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RFId adoption in the FMCG supply chain: an interpretative framework

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

Supply Chain Management

ISSN: 1359-8546

Article publication date: 9 August 2011

Abstract

Purpose

In 2003, Walmart issued a sensational RFId mandate for its top 100 suppliers, including a detailed deployment plan under compelling deadlines. After seven years, very little of that mandate has become a consolidated industry practice. This paper aims to try to offer a complete and thorough explanation of the reasons behind this fact, providing a sound strategic view of what is happening and could happen in the future.

Design/methodology/approach

The study is based on a twofold methodological approach: first, it relies on an in‐depth literature review covering the assessment of RFId applications in the fast moving consumer goods (FMCG) industry; second, it leverages on a five‐year research program carried out by the RFId Solution Center of Politecnico di Milano in cooperation with GS1 Italy, which provided both quantitative data (used to develop and feed an analytical profitability assessment model) and qualitative knowledge to understand the “soft” implications of RFId adoption in the industry.

Findings

Despite the great potential of RFId technology, there are still some significant barriers preventing its diffusion. Case‐level tagging is required to enable a substantial redesign of the supply chain, but profit‐sharing and reading reliability should be carefully considered to ensure economic and technological feasibility. The comparison with the fashion industry evidences some key success factors of RFId; while some of them are industry‐specific, others can be replicated in the FMCG as well, but further efforts are still needed.

Originality/value

This is one of the first attempts to provide a comprehensive analysis of RFId potential in the FMCG supply chain, taking into account all the major factors involved. Moreover, the quantitative results illustrated in the paper could be a valuable support to companies in defining their RFId strategies.

Keywords

Citation

Balocco, R., Miragliotta, G., Perego, A. and Tumino, A. (2011), "RFId adoption in the FMCG supply chain: an interpretative framework", Supply Chain Management, Vol. 16 No. 5, pp. 299-315. https://doi.org/10.1108/13598541111155820

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited