Radio frequency identification (RFID)

Abstract

Purpose The paper's purpose is to show how product coding by radio frequency identification (RFID) can provide better benefits with respect to supply‐chain management than barcode reading, and to discuss important practical obstacles to adoption of the new technology, particularly the high set‐up and implementation cost. Design/methodology/approach This paper analyses feasibility studies of RFID systems in relation to the structure and application of the technology in an industrial supply chain. Findings RFID technology offers the prospect of improved efficiency by more sophisticated inventory management, delivering lower costs and improved results. It also offers opportunities to reduce theft and counterfeiting. More accurate demand analysis furthermore improves marketing planning. However, a main disadvantage is the high set‐up and implementation cost. Other technical concerns are reliability and electronic interference. Perceived obstacles thus militate against adoption. Originality/value This paper evaluates the implementation of RFID from a managerial point of view, balancing benefits against challenges.