Applying RFID to reduce bullwhip effect in a FMCG supply chain

Abstract

This paper provides a quantitative analysis of the reduction in the bullwhip effect, and the potential benefits thanks to real-time visibility of production flows provided by the Radio Frequency Identification (RFID) technology and other technologies. This paper is based on a Fast Moving Consumer Goods (FMCG) supply chain; the supply chain is composed of there echelons, namely manufacturers, distributors and retailers of FMCG, the RFID-based intra-SC system is implemented for the enterprise's warehouse in Jiangsu, china. The result show that RFID application can dramatically improve the efficiency of FMCG supply chain, and real-time visibility of supply chain can markedly reduce the bullwhip effect, and substantially affecting the economical profitability of the whole FMCG supply chain. © 2012 Springer-Verlag GmbH.