RFID as an Enabler of Materials Management: The Case of a Four Layer Construction Supply Chain

Among the array of innovative Information and Communication Technologies (ICTs) that could be deployed in the construction industry, radio frequency identification (RFID) technology stands out as a radical innovation that can overcome materials flows deficiencies. This paper, based on an exploratory field research, analyzes the potential of RFID for the management of materials across four layers of one construction supply chain. Results reveal that the RFID-enabled materials management application would lead to a more efficient communication within and between the four layers of the supply chain, more accurate inventories, a tighter project control, more efficient quality controls, and, overall, a smoother optimization of day-to-day materials management. Furthermore, the implementation of this RFID application will reduce project costs by an estimated 2%. Although this cost reduction (2%) appears to be marginal, the RFID project would have a decisive impact on the bottom line with an increase in profits ranging from 17% to 20%.