Technical and economic aspect of RFID implementation for asset tracking

Abstract

This paper aims to assess the economic feasibility of a technological solution, based on radio frequency identification (RFID) technology, for asset management in the context of fast-moving consumer goods (FMCG). Three case study companies are examined, respectively, operating as manufacturers of FMCG, pallet pooler and retailer, to be representative of an integrated logistics channel. Site visits and direct interviews are performed to detail the main processes assets are subjected to and the way such processes are currently managed, as well as to derive quantitative values concerning such processes. Based on the analysis, re-engineered procedures have been developed hypothesising RFID deployment for asset management. Re-engineered procedures were validated by a panel of experts, whose members operate in the logistics, sales and information technology functions of about 15 companies, either manufacturers or distributors of FMCG. On the basis of the comparison between current and re-engineered processes, a detailed economic evaluation is performed for each case study examined to assess the economic suitability of the solution proposed. Results show that RFID deployment allows both manufacturer and pallet provider to achieve an economic profitability on a 5-year period; conversely, the investment is less profitable for the distributor, mainly due to the substantial costs arising for RFID implementation at all retail stores. Outcomes of the study could serve as a guideline for the implementation of RFID technology for asset tracking.

Keywords:

• radio frequency identification
• asset tracking
• case studies
• feasibility study