EROI development and validation of a framework to assess the return on the environment of RFID deployment

Abstract

This study is grounded in the growing significance of environmental sustainability and the widespread adoption of RFID technology across various industries and is aimed to explore the influence of RFID implementation in supply chains by developing a tool that calculates the net balance of CO2 annual emissions. The tool, known as “Return on the Environment” (EROI), is based on a widely accepted environmental assessment method and it calculates the Global Warming Potential (GWP100) incurred and avoided at various stages in the supply chain strictly related to RFID technology introduction. To validate the tool, two RFID deployments have been assessed: one involving a pharmaceutical product tagged on its secondary packaging to monitor the flow of products through the distribution channel, and another a medical device tagged on both primary and secondary packaging to oversee product flow from the supplier distribution center to the hospital operating theatres. In both cases, the results indicate that implementing RFID technology reduced GWP100 compared to the scenarios without RFID. This was primarily due to decreased product shrinkage, lower missing or expired products, and reduced additional transportation due to shipping errors. The tool is versatile and it could be applied to any type of product, serving as a source of inspiration for those who want to assess the sustainability of RFID technology not only from an economic perspective, i.e. ROI calculation, but also from an environmental view. Future work will address the third level of sustainability, RFID social sustainability, that is the impact RFID deployments may have on empowering people, improving staff and employees working conditions, and creating possibilities for high-value job opportunities.