An analysis of the impact of RFID technology on inventory systems

Abstract

Nowadays, most enterprises undertake large investments in order to implement information systems that support decision making for managing inventories. Nevertheless, if data collected from the physical processes used to feed these systems are not correct, there will be severe impacts on business performance. Inventory inaccuracy occurs when the inventory level in the Information System is not in agreement with the physically available inventory. In this chapter, we first describe the major factors generating inventory inaccuracy. Then, we provide situations permitting to manage an inventory system subject to errors. We provide a framework to model the inventory inaccuracy issue and focus on the impact of advanced identification systems, such as that provided by RFID technology, in improving the performance of a supply chain subject to inventory inaccuracies. © 2011 Springer-Verlag Berlin Heidelberg.