An empirical investigation of the potential of RFID technology to enhance supply chain agility

Abstract

This empirical study examines the potential of RFID technology to increase the business agility and coordination of inventory supply chain systems. The bullwhip effect is a logistics management phenomenon in supply chain systems that is characterized by a lack of business agility. This study examines the potential of radio frequency identification (RFID) technology to increase the business agility and coordination of inventory supply chain systems, greatly reducing the bullwhip effect through timely information provided throughout the supply chain. An experiment of one group of 15 teams using a simulated RFID-enabled supply chain system compared mean team costs with those of a control group of 15 teams, providing empirical evidence that RFID-technology can increase a supply chain's business agility, as manifested by a reduction in inventory holding and stockout costs. © 2005 by International Federation for Information Processing. All rights reserved.