Empirical evidence of RFID impacts on supply chain performance

Abstract

PurposeThe 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/approachThe 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).FindingsThe 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/implicationsLimitations 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 implicationsFor 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/valueThis 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.