The Value to the Customer of RFID in Service Applications

Decision Sciences, Vol. 40, No. 3, pp. 477-512, 2009

59 Pages Posted: 21 Feb 2011 Last revised: 2 Jul 2014

See all articles by Gregory R. Heim

Gregory R. Heim

Texas A&M University - Department of Information & Operations Management

William R. Wentworth

Deloitte Touche Tohmatsu

David Xiaosong Peng

University of Houston - C.T. Bauer College of Business

Date Written: February 17, 2011

Abstract

This paper examines how customer value may be affected by deploying radio frequency identification (RFID) technologies within service environments. Business articles promote operational cost savings and improved inventory management as key benefits of deploying RFID. In response, service firms are using RFID to reengineer service transactions and customer touchpoints. Customers may view these RFID applications to offer both benefits and drawbacks. This paper demonstrates that individuals will recognize far more of value from RFID service applications than just cost savings and inventory availability. The paper analyzes qualitative survey responses on the value from RFID to identify a broad list of value objectives – benefits and drawbacks – associated with RFID service applications. The paper contributes to academic literature by providing salient value dimensions for return on investment models of service RFID applications, and for future empirical analyses of means-ends and value-profit chain models. Managers can use the list of dimensions to develop rich business cases for evaluating the benefits and costs from enhancing service operations with RFID. The identified drawbacks also provide managers with a resource for understanding potential risks of RFID applications.

Keywords: Service Development, Radio Frequency Identification (RFID), Customer Value, Service Operations, Decision Making

JEL Classification: D20, M, L8, Q14, M11

Suggested Citation

Heim, Gregory R. and Wentworth, William R. and Peng, David Xiaosong, The Value to the Customer of RFID in Service Applications (February 17, 2011). Decision Sciences, Vol. 40, No. 3, pp. 477-512, 2009. Available at SSRN: https://ssrn.com/abstract=1763436

Gregory R. Heim

Texas A&M University - Department of Information & Operations Management ( email )

320 Wehner Building
4217 TAMU
College Station, TX 77843-4217
United States
979-845-9218 (Phone)

HOME PAGE: http://mays.tamu.edu/info/

William R. Wentworth

Deloitte Touche Tohmatsu ( email )

Paramount Plaza
Midtown Manhattan
New York, NY AB
United States

David Xiaosong Peng (Contact Author)

University of Houston - C.T. Bauer College of Business ( email )

Houston, TX 77204-6021
United States

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