Integrating the Supply Chain with RFID: A Technical and Business Analysis

This paper presents an in-depth analysis of the technical and business implications of adopting Radio Frequency Identification (RFID) in organizational settings. The year 2004 marked a significant shift toward adopting RFID because of mandates by large retailers and government organizations. The use of RFID technology is expected to increase rapidly in the next few years. At present, however, initial barriers against widespread adoption include standards, interoperability, costs, forward compatibility, and lack of familiarity. This paper describes basic components of an RFID system including tags, readers, and antennas and how they work together using an integrated supply chain model. Our analysis suggests that business needs to overcome human resource scarcity, security, legal and financial challenges and make informed decision regarding standards and process reengineering. The technology is not fully mature and suffers from issues of attenuation and interference. A laboratory experiment conducted by the authors shows that the middleware is not yet at a “plug-and-play” stage, which means that initial adopters need to spend considerable effort to integrate RFID into their existing business processes. Appendices contain a glossary of common RFID terms, a list of RFID vendors and detailed findings of the laboratory experiment.