The impact of RFID technology on logistics processes of the fashion industry supply chain

Abstract

This paper aims at quantitatively assessing the impact of radio frequency identification (RFID) technology and electronic product code (EPC) system on the main processes of the fashion industry supply chain. A fashion supply chain, composed of a distribution centre (DC) and a retail store (RS), is examined. A questionnaire survey and several site visits were performed to collect both quantitative and qualitative data related to current (AS IS) supply chain processes of each player investigated. Starting from data collected, re-engineered (TO BE) procedures were designed, hypothesising the implementation of RFID technology. Grounding on the gap between AS IS and TO BE scenarios, a detailed investment evaluation was performed in order to assess the profitability of RFID and EPC implementation in the fashion supply chain, both for each player and for different supply chain configurations. Results show that RFID and EPC implementation is profitable under several scenarios examined, and that the profitability of the RFID investment is affected by three main factors, namely: (i) the AS IS processes of DC and RSs; (ii) the supply chain structure, and in particular the number of RSs composing the supply chain and (iii) the turnover increase at RSs, generated by RFID implementation. Outcomes of this study provide useful guidelines for the implementation of RFID and EPC in the fashion industry supply chain.

Keywords:

• RFID
• EPC
• fashion industry
• feasibility study
• investment evaluation

Acknowledgements

The authors wish to express their gratitude to three anonymous reviewers whose constructive and helpful comments led to a substantial improvement of the earlier version of the manuscript.

Notes

^1. The list is not exhaustive, since, for confidentiality purposes, it is limited to companies that agreed their participation in the research to be made public.