systems and te

Empirical Evidence of RFID Impacts on Supply Chain Performance

Purpose - The purpose of this paper is to investigate the actual benefits of radio frequency identification (RFID) on supply chain performance through the empirical evidence. Design/methodology/approach - The research reviews and classifies the existing quantitative empirical evidence of RFID on supply chain performance. The evidence is classified by process (operational or managerial) and for each process by effect (automational, informational, and transformational). Findings - The empirical evidence shows that the major effects from the implementation of RFID are automational effects on operational processes followed by informational effects on managerial processes. The RFID implementation has not reached transformational level on either operational or managerial processes. RFID has an automational effect on operational processes through inventory control and efficiency improvements. An informational effect for managerial processes is observed for improved decision quality, production control and the effectiveness of retail sales and promotions coordination. In addition, a three-stage model is proposed to explain the effects of RFID on the supply chain. Research limitations/implications - Limitations of this research include the use of secondary sources and the lack of consistency in performance measure definitions. Future research could focus on detailed case studies that investigate cross-functional applications across the organization and the supply chain. Practical implications - For managers, the empirical evidence presented can help them identify implementation areas where RFID can have the greatest impact. The data can be used to build the business case for RFID and therefore better estimate ROI and the payback period. Originality/value - This research fills a void in the literature by providing practitioners and researchers with a better understanding of the quantitative benefits of RFID in the supply chain

Reviewing the Drivers and Challenges in RFID Implementation in the Pharmaceutical Supply Chain

Counterfeiting is a global phenomenon that poses a serious financial threat to the pharmaceutical industry and more importantly jeopardizes public safety and security. Different measures, including new laws and regulations, have been put in place to mitigate the threat and tighten control in the pharmaceuticals supply chain. However, it appears that the most promising countermeasure is track-and-trace technology such as electronic-pedigree (E-pedigree) with Radio Frequency Identification (RFID) technology. In this study we present a framework exploring the antecedents and consequences of RFID applications in the pharmaceutical supply chain. The framework proposes that counterfeiting and E-pedigree regulation will drive the implementation of RFID in the pharmaceutical supply chain, which in turn provides strategic and operational benefits that enable competitive advantage. Meanwhile, the implementation of RFID requires overcoming many operational, technical and financial challenges. The framework provides a springboard that future study can explore using empirical data

Accessing Antecedents and Outcomes of RFID Implementation in Health Care

This research first conceptualizes, develops, and validates four constructs for studying RFID in health care, including Drivers (Internal and External), Implementation Level (Clinical Focus and Administrative Focus), Barriers (Cost Issues, Lack of Understanding, Technical Issues, and Privacy and Security Concerns), and Benefits (Patient Care, Productivity, Security and Safety, Asset Management, and Communication). Data for the study were collected from 88 health care organizations and the measurement scales were validated using structural equation modeling. Second, a framework is developed to discuss the causal relationships among the above mentioned constructs. It is found that Internal Drivers are positively related to Implementation Level, which in turn is positively related to Benefits and Performance. In addition, Barriers are found to be positively related to Implementation Level, which is in contrast to the originally proposed negative relationship. The research also compares perception differences regarding RFID implementation among the non-implementers, future implementers, and current implementers of RFID. It is found that both future implementers and current implementers consider RFID barriers to be lower and benefits to be higher compared to the non-implementers. This paper ends with our research implications, limitations and future research

A Tough Pill to Swallow? The Lessons Learned from Mandatory RFID Adoption

On some occasions, information technology (IT) is mandated rather than voluntary. However, the impact of mandatory IT adoption receives little attention in the operations management literature, and the literature shows divergent predictions about how mandatory IT affects financial performance. Using the case of mandatory radio-frequency identification (RFID) adoption in manufacturing industries, this study applies long-horizon event study to examine 95 U.S. listed firms that have adopted mandatory RFID. The resultsshow that firms achieve significantly strong financial performance from mandatory adoption. Mandatory RFID is particularly beneficial for firms with good financial health, late adopters and high-clockspeed firms.The current study provides a deeper understanding of supplier benefits from mandatory systems supported by dominant customers. Based on the lessons learned from past mandatory RFID adoption, the present study can serve as guidance for future projects and contribute to the literature on operations management and information system

Radio frequency identification (RFID) technologies for locating warehouse resources: A conceptual framework

Copyright @ 2012 Information Technology SocietyIn the supply chain, a warehouse is a crucial component for linking all chain parties. It is necessary to track the real time resource location and status to support warehouse operations effectively. Therefore, RFID technology has been adopted to facilitate the collection and sharing of data in a warehouse environment. However, an essential decision should be made on the type of RFID tags the warehouse managers should adopt, because it is very important to implement RFID tags that work in warehouse environment. As a result, the warehouse resources will be easily tracked and accurately located which will improve the visibility of warehouse operations, enhance the productivity and reduce the operation costs of the warehouse. Therefore, it is crucial to evaluate the reading performance of all types of RFID tags in a warehouse environment in order to choose the most appropriate RFID tags which will enhance the operational efficiency of a warehouse. Reading performance of active and passive RFID tags have been evaluated before while, semi-passive RFID tag, which is battery-assisted with greater sensitivity than passive tags and cheaper than active tags, has not been examined yet in a warehouse environment. This research is in- progress research and it seeks to (i) provide a general overview of the existing real-time data management techniques in tracking warehouse resources location, (ii) provide an overall conceptual framework that can help warehouse managers to choose the best RFID technologies for a warehouse environment, (iii) Finally, the paper submits an experiment design for evaluating the reading performance of semi-passive RFID tags in a warehouse environment

A Field Study of RFID Deployment and Return Expectations

Radio Frequency Identification (RFID) technology promises to transform supply chain management. Building on previous research in information systems and supply chain management, this paper proposes a theoretical framework for RFID adoption and benefits, and tests the framework using data on U.S. firms. Our analysis suggests that there is a positive association between information technology (IT) application deployment and RFID adoption. We find that RFID implementation spending and partner mandate are associated with an expectation of early return on RFID investment, and a perceived lack of industry-wide standards is associated with an expectation of delayed return on RFID investment. These results suggest that firms with broad IT application deployment and a critical mass of RFID implementation spending are more likely to report early returns from RFID deployments. This paper extends previous research to understand the relationship between organization characteristics and adoption and expected benefits of the emerging RFID technology

Effects of RFID Technology on Profitability and Efficiency in Retail Supply Chains

Many companies do not consider adopting radio frequency identification, or RFID, technology because of the uncertainty of return on investment and the lack of business cases demonstrating its profitability or efficiency. This study investigates whether companies that have adopted RFID technology have better financial performance ratios in the U.S. retail industry. Companies using RFID technology have significantly higher operating income margins, lower inventory ratios, and lower per-employee costs. A regression analysis shows that inventory efficiency and cost efficiency do impact profit margins. The analysis also reveals that maintaining a low-level inventory ratio creates higher profit margins, but more research is still needed to demonstrate that higher profits result when companies adopt RFID technology

Effects Of RFID Technology On Efficiency And Profitability In Retail Supply Chains

Ten years have passed since Wal-Mart’s public announcement about its RFID technology adoption plan in 2003. Some large competitors of Wal-Mart in the U.S. retail industry jumped on the trend of RFID technology adoption. However, there has been a slowdown of RFID technology adoption since 2008. Many U.S. retailers do not consider adopting RFID technology because of the uncertainty of return on investment and the lack of business cases demonstrating its profitability or efficiency. This study investigates whether RFID companies have better financial performance ratios in the U.S. retail supply chains. RFID retailers have significantly lower days-in-inventory and lower per-employee costs. Compared with pre-RFID, the RFID retailers do not improve profit ratios after they adopted it, but their days-in-inventory ratio and sales efficiency improve significantly. Panel data regression analyses show that inventory management efficiency does impact gross margins, but the impact of cost efficiency is negligible. RFID retailers have a positive relationship with gross margin increases. In summary, it could be stated that introducing RFID improves inventory management efficiency but we do not know yet if RFID technology adoption also contributes to profitability in U.S. retail industry