To read this content please select one of the options below:

A quantitative model for the introduction of RFId in the fast moving consumer goods supply chain: Are there any profits?

Giovanni Miragliotta (Department of Management, Economics and Industrial Engineering, Politecnico di Milano, Milano, Italy)
Alessandro Perego (Department of Management, Economics and Industrial Engineering, Politecnico di Milano, Milano, Italy)
Angela Tumino (Department of Management, Economics and Industrial Engineering, Politecnico di Milano, Milano, Italy)

International Journal of Operations & Production Management

ISSN: 0144-3577

Article publication date: 18 September 2009

4432

Abstract

Purpose

The purpose of this paper is to describe an analytical model to assess the costs and benefits of radio frequency identification (RFId) applications in the fast moving consumer goods (FMCG) supply chain.

Design/methodology/approach

The paper is based on an in‐depth literature review and a classification of the main contributions regarding the assessment of RFId applications. The impact of RFId technology on supply chain processes has been modelled using an activity‐based approach. An extensive, six‐month discussion and refinement process with the logistics and supply chain managers of 30 FMCG companies is conducted to validate the model and to collect the required inputs.

Findings

Pallet‐ and case‐level taggings have been explored. The former scenario shows limited benefits, whereas the actual potential of RFId becomes clear in the latter. The profitability of these projects is significantly affected by the costs of RFId tags and by the characteristics of the base‐line supply chain in terms of efficiency, quality requirements and, of course, product features. The model provides a clear assessment of how and when a positive return on investment can be achieved, even with today's technology (in terms of costs and performances).

Originality/value

This is one of the first attempts to provide a comprehensive analysis of the costs and benefits of an RFId application, taking into account all the major factors involved. The model can be a valuable support to manufacturers and retailers in evaluating their investments.

Keywords

Citation

Miragliotta, G., Perego, A. and Tumino, A. (2009), "A quantitative model for the introduction of RFId in the fast moving consumer goods supply chain: Are there any profits?", International Journal of Operations & Production Management, Vol. 29 No. 10, pp. 1049-1082. https://doi.org/10.1108/01443570910993483

Publisher

:

Emerald Group Publishing Limited

Copyright © 2009, Emerald Group Publishing Limited

Related articles