Assessing the Impact of RFID on Return Center Logistics
30 Pages Posted: 2 Sep 2006
Date Written: June 2006
RFID technology is being widely embraced in the supply chain, by manufacturers, retailers, and logistics firms. Although its advocates include retail giants like Wal-Mart, not everyone is enthusiastic about its benefits. It is not clear whether RFID is a boon or a curse to the supply chain: the growing market size of this technology may just be an issue of compliance.
With a view to establishing the real benefits of RFID, we conducted a field study with GENCO, a third party logistics company that deployed RFID at one of its outbound logistics operations with a goal to reducing customer claims. Our analysis found that the RFID implementation had a significant impact on the outbound process: The intensity of claims incidence fell substantially after RFID deployment. After controlling for other factors in our model, we confirm that RFID was a key factor that contributed to the positive outcomes at this return center. The current study underscores the potential of RFID for today's businesses.
Keywords: RFID, business value, process level analysis, reverse logistics, supply chain
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