Factors Affecting Willingness of Industries to Adopt Radio Frequency Identification (RFID)

Factors Affecting Willingness of Industries to Adopt Radio Frequency Identification (RFID)

Amarpreet S. Kohli (University of Southern Maine, School of Business, Portland, ME, USA) and Cheng Peng (Department of Mathematics and Statistics, University of Southern Maine, Portland, ME, USA)
DOI: 10.4018/IJISSCM.2017070102

Abstract

This research examined the willingness of businesses and industries to adopt RFID. It was postulated that motivation to adopt RFID is influenced by the technological context, organizational factors, and perceived benefits of using RFID. Data was collected from Council of Supply Chain Management Professionals members using a 19-question web-based survey. Relative advantage that firms can achieve and the perceived benefits in improving product quality and information sharing along with better traceability in the supply chain were significant predictors of RFID adoption. Within the technological contexts, the visible obstacles of RFID adoption through quality of transmission and reliability, understanding of overly high investment costs, and importance of the privacy concerns were all significant. The IT readiness of a firm was also a significant predictor of RFID adoption in the organizational factor, however the size of an organization was not at all linked to the RFID adoption decisions. The results point to a number of important conclusions that are informative for various business and industries that might be contemplating to adopt RFID technology in their operations.
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Literature Review

Benefits

Strategic (competitive factors), tactic (visibility along the Supply Chain), and operational (assets and efficiencies) benefits have been identified with RFID adoption across the supply chain (Pedroso et al., 2009). Potential benefits identified from prior research studies are: improved inventory management and visibility, reduced costs for logistical operations, improved customer service, improved security, improved efficiency of business operations, automatic non- line-of-sight scanning, labor reduction due to increased automation, enhanced visibility of supply chain, improved asset tracking and inventory management, item level tracking, traceable warranties and targeted product recall, improved reliability, quality control and regulation, improved utilization of resources, durability, and the capacity to hold more information were some of the reasons (Leimeister et al., 2009, Lim & Koh, 2009; Osyk et al., 2012; Mehrjerdi, 2011b; Prater et al., 2005; Visich et al., 2009). Al Kattan and Al Khudairi (2010) also documented, using simulation models in SCM systems, that regardless of demand distribution pattern and customer order rate using RFID technology adoption improved inventory control.

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