The Business Case for RFID; Challenges and Opportunities

Abstract:     
RFID (Radio Frequency Identification Devices) are one of the next generations of technologies which could have widespread repercussions through business and society. There is a low level of RFID knowledge in business with much of the understanding and orientation currently held by technologists as they battle with both the technology itself and the standards. However as the benefits of RFID become more apparent, strategists and top management are beginning to pay attention. Although RFID has been available since the early twentieth century, most potential users of RFID and in turn the strategic decision makers with regard to RFID are not as yet familiar with the issues, opportunities and challenges of such an advanced technology.

This paper explores the potential of RFID and sets it in the context of the assimilation of information technology. This approach capitalises on what we have learnt from the diffusion of other technologies into business, many of which were seen as 'magic bullets' or with the potential to provide optimum solutions but which have not lived up to expectations (Markus, 1997; Drummond, 2000; Verleye and Marez, 2005). This paper takes a uniquely strategic and business information perspective in relation to the challenges and value that RFID deployment can bring to organisations, particularly along national and international supply chains. Organisation must assess how to drive inventory and cycle time down, while managing the world-wide physical and information flows created by RFID. It is contested that unless these issues are addressed and dealt with properly, management runs the risk of letting uncertain global environment defeat the investment proposal of RFID.

Keywords: RFID, Global Supply Chains, Information Technology

JEL Classifications: M30, M31

Working Paper Series