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Integration Stages in Supply Chain Management Used RFID

Wal-Mart and other companies mandating RFID see significant benefits in their own supply chains and they believe that, in the long term, RFID will also benefit their suppliers. The potential benefits of utilizing RFID technology for suppliers include reduction of operations costs, optimization of inventory management, and increased information accuracy. However, it is not clear that these possible benefits are always fully achieved. Zebra Technologies, an RFID tag producer, listed the top ten RFID concerns as cost, tag strength, reliability, resilience, data capacity, size, type, failure rate, data management, and implementation.

RFID is a technology that is used to describe a system that transmits the identity of an object wirelessly. The main components in RFID systems are the Tag, the Reader, and the RFID middleware that translates and integrates data for enterprise applications. A typical tag consists of a microchip attached to a radio antenna mounted on a substrate. A typical reader is a device that has one or more antennas that emit radio waves and receive signals back from the tag.

The benefits of RFID have been discussed in many articles. According to Lapide (2004), RFID benefits manufacturing suppliers with operational efficiencies and integrated supply chains. RFID also provides greater visibility of goods in both the internal and external supply chain network. Greater visibility eventually reduces overall supply chain inventory waste caused by the Bullwhip Effect. Lapide also points out that the major benefit of RFID in demand forecasting is leveraging downstream data to improve forecast accuracy. Many examples show supply chain benefits being realized with RFID are elimination of human errors and errors in product processing, improved operator efficiency, reduced out-of stock rate, and eliminated need for human operators to key in ID codes.

Implementing advanced information technology enhances the effectiveness and efficiency of supply chains. Enterprise Resource Planning (ERP), Electronic Data Interchange (EDI), Supply Chain Planning (SCP) and now RFID are all technologies that are helping supply chain partners to integrate their operations and strategies to lower the total system costs and to achieve a high customer service level.


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