Radio Frequency Identification Systems Within a Lean Supply Chain in a Global Environment

Radio Frequency Identification Systems Within a Lean Supply Chain in a Global Environment

Alan D. Smith (Robert Morris University, USA), Terry Stringer Damron (Austin Peay State University, USA), Susan Cockrell (Austin Peay State University, USA) and Amye M. Melton (Austin Peay State University, USA)
Copyright: © 2018 |Pages: 11
DOI: 10.4018/978-1-5225-2255-3.ch479
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Abstract

Managing supply chain relationships or working with suppliers to meet the goal of waste reduction are essential functions for successful businesses. There are several disruption risks associated in supply chains, of which few can argue that the disruption of communication, especially product identification and data capture, is the most important potential bottlenecks. It is important in a lean environment to identify potentially disruptive supply chain events for each node in the network. The use of RFID and related IT-intensive technologies can greatly aid management in its quest for more robust and agile supply chains, especially in an offshoring/outsourcing environment.
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Introduction

Supply Chain Management (SCM)

The ultimate goal of supply chain management (SCM) is to effectively and efficiently manage the movement of material or products through the supply chain cycle (Mateen & More, 2013; Park & Min, 2013). Such a lofty goal is accomplished only through the creation of strong partnerships with suppliers and customers, reduction of waste, and maintenance of product visibility to insure both quantity and quality meet predetermined requirements (Boerner, 2010a, 2010b). As SCM has matured as a discipline, so has the implementation of some tools to assist in achieving these goals, while still maintaining a green or sustainable presence (Berthon, Critenden, Desautels, & Pitt, 2010; Beamon, 1999). One such tool is the application of a lean production mode, which can assist in the achievement of waste reduction goals throughout the supply chain, especially when strategic partners apply the same principles. Another valuable tool is the utilization of large corporate IT-infrastructures and analytical data warehouses (Ha, Park, Lee, & Park, 2013; Mehrjerdi, 2009; Smith, 2015). As an added enhancement to a lean supply chain, the use of real time data from these IT-infrastructures gives firms better details of current information and product movement. The use of real-time data sharing from both intra-firm and external partners is ideal for more accurate forecasting and reliable model development.

A supply chain is the sequence of activities to get materials or products to end-users. A firm’s supply chain includes all steps from raw material to final product, as well as assurance of customer satisfaction (Smith, 2010, 2015; Smith & Minutolo, 2014). In the past, most firms have been concerned only with the work completed within their shop. Unfortunately, this has led to a rather disjointed supply chain characterized by higher inventory levels, poor forecasting ability, and limited visibility or products as a whole. The use of supply chain management as a means to remain competitive in a global economy is an essential component for financial success. In today’s global business environment, effective SCM is crucial to enhancing business performance. It is a collaborative effort on the part of management to position and run the supply chain in the most efficient and effective ways possible. This effort covers activities from product development, sourcing, production, and logistics, as well as the information systems needed to coordinate these activities.

Creating strong partnership with a select supplier base can allow for better communication and product knowledge (Browning & Heath, 2009; Cavaleri, 2008). Aligning firms with likeminded suppliers is a key activity of SCM. With the use of a select supply base, firms are better able to share pertinent data across supply chain members. Above all, this leads to better quality and reduced waste.

Key Terms in this Chapter

RFID-Embedded Technologies: RFID technologies are types of automatic data capture techniques that use a combination of active and passive senders and receivers to collect and store codified information for further uses. The implementation of such technologies should lead to improved managerial and/or supply chain performance. On the surface, there appears to be few drawbacks to implementing such technology into a production process, assuming it enhances performance and improves output of the product. The main issues surrounding the RFID applications are whether the initial costs and labor required to utilize this technology are worth it, and will result in a positive outcome of revenues.

Barcoding Technology: A long-term and very reliable type of AIDC technology, it is known for its very accurate and economical approaches to identity products and machine readable information from a variety of manufactured goods and services. Most barcodes use a type of standardized bars and spacing coding or symbology that is certified by an international standards body (GS1 System). This system provides for the universal global acceptance of many types of barcodes designed for a variety of shipping and identification applications. Example barcode formats that are in common use today include EAN/UPC, GS1 DataBar, GS1-128, ITF-14, GS1 DataMatrix, GS1 QR Code and Composite Components.

Electronic Product Code (EPC): EPC is a universal identifier that gives a unique identity to an item a RFID tag is affixed to. The identity is made to be unique so that each object is identifiable within all of the objects’ field.

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