Radio frequency identification : adoption of RFID in New Zealand supply chains

Abstract

In the last decade, Radio Frequency Identification (RFID) technology has been widely used in industries for controlling and monitoring purposes but has limited application in supply chain management. Passive tags are used in commercial offices for access control, while a more active and powerful tag is deployed in highways for electronic road toll collections. Other non-contact, close range methods are popular in subways and other public transport systems. The use of RFID in supply chain management is an emerging technological trend that has attracted a lot of attention in the U.S., Europe, and Asia. This is largely driven by the potential benefits that RFID technology is perceived to deliver in the supply chain, particularly, supply chain visibility. Major retailers and leading corporations around the globe are already testing and implementing RFID, and claiming to have achieved competitive advantages and return on their investments. It is, therefore, important to understand the adoption of RFID in New Zealand supply chains, so that appropriate actions can be taken to ensure that New Zealand companies are not lagging behind. This research study explores and explains the adoption of RFID in supply chains using exploratory survey and case study. The research questions are: 1. What specific benefits can be achieved in organisations by using RFID? 2. What are the barriers to realising these benefits? 3. How and why do organisations adopt or not adopt RFID in supply chains? Three factors were found to be important in the adoption of RFID in New Zealand supply chains. They are the compatibility of RFID with existing organisation's systems and values, the availability of supports to facilitate RFID adoption, and the readiness of the internal and external organisation's environment. It was also found that complexity of the technology and the relative advantage of using RFID were to a certain extent influencing users' perception of RFID compatibility. Dependency on trading partners was found to have some effects on RFID adoption. A theoretical framework of RFID adoption in supply chains is proposed. This framework helps to bring out the important factors in the adoption of RFID in supply chains. While most IS research is focused on individual technology adoption or on intra-organisational technology adoption, this research is focused on technology adoption that involves or has impacts on trading partners, that is, at supply chain level. It provides a three-dimensional evaluation framework which includes technological, organisational, and environmental aspects of inter-organisational technology adoption.