The impact of RFID technology on logistics processes of the fashion industry supply chain

Abstract

This paper aims at quantitatively assessing the impact of radio frequency identification (RFID) technology and electronic product code (EPC) system on the main processes of the fashion industry supply chain. A fashion supply chain, composed of a distribution centre (DC) and a retail store (RS), is examined. A questionnaire survey and several site visits were performed to collect both quantitative and qualitative data related to current (AS IS) supply chain processes of each player investigated. Starting from data collected, re-engineered (TO BE) procedures were designed, hypothesising the implementation of RFID technology. Grounding on the gap between AS IS and TO BE scenarios, a detailed investment evaluation was performed in order to assess the profitability of RFID and EPC implementation in the fashion supply chain, both for each player and for different supply chain configurations. Results show that RFID and EPC implementation is profitable under several scenarios examined, and that the profitability of the RFID investment is affected by three main factors, namely: (i) the AS IS processes of DC and RSs; (ii) the supply chain structure, and in particular the number of RSs composing the supply chain and (iii) the turnover increase at RSs, generated by RFID implementation. Outcomes of this study provide useful guidelines for the implementation of RFID and EPC in the fashion industry supply chain.

Evaluating RFID opportunity through process analysis

“…As reported by several authors (Tzeng et al, 2008;Fera et al, 2013), the development of an RFID project is a complex task, involving not only "buying hardware and software", but also the reengineering of internal processes and provision of a new definition of procedures and activities for RFID implementation, according to the business process re-engineering (BPR) approach (Hammer, & Champy, 1993;Bevilacqua et al, 2011). The traditional methodology is based on business process analysis as a tool to map, document and understand processes, and includes, among others, the following steps (Bottani et al, 2008Bottani, Ferretti et al, 2009):…”

“…Sometimes only the more promisingly profitable logistic processes are considered, in order to obtain an initial idea of the real advantages that this technology may bring. Starting from the as-is analysis, the feasibility assessment should provide to-be re-engineering scenarios, hypothesising a new definition of procedures, activities and operations that perform the same processes adopting RFID technology (Bottani, Ferretti et al, 2009). With the introduction of the new technology, some of the steps in each single process may take less time or may even no longer be necessary.…”

A model to evaluate logistics RFID-based investments economic effectiveness in the apparel field

“…RFID technology has the potential to solve many key issues for the fashion supply chain (Bottani et al, 2009;Bertolini et al, 2012) and some studies have already suggested its possible application in this context. As an outcome of a recent survey (Osservatorio RFID, School of Management del Politecnico di Milano, "RFID: alla ricerca del valore ", 2007), the most used applications considering the ones available in the field, are those related to some kinds of improvement in operations efficiency; more than 60% of the sample applications considered are running in Operations Support, Warehouse Logistics, Items Identification and Asset Management areas.…”

“…Moreover, the Aberdeen report (Aberdeen, 2005) about the main obstacle to the adoption of RFID-based solutions shows that the majority of the firms interviewed have encountered difficulties in the understanding of their validity, both in economical (measurable) terms and efficiency/effectiveness related (not measurable) ones. Other emerging barriers concern cost related issues, as infrastructure and tag costs (Bottani et al, 2009).…”

Understanding the Organizational Impact of Radio Frequency Identification Technology: A Holistic View

“…To date, a few studies have tried to investigate the impact of RFID adoption and deployment on retail supply chains. For instance, Soon and Gutiérrez (2008) explored the effects of RFID implementations on supply chain management, while Hardgrave et al (2009) studied the impact of RFID on inventory accuracy, and Bottani et al (2009b) investigated the impact of RFID on logistics processes. Unfortunately, none of this prior work has achieved a holistic view of RFID's impact on organizations, especially along the lines of IT infrastructure, business intelligence, and decision making.…”