Using RFID and Barcode Technologies to Improve Operations Efficiency Within the Supply Chain

Using RFID and Barcode Technologies to Improve Operations Efficiency Within the Supply Chain

Amber A. Smith-Ditizio (Texas Woman's University, USA) and Alan D. Smith (Robert Morris University, USA)
Copyright: © 2018 |Pages: 11
DOI: 10.4018/978-1-5225-2255-3.ch486
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Abstract

Managing supply chain relationships and/or working with suppliers to meet the mutual goals of operational efficiency and profitably can be enhanced through the use of RFID and barcode technologies. It is important in a lean environment to use RFID and related IT-intensive technologies to management more robust and agile supply chains. The areas of improvement, as demonstrated in a case study of NE Ohio regionally headquartered firms' involvement of positive outcomes from the strategic use of automatic identification and tracking technologies included successfully implemented applications as well as technological advancements and development.
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Introduction

Management Throughout the Value Chain

Managers in today’s business environment find themselves not only focused on internal processes such as production efficiency and employee relations, but also acknowledging the need to increasingly focus on management throughout the value chain. A number of researchers (Anderson & Dekker, 2009; Smith & Minutolo, 2014; Smith & Offodile, 2007; Wee, Peng, & Wee, 2010; Whitten, 2004) have identified some of the complex components of the supply chain to include global suppliers, contract manufacturers, company-owned product/service centers, third-party logistics providers, and transportation providers. Each relationship in the supply chain poses unique management opportunities and challenges. It is important for firms to understand the existing tools and strategies in the operations management field as well as the developing technologies and practices to better control costs and enhance efficiency in the supply chain. These same researchers frequently cite that the management of many companies are not operationally efficient (e.g., it can be seen from the cost of production is larger than needed, generating waste and non-value activities, and lack of vender collaboration and integration, to name a few related issues). Proper management of their supply chains can dramatically improve such efficiencies. In the following sections, a number of studies suggest that the use of RFID in supply chain management (SCM) can improve operational efficiency. This this chapter briefly discusses the contribution of knowledge regarding the use of RFID in the operational efficiency of the company.

In order to stay competitive in the marketplace, firms must do whatever is necessary to gain an edge and create value for their product. The desired end goal is to get the right product to the right customer at the right price at the right time; to accomplish this chain of events firms must search for methods to achieve a competitive edge. In this increasingly global economy, competition for buyers can be cut-throat because of the easy access to the international market and global materials because of the internet. Also, because of the need for speed, space issues, and timing, supply chain agreements frequently expect the raw materials to arrive at the right warehouse or facility at the right time, not a week before or later. Needing to stop production because a part is missing is disastrously expensive; also loss of goods or theft is frequently a concern with companies. So the issue is raised, how can a company make improvements in the supply chain to be more efficient? Value is created for the client when the item arrives to the client on the right day. When an item is late or there are stock-outs there is the risk of the bullwhip effect occurring, when the client over-orders because they fear they might have their order rationed. By tracking the orders and products with barcode and/or RFID technologies (Ha, Park, Lee, & Park, 2013; Kwok & Wu, 2009; Mateen & More, 2013; Mehrjerdi, 2009; Roberti, 2014), operational management have the enhanced ability to notice if there are inefficiencies within the organization and address them quickly, and if the capability allows, the client can see that they will receive their order exactly when they wished in the quantity that they desired. This technology can add value all throughout the supply chain, to include the warehouse, distribution, and returns management areas.

Key Terms in this Chapter

Operations Efficiency: Improving efficiency and reducing waste is a major challenge for hospitals and other patient care facilities looking to lower the cost of providing healthcare services. Far and away the largest contributor to operational costs in this industry is patient care activities. Since most clinical decisions involve managing products and medical supplies, finding ways to more efficiently manage supply chain activities can have a big impact on overall operational performance.

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.

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.

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 the objects’ field.

Automatic Identification and Data Capture Technologies (AIDC): Types of AIDC-related technologies to leave the human element out of the data collection and storage functions of information derived from manufacturing, integrated through the manufacturing process, types of authentication concerns and/or e-security strategies, and relationship links to customer profiles. Typical types of AIDC include, bar-coding, RFID, magnetic strips, touch memory, and smart cards.

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