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Contribution of RFID technologyto better management of
fashion
supply chainsSusana Garrido Azevedo
Department of Business and Economics, University of Beira
Interior, Covilha,Portugal, and
Helena CarvalhoUNIDEMI, Departamento de Engenharia Mecanica e
Industrial,
Faculdade de Ciencias e Tecnologia da Universidade Nova de
Lisboa,Caparica, Portugal
Abstract
Purpose The purpose of this paper is to explore the deployment
of RFID technology in fashionsupply chain management (FSCM). It
highlights the contribution of RFID to FSCM, supporting
fasterlogistics activities, with greater products quality, cheaper
and with more responsiveness, improvingcustomer satisfaction.
Design/methodology/approach An inductive theory building
approach is used to develop aconceptual model for RFID deployment
in the FSCM context. Secondary data analysis from a sampleof six
companies supports the identification and discussion of the real
advantages, disadvantages andbarriers felt by companies in a
fashion supply chain when RFID technology is introduced.
Findings The logistics activities in the fashion supply chain
where RFID technology is most widelydeployed are: shipping
operations, tracking of raw materials, semi-finished components and
finishedgarments, collecting finished goods, handling processes,
tracking containers, tracking products fromfactory to store,
receiving operations, monitoring, and sorting of merchandise. In
most cases, thetagging operation is performed at some stage in the
production process and tag reading occurs atdistribution centres or
at stores. The main barrier identified to the deployment of RFID is
the problemof interoperability. The costs associated with the
technology are the main disadvantage pointed out bythe
companies.
Practical implications A conceptual framework is proposed
exploring the RFID advantages anddisadvantages across the fashion
supply chain, the main barriers to its introduction and the
fashionsupply chain logistics activities in which RFID could be
found. This represents an importantcontribution to companies in
this industry to become more aware of RFID. Also, new companies
whichare thinking of introducing this technology could overcome its
barriers easily, improving itsadvantages and minimizing its
disadvantages.
Originality/value This paper explores the deployment of RFID in
the fashion supply chain fromthe perspective of technology
users.
Keywords Radio frequency identification, Fashion industry,
Supply chain management, RFID,Advantages, Disadvantages, Logistics
activities, Secondary data
Paper type Research paper
The current issue and full text archive of this journal is
available at
www.emeraldinsight.com/0959-0552.htm
Helena Carvalho was supported by a PhD fellowship from Fundacao
para a Ciencia e Tecnologia(SFRH/BD/43984/2008). The authors would
also like to thank Professor V. Cruz-Machado for hisassistance
during the text review.
IJRDM40,2
128
Received 25 February 2011Revised 17 June 2011Accepted 11
September2011
International Journal of Retail& Distribution ManagementVol.
40 No. 2, 2012pp. 128-156q Emerald Group Publishing
Limited0959-0552DOI 10.1108/09590551211201874
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1. IntroductionIn the current business environment, where
customer demand promotes high levels ofdifferentiation and products
have a short life-cycle, organizations need to be innovative,not
only in their own processes, but also across the processes of the
whole supply chain.RFID is an innovative automatic identification
technology, which identifies and gathersdata without human
intervention, or data entry (Wyld, 2006). RFID has been deployed
toimprove supply chain processes such as handling materials with
better efficiency,managing assets more effectively, and improving
availability of products (Reyes andJaska, 2006). The tracking of
items (e.g. assets, containers, or reusable bins) has
becomeautomated by the extensive use of RFID throughout the supply
chain (Tajima, 2007). It isexpected that this technology will
contribute to high levels of innovation in almost allsupply chain
processes (Sheffi, 2004), as it is an important tool for
organizations andsupply chains wishing to sustain their competitive
advantage (Mehrjerdi, 2010). Visichet al. (2009) also suggest that
RFID enables process innovation and supply chainredesign to achieve
competitive advantage by increasing supply chain
transparencythrough the dissemination of large amounts of accurate
and real-time data to enhance thedecision making process. Access to
shared information in the supply chain is at the heartof an RFID
initiative (Boeck and Wamba, 2008).
Although commercial applications of RFID date back to the 1960s,
the use of RFIDin supply chain management is relatively new. RFID
deployment is diverse andgrowing in different sectors, for a
variety of purposes. In Europe and the USA, RFIDhas been adopted by
some major retailers. In 2003, the worlds leading
retailers,including Metro Group in Germany, Marks & Spencer in
the UK, and Wal-Mart in theUS, mandated the use of RFID in tracking
supplies (Roberti, 2003). Since then, manyother retailers in the
world have announced adoption plans, including Tesco in the
UK,Coles Myer in Australia, and Mitsukoshi in Japan (Roussos and
Enabling, 2006). Therapid increase in RFID users suggests a major
research opportunity in the retailindustry (Sethuraman and
Parasuraman, 2005). This technology it is now at a stagewhere there
are potentially larger advantages from wider application, but
barriers stillremain, requiring a model to enhance business and
consumer advantages whileeffectively addressing security and
privacy issues (OECD, 2006).
RFID has been deployed to improve supply chain processes such
as:. handling materials with better efficiency;. managing assets
more effectively;. improving availability of products; and.
tracking items automatically (e.g. assets, containers, or reusable
bins; Tajima,
2007).
The value of RFID technology is particularly visible in Fashion
Supply Chains (FSCs),as the fashion business is characterized by a
wide assortment of products, shortlifecycles, high seasonality,
high volatility, high-impulse purchasing and
complicateddistribution and logistics operations (Christopher et
al., 2004; Castelli and Brun, 2010).Peterson et al. (2010) used the
term fast fashion to describe a new business modelwhere the
tendencies are fresh new products, shorter lifecycles and faster
production.To Barnes and Lea-Greenwood (2010) fast fashion is a
business strategy which aims toreduce the processes involved in the
buying cycle and lead-times so as to get new
Contribution ofRFID technology
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fashion product into stores, in order to satisfy consumer demand
at its peak. Thisbusiness model puts significant pressure on rapid
delivery, high quality products, andlow prices for each supply
chain segment. In the highly competitive retail environment,the
availability of a certain product category (or a specific item) is
a relevant source ofvalue to customers, since there are huge
penalties for being out of stock of the currentseason must-have
advertised items (Brun and Castelli, 2008). To respond to
customerneeds, time compression and flexibility should be developed
over the whole supplychain. Castelli and Brun (2010) also stress
the need to align operations of different FSCmembers along the
supply chain, enhancing information exchange through the use ofnew
communication tools and process coordination practices.
The RFID technology it is now at a stage, where there are
potentially largeradvantages from a wider application but barriers
still remain. In this line, Ngai et al.(2008) considered that the
barriers and critical success factors of RFID adoption areimportant
issues that should be addressed in future studies. Curtin et al.
(2007) alsopropose a RFID research agenda stressing the need of
more studies on the followingareas:
. developing, adopting and implementing RFID;
. using, supporting and evolving RFID; and
. RFID impact.
Additionally, Lee and Ozer (2007) observe that a large gap
exists between perceptionand reality of what is generally assumed
to be the benefits engendered by the RFIDdeployment in supply
chain. However, the majority of the adoption, use, and impact
ofRFID studies have been limited to a single focal firm adoption
setting and largely in theretailing sector (Wamba and Chatfield,
2009). According to Kappor et al. (2009) andNgai et al. (2008)
there is a lack of studies that considers the RFID
implementationdrawbacks in a supply chain management in-depth
context. Therefore, this paperexplores the deployment of RFID
technology in Fashion Supply Chain Management(FSCM) focusing on
logistics activities. It investigates the real
advantages,disadvantages and barriers perceived by companies
belonging to an FSC thatdeploys RFID technology. The main research
questions focused in this paper are:
RQ1. How FSC companies implement RFID technology? Which are
thearchitectural characteristics?
RQ2. What are the logistics activities in which FSC companies
deploy RFID?
RQ3. Which are the main advantages associated with RFID
technology?
RQ4. Which are the main barriers and disadvantages associated
with RFIDtechnology?
The paper is organized as follows. After the introduction, a
brief explanation of RFIDtechnology design is presented. Then the
context of RFID in the supply chain isexplored, examining the
enhanced application of focused technology in FSC
logisticsactivities. The research methodology and the data
analysis, looking at some companiesbelonging to the FSC that use
RFID, follow. After that, a conceptual model is proposedto
illustrate the deployment of this technology in the FSC. Finally,
some discussion ispresented and conclusions are drawn.
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2. RFID technology designRFID technology can be described as a
wireless identification method, which contributesto improved
communication capabilities of electronic information associated
withphysical items (Modrak et al., 2010). It is composed by several
elements: readers, tags,software, and security programs for the
readers (Hingley et al., 2007). Tags can beclassified as either
active or passive (Delichatsios et al., 2006; Jones et al., 2006).
Activetags use a small battery, a microchip, and a small antenna
built into them. The operatingfrequency of radio waves employed
also varies. Active tags have a greater read/writerange than
passive tags that are shorter range. Low-frequency RFID tags
operate at 125to 134 kHz, for US and international use.
High-frequency systems use 13.56 MHz.Frequencies of 866 to 960 MHz
are used in UHF (ultra-high-frequency) systems, whilemicrowave
systems operate at 2.4 to 5.8 GHz (Dipert, 2004).
Antennae are used in tags and readers, having a diverse range of
forms andtechnical factors. Their size can vary from under a square
centimetre to several squaremeters. Readers could come in four
types: handheld, vehicle-mounted andpost-mounted and hybrid
(Meyerson, 2007). The first three are dedicated to readingtags,
active or passive. The fourth type can switch between active and
passive modes.Handheld and hybrid readers are more expensive than
the vehicle-mounted andpost-mounted readers. The reader reads all
the tags within its read range in rapidsuccession. This automatic
process reduces read times. In a field test in the UK, Marks&
Spencer tagged 3.5 million bins with RFID tags. While it takes 17.4
minutes to read25 trays with bar codes on 36 dollies, RFID reduces
the reading time to just threeminutes, representing an 83 percent
reduction in reading time for each tagged dolly(Wilding and
Delgado, 2004).
3. RFID in supply chainIn recent years there have been high
investments in the development and improvementof RFID systems
because of the important advantages that companies and supplychains
can achieve by using RFID rather than bar codes. These advantages
derivemainly from innovation in the identification process and also
from the elimination needof manual work to scan items. Gaukler and
Seifert (2007) explain that economiesobtained from RFID are
fundamentally different from bar-coding economies: withbarcodes the
label cost is low, but the incremental cost of each scan is high,
since ittypically involves human labour and stoppages in the
material flow; with RFIDtechnology, the tag and system cost is
high, but positive returns are obtained from thecontinuous material
flow (Hingley et al., 2007). Also new technology developments
arecontributing to enlarge its fields of deployment and
consequently its widespreadadoption by companies and supply chains.
Examples of these are: integrating RFIDtechnology with EPC
(Electronic Product Code) concept through mobile platform(Kwok et
al., 2003); developing a knowledge-based Web Services
architectureincorporating RFID tags (Sundaram et al., 2010);
incorporating business processcontrol and automation into
RFID-enabled applications (Zhao et al., 2010); anddeployment of
e-kanban replenishment system based on passive high
frequencyradio-frequency identification (RFID) technology (Bendavid
et al., 2010). According toVisich et al. (2009) the major effects
from the RFID implementation are automationaleffects on operational
processes followed by informational effects on
managerialprocesses.
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RFID systems also produce a high, rigorous and simultaneous
capacity of reading(So and Liu, 2006) with potential to replace all
scanning activities in the supply chain(Boeck and Wamba, 2008;
Veronneau and Roy, 2009). This could become an importantsource of
competitive advantage and innovation in the logistics field. It
contributes toincreasing the efficiency in material movements. For
example, it increases efficiency inloading and unloading of cargo,
since warehouse operators do not have to manipulatean optical
reader to collect data about the products that are being loaded or
unloaded.Moreover, this technology allows information collection
from moving objects (Bange,2006), creating visibility in material
flows and a better coordination between supplychain entities. To
Gaukler and Seifert (2007) the main advantages resulting from
thedeployment of RFID in supply chains are savings in labour and
time. In addition, morebenefits are derived from increased
visibility (Lai et al., 2005). These advantages andothers are
presented in Figure 1.
As it can be seen, the application of RFID technology in a
supply chain can havemany advantages, namely, optimization
efficiency (Hingley et al., 2007; Chen et al.,2010) and speed of
processes and improvement of information accuracy (Sarac et
al.,2010). However, each member of the supply chain does not
benefit equally from RFID.The retailer has the highest cost
savings, and the lost sales cost factor has a highimpact on the
integrated RFID supply chain ( Jakkhupan et al., 2011). Also,
according toSari (2010) when the level of collaboration between
supply chain members is moreintensive, the uncertainty in customer
demand is lower and when the lead-times alongthe supply chain are
longer, the benefits gained from RFID deployment are greater.
On the other hand, RFID system implementation also has some
disadvantages(Figure 1). Kapoor et al. (2009) had identified
technical issues (e.g. privacy and securityviolations, computer
systems bottleneck, and read error) and economic issues (e.g.
costand obsolescence) that implementation of RFID in supply chain
management mustovercome. Some of the main disadvantages associated
with RFID derive from a set ofproblems that rises from its
different contexts of deployment. Considering thedeployment of RFID
in the supply chain context, one of the problems is related
withenormous data volume that could render RFID event-driven supply
chains (Ilic et al.,2010). According to these authors unbiased and
quantitative understanding of thecharacteristics and extent of
these data volume problems is necessary to identify andremove
adoption barriers. Another problem could rise from its application
in a globalsupply chain environment, where different partners sited
in different locations may notallow RFID system to be used, because
some supply chain members do not havecompatible network
infrastructure in place (Lorchirachoonkul and Mo, 2010).
Beyond these disadvantages, some obstacles or barriers have been
identified thatmake it difficult to deploy this innovative
technology. RFID technology involvessubstantial investment and the
return is only recuperated in a long time period (Kinsellaand
Elliott, 2005). If a short-term return-on-investment (ROI) is
calculated, it willrepresent a threat to its deployment since,
according to Trunick and Williams (2005), thistype of technology
has a high level of obsolescence and innovation. The main
obstaclesidentified by companies for not using this technology are
the high costs and also the lackof standardization and know-how
(Albright, 2005). Lai et al. (2005) also refer the need toadjust
current business models to new ones with high levels of trust and
alliances amongsupply chain members, so that they can share
information effectively. The frequentlycited barriers to the
widespread adoption of RFID technology are shown in Figure 2.
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Figure 1.RFID advantages and
disadvantages across thesupply chain
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Figure 2.Barriers to RFIDdeployment
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4. RFID in fashion supply chain logistics activitiesThe RFID
technology application is growing in various sectors and is being
used forvery different purposes. The RFID has been object of
academics attention fromwidespread fields of knowledge, namely
in:
. warehouses and distribution centres (Meyerson, 2007);
. points of sales (Roussos, 2006);
. security applications in the transport (Kevan, 2004);
. demotic (Kelly and Scott, 2005);
. retailing (Azevedo and Ferreira, 2009b);
. e-business (Want et al., 1999);
. supply chain execution applications (Meyerson, 2007); and
. healthcare (Wu et al., 2011).
Curtin et al. (2007) technology can also be found in a set of
different sectors such as:. automotive;. aviation;.
pharmaceutical;. agriculture and forestry;. logistics;. tourism and
leisure;. financial;. public sector; and. educational.
The fashion industry also could experience great benefits from
RFID deployment(Azevedo and Ferreira, 2009a; Bottani, 2009). The
fashion industry is characterized bylabour-intensive and
multi-faceted processes with relatively simple technology (Azumaet
al., 2009). Moreover, the fashion industry faces a high level of
competitiveness andmarket turbulence (Fernie et al., 2010). To
Barnes and Lea-Greenwood (2010), fastfashion is about the ability
to react to trends and improve response times, and this isclosely
linked to the concept of supply chain management and quick
response(Birtwistle et al., 2003; Krishnan et al., 2010). The goals
of supply chain management inthis kind of industry are delivering
the fashion trends at the right time in the rightplace, with
increased variety, affordability and customization, thus satisfying
bothexisting and potential customers needs (Azuma et al.,
2009).
To maintain competitiveness in the global market, fashion
manufacturers should,on the one hand, shorten the lead-time of new
product delivery, and, on the other,increase responsiveness to
market changes, using approaches and tools to automatethe logistics
processes and improve information availability (Bottani, 2009). In
thiscontext, coordination of activities between actors along the
supply chain is crucial.Many fashion manufacturers are pursuing
downstream integration through directlyoperated retail networks or
partnerships (Castelli and Brun, 2010). Also, fashionproducts are
changing and inducing FSC members to introduce some internal
changes.
Contribution ofRFID technology
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They must know how to deal with the following product
characteristics (Christopheret al., 2004):
. short lifecycles;
. high volatility;
. low predictability; and
. a high level of impulse purchasing.
The deployment of RFID in the FSC enables access to real time
item informationanywhere along the network, supporting the
objectives of supply chain management inthis challenging
context.
Hinkka et al. (2010) also discuss the characteristics of the FSC
that make it suitable forRFID utilization. First, the product
variety is high and the different products are difficult toseparate
by sight (different sizes of the clothes). Another issue in the
FSCM is the differentneeds of each supply chain member. Fashion
retailers face the challenge of adaptingquickly and frequently to
keep up with product changes and buying trends to meetcustomer
needs (Bottani, 2009). From manufacturers point-of-view, since the
productlifecycle of fashion items is very short, it is vital to
ensure that the product is delivered tothe stores as quickly as
possible (Bottani, 2009). In this regard, the ability of RFID to
trackand trace items can streamline many activities along the
supply chain. However, Hinkkaet al. (2010) state that RFID
solutions are mainly designed for retailers purposes, eventhough
the same tag can be used upstream in the supply chain. If the tag
is attached earlyin the manufacturing phase, other supply chain
members can use these tags, whichincrease supply chain visibility,
and potentially reduces handling errors and confusion.
However, the deployment of RFID technology in FCSM is not
limited to innovation initem tracking applications. So and Sun
(2010) state that the next step in RFID technologyinnovation in
FSCM is to merge RFID tags with other pervasive computing
technologiesto achieve ambient intelligence (AmI) in real life. An
example of this innovation isreferred to as the magic mirror, which
has the ability to read an RFID tag in clothing inthe fitting room
and display associated information such as availability and advice
onaccessories (Soars, 2009). AmI is developed to enrich people
lives and enhance thecustomer experience in shopping and commerce.
It involves integrating tinymicroelectronic processors and sensors
into everyday objects to make them smart.One of the latest smart
AmI applications in retail is the intelligent mix-and-match
ofclothing items, to help users choose colours and patterns that
most closely resemble thestyle that they would like to portray,
while, on the other hand, helping fashion retailers tomanage
product items in the stores and inventory in the back store more
efficiently.
The deployment of RFID in FSCM is expected to increase the
efficiency of existingprocesses. In transportation and warehousing,
RFID deployment enables substantialefficiency improvements by
reducing labour, and increasing accuracy andperformance. Gaukler
and Seifert (2007) discuss the usefulness of RFID in
logisticsactivities across the supply chain, by reducing
bottlenecks, enabling faster and lesscostly product movement, and
improving inventory accuracy.
At the upstream level, Gaukler and Seifert (2007) argue that
assembly andmanufacturing are activities that could benefit from
RFID, as tags can be used in amanufacturing setting to identify the
product that is being assembled, as well as theconstituent parts
that are to be assembled into the product, allowing savings in
labour
IJRDM40,2
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costs and rework costs (due to fewer assembler errors). The
advantages of RFID canalso found in the activities of receiving
shipments, and in the picking and packingprocesses (Bensel et al.,
2008).
In retailing, improvements in on-shelf availability of goods are
expected. This isachieved by redesigning the shelf replenishment
process, creating transparency on theactual inventory in store so
as to improve inventory control (Bensel et al., 2008). Moonand Ngai
(2008) argue that the use of RFID technology in retail can
streamlinestocktaking operations, strengthen customer
relationships, facilitate promotionalactivities and allow retailers
to allocate resources more effectively.
However, these advantages are dependent on the level in the
supply chain whereRFID tags are attached and the places where
tracking can start. Hinkka et al. (2010)propose a framework to
analyze the following tracking options in supply chains:
. in the retailers facilities;
. leaving the distribution centre (DC);
. arriving at the DC; and
. in the manufacturing phase.
These tracking options will determine the logistics activities
and entities involved inthe deployment of RFID. RFID deployment
impacts different activities in each stage ofthe supply chain:
. production;
. transportation and warehousing;
. point-of-sale; and
. in cross-company processes.
Figure 3 indicates the processes across the supply chain where
RFID deployment isinvolved.
5. Research methodologyThe main objective of this research is to
explore the deployment of RFID technology inFSCM, namely:
. How FSC companies implement RFID technology? Which are the
architecturalcharacteristics?
. What are the logistics activities in which FSC companies
deploy RFID?
. Which are the main advantages associated with RFID
technology?
. Which are the main barriers and disadvantages associated with
RFIDtechnology?
This study is focused on RFID deployment in companies belonging
to FSC, because theworld of fashion is facing new challenges
associated with different competitiveparadigms, the increase in the
number of pieces and the reduction in the lot size, whichare
obliging them to introduce innovative processes and technologies to
improveresponsiveness and agility (Azuma et al., 2009). In this
context, the RFID technologyhas being the answer found by many
companies to face this unfriendly environment.
Contribution ofRFID technology
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Figure 3.RFID deployment inlogistics activities acrossthe
fashion supply chain
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An inductive theory building approach, where theory emerges from
empiricalobservations, was used (Spens and Kovacs, 2006; Golicic et
al., 2005; Eisenhardt andGraebner, 2007). According to Golicic et
al. (2005) the qualitative path begins with thedata collection;
next the phenomenon is describe from the point of view of
informants;and finally ends with building a substantive theory from
the descriptive data,identifying the main variables and
relationships among them. This approach wasselected to identify the
main architectural characteristics, advantages, disadvantagesand
barriers of RFID technology in FSC.
In order to build a theory and exploring RFID deployment in FSC,
secondaryanalysis of published information from media news was
used. Content analysis wasused as a research technique for making
inference by systematic and objectivelyidentifying special
characteristics or messages in a text (Krippendorff, 2003;
Stockdaleand Standing, 2002; Harwood and Garry, 2003; Spens and
Kovacs, 2006). In a first stepit is defined the scope of the data
for analysis, typically text based-communications.The unit of
analysis (such as word, sentence or theme) is defined and the data
isclassified according to objective rules. The choice of documents
that provide the sourcedata for a content analysis depends on their
availability, accessibility and relevance(Krippendorff, 2003;
Stockdale and Standing, 2002; Harwood and Garry, 2003; Spensand
Kovacs, 2006).
The use of secondary data from media news had been used in
several studies inRFID context, e.g. Visich et al. (2009) and Smart
et al. (2010). However, as stated byDahlin et al. (2006) the large
amount of data requires systematic filtering andorganization of
data. The structured content analysis of media news was chosen as
amethod for this study; since it offers the possibility to
investigate implicit assumptions(latent content) alongside explicit
statements (manifest content) in a text (Krippendorff,2003).
The data for this research study was gathered from analysis of
secondary datausing published material from a broad range of
sources including newspapers,conference proceedings, industry
reports, white papers, press releases and books.Electronic searches
of journal databases including Emerald, EBSCO, Proquest, andScience
Direct were also undertaken. In addition, some specialized
magazines on RFIDwere used, including RFID Journal and Logistics
Today.
The selection criterion to a company be part of the study was:
to belong to FSC, inparticular to be a manufacturer/supplier,
distributor/logistics provider or a retailer; andto be recognized
as a successful case in the RFID technology implementation.
Inaddition the references should contain information related to the
RFID architecturalcharacteristics, logistics activities,
advantages, disadvantages and barriers. Therewere no restrictions
on the company size, country or brands. Therefore, study
resultswill be limited in the sense that specific organizational
contingency variables are notcontrolled. The final sample is
constituted by six companies. The sample comprisestwo companies
belonging to the second tier (manufacturers/suppliers), other
belongingto the first tier (distributor/logistics providers) and
three focal companies (fashionretailers). As representative
manufacturing companies, the Lawsgroup, and GerryWeber were
analyzed. Jobstl Warehousing and Fashion Company were chosen
toexemplify a logistics provider. The chosen fashion retailers are
the Charles VogeleGroup, Throttleman and Kaufhof. Table I presents
the profiles of these companies.
Contribution ofRFID technology
139
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Table I.Company profile
IJRDM40,2
140
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As the references given in Table I indicate, all six companies
have already beenpublished in detail. The study focuses on
companies that are based in differentcontinents and countries. This
makes it possible to a better understanding of RFIDdeployment in
the FSC around the world. Also, all the companies studied have
morethan 150 employees and have adopted an internationalization
strategy, with some ofthem having stores, plants and warehouses in
several countries.
As regards the sample analysis, only the information contained
in the selected newswas used, therefore the results are biased by
the available information. This meansthat this study does not cover
all the possibilities for RFID systems in FSC. It coversonly the
systems described in the sample. However, the aim of the research
was to becomprehensive, not exhaustive. The objective is not to
offer further insight into thesingle companies experience but to
bring them together to get a wider picture and learnfrom the
cross-case analyses (Seuring, 2009).
6. Model developmentThis section illustrates RFID deployment in
FSCM. To achieve this, secondary datafrom sample of six companies
belonging to different nodes in FSCs is analyzed. Thecompanies
experience with RFID system is explored to identify the main
architecturalcharacteristics of RFID system used, together with
advantages, disadvantages, andbarriers.
6.1 RFID design in the FSCAs pointed out in Section 2, there are
many different designs of RFID systems. A briefdescription of the
main features of the RFID systems deployed by the case studies
canbe found in Table II.
As can be seen in Table II, the architectural characteristics of
RFID deployed by thecase studies companies are quite different.
They use different frequencies; the locationof interrogators also
differs from workstation (Lawsgroup), containers (
JobstlWarehousing & Fashion), stores (Charles Vogele Group) and
distribution centres(Throttleman).
6.2 RFID deployment in FSC logistics activitiesIn the world of
fashion retailing, the initial process of a collection increasingly
plays astrategic role in shaping events that eventually determine
invoicing. When the numberof pieces increases, it is critical that
companies find new forms to become theirprocesses more agile and
avoid delays in the reception of pieces in warehouses andremove
bottlenecks in the launching phase of a collection. The deployment
of RFIDmakes possible a better synchronization among supply chain
members. In the researchcase studies several factors are
highlighted as main enablers for RFID deployment,including the
improvement of product quality and logistics efficiency, and
informationquality (Gerry Weber), as well as the replacement of
manual data-capture processes(Lawsgroup).
RFID technology has been deployed in different ways in various
contexts. Inrelation to the FSC that is the focus of this research,
it has been used in differentlogistics activities (Table III):
shipping, tracking of raw materials, semi-finishedcomponents and
finished apparel, collecting the finished goods, handling,
trackingcontainers, tracking products from plant to store, and
receiving, monitoring, and
Contribution ofRFID technology
141
-
Company RFID design
Manufacturers/suppliers
Lawsgroup High-frequency tagsInterrogators are located at each
workstation to read thesmart cards, and also scan a smart card
assigned to eachworker as an ID badgeIT department developed the
RFID system in-house andhas integrated it with its Enterprise
Resource Planning(ERP) system
Gerry Weber All sites involved, including the stores, are
equipped withmobile or stationary RFID readersReusable tags which
combine UHF EPC gen 2 transponderwith EAS (Electronic Article
Surveillance) functionality areused to track the merchandise into
the stores where the tagwill be removed at the check-outRFID is
used to track all tagged objects on their way to twodedicated
department stores via a distribution center
Distributor/logistics provider
JobstlWarehousing& Fashion
A hybrid solution that uses automated real-time locatingsystem
to monitor data in local areas such as warehousesand customer
sites, and semiautomatic wide area on theroad event notification to
ensure complete, closed-loopsupply chain visibilityThe solution
consists of active RFID tag transmittersattached to every container
in the fleet, magnetic exciterspositioned at client dock doors, and
a local infrastructure ofwireless sensors covering more than 20,000
square meters
Fashion retailers Charles VogeleGroup
Checkpoints RFID readers are installed on shelves at thestores
(to track which items are available in the store front),as well as
in fitting room (to monitor how many itemscustomers bring in with
them, and how many arepurchased)
Throttleman The garments with the RFID tags attached are packed
inboxes and shipped from the manufacturer in India to
theDistribution Center (DC) in PortugalWhen the boxed garments
arrive at the DC they are placedon a conveyor and sent through the
tunnel interrogator thatcaptures the tag ID numbers with an
accuracy of 99.9percent, and sends that data through a wired
LANconnection to the retailers software system. The softwarethen
matches those numbers with the advance shippingnotice, confirming
that the correct items have been receivedThrottleman uses the Smart
labels in 80 percent of itscollection
Kaufhof A high frequency system for RFID at the unit and
itemlevel was selectedA combination of the standardized European
ArticleNumber (EAN) and proprietary product codes is usedThe
frequency range of 13.56 MHz is used for logistic unitsand
itemsCredit card sized RFID transponders and readers were usedat a
reading range of approximately 1.5 meters
Table II.RFID design in theresearched companies
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142
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Man
ufa
ctu
rers
/su
pp
lier
s
Dis
trib
uto
rs/
log
isti
csp
rov
ider
Ret
aile
rs
Law
sgro
up
Ger
ryW
eber
Job
stl
War
ehou
sin
g&
Fas
hio
nC
har
les
Vog
ele
Gro
up
Kau
fhof
Th
rott
lem
an
Log
isti
csac
tiv
itie
sS
hip
pin
gop
erat
ion
sp
Tra
ckin
gof
raw
mat
eria
ls,
sem
i-fi
nis
hed
com
pon
ents
and
fin
ish
edg
arm
ents
pC
olle
ctin
gfi
nis
hed
goo
ds
pH
and
lin
gp
roce
sses
pT
rack
ing
con
tain
ers
pT
rack
ing
pro
du
cts
from
fact
ory
tost
ore
pR
ecei
vin
gop
erat
ion
sp
pM
onit
orin
g,
and
sort
ing
ofm
erch
and
ise
p
Tag
atta
chm
ent
Pro
du
ctio
np
pp
Tra
nsp
orta
tion
p
Tag
read
ing
Pro
du
ctio
np
Dis
trib
uti
once
nte
rp
pp
Sto
res
pp
p
Table III.RFID deployment infashion supply chain
logistics activities
Contribution ofRFID technology
143
-
sorting of merchandise. Although the tagging process can happen
in different phases(production and transportation), most of the
companies refer the tagging process atproduction. Also, the tags
are read mainly at the distribution centres and stores.
6.3 RFID advantages in FSCMWith reference to the advantages
associated with RFID technology, as can be seen inTable IV, the one
recognized by almost all the companies is internal inventory
control.That is they have fewer stock outs. This advantage is
highlighted by all themanufacturing companies and fashion
retailers. This same advantage can be found inFigure 1, but by a
different name Decreased stock levels, Decreased stock outsand
Improved inventory management. The logistics provider ( Jobstl
Warehousingand Fashion) does not refer this benefit, probably
because it is not one of its majorconcerns, but is a preoccupation
of their customers. Another advantage that deserves aspecial
attention is the cost saving. This was identified by companies in
the threefashion supply chain levels:
(1) manufacturers;
(2) logistics providers; and
(3) fashion retailers.
In spite of the high cost of investment required and some doubts
about the ROI, RFIDtechnology makes it possible to achieve
considerable cost savings. The JobstlWarehousing and Fashion
Company estimate that it makes a 20 percent cost saving asa result
of increased container utilization after the deployment of RFID
(WhereNetCorp., 2007).
Others advantages mentioned by the case study companies are
reduction inlead-time and increased visibility. The case of
Throttleman Company illustrates thelead-time reduction. The
Portuguese fashion retailer has reduced the time items spendin the
supply chain by seven to five days. A quick identification of
products as theyarrive from the manufacturer in India ensures that
the right items are rapidly shippedto stores in Portugal and Spain.
After the implementation of this solution, theperformance of the
reception lead-time was improved. Before this, the average value
forthis indicator was 4.97 days, while after RFID deployment it
reached an improvedvalue of less than 24 hours (Azevedo and
Ferreira, 2009a).
Also, increased visibility was attributed to the deployment of
RFID by logisticsproviders, especially the one associated to
inventory (Figure 1). The reduction inlead-times was identified in
the literature, but only indirectly, as represented by thevariable
Quicker collection of data. Although in this research only one
logisticsprovider is analyzed, that company was the one that
identified most advantagesassociated with RFID deployment.
6.4 RFID disadvantages and barriers to deployment in FSCMOver
and above the set of advantages associated with RFID technology, a
number ofdisadvantages and barriers have also been pointed out
(Table V). The maindisadvantage attributed to RFID technology is
its cost. This is composed by the costassociated with the
infrastructure and software system and, also, the unit cost of
tags.In the case of Throttleman, the investment in the entire RFID
project was relativelylow, not amounting to even six digits.
However, the major cost was that associated
IJRDM40,2
144
-
Man
ufa
ctu
rers
/su
pp
lier
sD
istr
ibu
tor/
log
isti
csp
rov
ider
Fas
hio
nre
tail
ers
Law
sgro
up
Ger
ryW
eber
Job
stl
War
ehou
sin
g&
Fas
hio
nC
har
les
Vog
ele
Gro
up
Kau
fhof
Th
rott
lem
an
Adva
nta
ges
Cos
tsa
vin
gs
pp
pE
rror
red
uct
ion
pIn
tern
alin
ven
tory
con
trol
(les
sst
ock
outs
)p
pp
pp
Red
uce
dsh
rin
kag
ep
Red
uce
dle
ad-t
ime
pp
pp
pIn
crea
sed
vis
ibil
ity
pp
pp
Res
pon
siv
enes
sp
pR
awm
ater
ial
con
trol
pP
rod
uct
ion
stat
us
pT
race
abil
ity
pD
eliv
ery
qu
alit
yp
Fle
xib
ilit
yp
Wor
kfl
owim
pro
vem
ent
pR
edu
ced
inv
ento
ryp
En
han
ced
cust
omer
serv
ice
pp
Sh
orte
ror
der
-to-
cash
cycl
eti
mes
pE
mp
loy
eesa
tisf
acti
onp
Inv
ento
ry-r
elat
edla
bou
rp
pIm
pro
ved
shel
fm
anag
emen
tp
pIn
crea
sin
gsa
les
pR
edu
ced
the
tim
esp
ent
inco
un
tin
gin
ven
tory
pp
Table IV.Advantages of RFID in
fashion supply chainmanagement
Contribution ofRFID technology
145
-
Man
ufa
ctu
rers
/su
pp
lier
sD
istr
ibu
tors
/log
isti
csp
rov
ider
Ret
aile
rs
Law
sgro
up
Ger
ryW
eber
Job
stl
War
ehou
sin
g&
Fas
hio
nC
har
les
Vog
ele
Gro
up
Kau
fhof
Th
rott
lem
an
Dis
adva
nta
ges
Insu
ffici
ent
read
rate
sp
Sy
stem
cost
pT
agco
stp
pp
Barr
iers
Glo
bal
stan
dar
diz
atio
np
Inte
gra
tion
wit
hcu
rren
tp
roce
ssp
pC
han
ge
man
agem
ent
pp
RO
Ies
tim
atio
np
Ali
gn
men
tof
its
bu
sin
ess
pro
cess
esp
Su
pp
lych
ain
cost
/ben
efit
shar
ing
p
Table V.Disadvantages andbarriers to RFIDtechnology deployment
infashion supply chainmanagement
IJRDM40,2
146
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with the tags, since it costs four times as much as traditional
bar codes (Azevedo andFerreira, 2009b). The fashion manufacturer
Gerry Weber also identified the systemcost as a disadvantage. The
cost of tags is recognized as an important disadvantage byGerry
Weber, Kaufhof, and the Throttleman company.
These disadvantages associated with RFID technology are the
reasons why morecompanies are not using it. However, there are also
some barriers that make its morewidespread use difficult. Among the
barriers identified in Table V, integration withcurrent processes
and change management are identified by more than one company.In
almost all cases, the introduction of this technology requires
process reengineeringin order to reach the maximum potential and
efficiency of the technology. This is notalways welcomed by
companies, and especially not by their employees.
6.5 Model proposalAfter the analysis of the six companies
experience with RFID technology, a model isproposed in an attempt
to illustrate some peculiarities of this technology deployment
inFSC (Figure 4).
As can be seen in the model, designed from the exploratory
analysis of the casestudies, the FSC logistics activities where
RFID is currently used are shippingoperations, tracking of raw
materials, semi-finished components and finishedgarments,
collection of finished goods, handling processes, tracking
containers,tracking products from factory to store, receiving
operations, monitoring, and sortingof merchandise. Also, the
process of tagging is in most cases developed at productionand tag
reading occurs at distribution centres or at stores.
Figure 4.Conceptual model forRFID deployment infashion supply
chain
management
Contribution ofRFID technology
147
-
The main barrier identified to the deployment of RFID is the
integration with currentprocesses. The costs associated with the
technology are the main disadvantagehighlighted by the analyzed
companies. Apart from this disadvantage, it is interestingto note
that the opportunity for cutting costs is also an important
advantage pointedout by companies. In addition, they also recognize
that improvements in internalinventory control, reduction in
lead-times and increase in visibility across the wholeFSC are also
important advantages.
7. Discussion and conclusionsRFID technology is an innovative
technology that has been widely adopted because ofthe huge
potential it offers companies, when considered both individually
and as partof an integrated supply chain. The drive toward RFID
deployment is being reinforcedby compulsion from large retailers
such as Wal-Mart and Target, and the Departmentof Defence of many
countries, who require all suppliers to implement this
innovativetechnology.
RFID technology has received considerable attention from
academics andpractitioners because of its potential for innovation
in diverse processes such asmanufacturing, transportation,
distribution, information systems, store operations,and sales. The
increased use of RFID has been praised by different kinds of
companies,but especially by fashion retailers, because of the
advantages arising from its use. Thefashion industry has unique
requirements since retailers are locked in a battle movingkey
fashions from the design table to the store shelves as quickly as
possible. In thiscontext RFID technology offers logistics
advantages to meet this challenge.
Both the theoretical analysis and the secondary data analysis
show that thedeployment of RFID in FSCM, despite the potential
advantages, must overcome thebarrier of integration with existing
systems. Moreover, the cost of RFID systems, inparticular the tag
cost, must be reduced to a more acceptable level, so item
leveltagging can become a reality. The advantages result mainly
from the innovation inprocesses, leading to efficiency and
effectiveness improvements in logistics activities.All activities
concerned with item movement and tracking (packing,
shipping,handling processes, receiving operations, and inventory
replenishment) are directlyaffected by the deployment of RFID
technology in the FCS.
There are several academic and managerial areas where this study
makes animportant contribution. It provides an empirical
investigation on the deployment ofRFID in FSCM, examining different
companies at different SC levels and in differentgeographical
locations. The main theoretical contribution of this model is to
exploreRFID technology deployment in the FSCM from the strategic
point of view since itenhances the contribution of RFID to Fashion
sector reach key competitive priorities,such as:
. faster logistics activities;
. greater quality of products;
. cheaper products; and
. higher responsiveness to new customers needs.
So, this model is different from the ones suggested by Wamba and
Chatfield (2009) andChuang and Shaw (2007). The first one develops
a contingency model for creating
IJRDM40,2
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value from RFID supply chain projects in logistics and
manufacturing environmentsfocusing on IT-enabled business
transformation, leadership and organizationallearning fields and
focusing on third-party logistics service firms seven-layer
supplychain RFID projects. Otherwise, Chuang and Shaw (2007)
suggest a functional RFIDintegration model, considering business
unit RFID integration and inter-companyRFID integration to improve
functional process efficiency and effectiveness exploringdifferent
types of supply chain like kitchen manufacturer (Kitchen World), IT
provider(HP) and retailer (Metro Group). Also, the model suggested
in this study is supportedon the most relevant RFID literature with
a special focus in the FSC but considering thereal life experience
of fast fashion supply chain users and technology providers.
Moreover, the advantages and disadvantages associated with RFID
deploymentacross the FSC, the main barriers to its introduction,
and the FSC logistics activities inwhich RFID is most commonly
deployed are identified and examined. This representsan important
contribution for companies in this industry, so that they can gain
aninsight into the deployment of RFID through the studied
companies. It also provides abasis on which new companies that are
thinking on introducing this technology canplan to overcome the
barriers of this technology, maximizing its advantages
andminimizing its disadvantages.
Despite the proposed model had been develop in the FSC context,
the results are alsoconcordant to the ones found by other
researchers in dissimilar contexts, for examplein healthcare
sector. In FSC the main logistics activities in which the RFID is
deployedare related to items tracking. Studies on healthcare sector
(e.g. Wu et al., 2011) alsopoint out the advantages of item
tracking, but in this case instead of fabrics andgarment, the items
are patients, bold-bags, equipment and staff and medicationtherapy.
In the healthcare sector the RFID main disadvantages are also
related with thesystem cost and the difficulties in the
interoperability with other IT systems representa barrier (Vanany
and Shaharoun, 2008). Therefore, the proposed model could beapplied
to other sectors since all of them are doing an effort to adapt to
the newscompetitive priorities: low cost, quality, delivery speed
and flexibility (Chi et al., 2009).The main RFID advantages
identified in the proposed model, internal inventorycontrol and
cost savings are important enablers to help different kind of
companiesand respective supply chains reach these competitive
priorities: the inventory controlhelps companies and supply chain
to avoid inventory stock outs and minimizing costsassociated with
capital invested in it. Also inventory control could contribute to
avoidnon-quality products through more selective suppliers sourcing
(Sana, 2011). Also, thelogistics activities identified as using
RFID technology gives companies and supplychain insights on the
kind of operational processes that could be improved thanks to
it.
After the development of this study, it is suggested that future
research shouldempirically test the validity of the proposed
conceptual model derived from the casestudies. In addition, future
studies should collect large samples of empirical data on theFSC to
provide a more extensive analysis of the RFID deployment in this
kind ofsupply chain.
The study of RFID technology presents a promising potential for
research toaddress a host of issues that need more research in
order to foster its diffusion andfacilitate its large-scale
adoption and implementation within fast moving fashionsupply
chains. There are various theoretical and managerial issues to be
studied,which derived from this study, such as:
Contribution ofRFID technology
149
-
. As one main barrier identified by the researched organizations
is the integrationwith current process. This issue was also
proposed by Curtin et al. (2007) as akey issue in the RFID research
agenda. Therefore, it will be interesting to suggesta new model
joining the approach followed in this study with the one
suggestedby Chuang and Shaw (2007) in order to enlarge the scope of
this study andconsider also the business unit RFID integration and
inter-company RFIDintegration factors in RFID deployment among the
FSC organizations.
. Another barrier identified is the change management. It
represents a hot-topicfor future researches to analyze the patters
and dynamic of RFID adoption withinthe companies (Curtin et al.,
2007).
. Since, one of the main disadvantage pointed out by case
studies is the costassociated with RFID technology implementation,
considering that the costcomponent is related also with the
infrastructure and the software system, it willbe useful to study
the influence on costs from using Cloud Computingarchitecture to
collection and use data from many different supply chain
partnerssited all over the world. In particular, to investigate if
a cloud computingarchitecture solution will decrease the real cost
of RFID technology andovercome the main barrier to its widespread
deployment.
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About the authorsSusana Garrido Azevedo (PhD in Management) is
Assistant Professor of Logistics andManagement at University of
Beira Interior (UBI) Portugal. Her research interests
includelogistics, ICT in logistics (RFID) and supply chain
management. She has published in severalinternational journals and
has published books in the areas of operations management,
logisticsand competitiveness. She has also served as reviewer for
many journals and internationalconferences. She has published in a
number of international journals and is Associate Editor ofThe
International Journal of Management Science and Information
Technology (IJMSIT). SusanaGarrido Azevedo is the corresponding
author and can be contacted at: [email protected]
Helena Carvalho (MSc in Industrial Engineering) is a Teaching
Assistant of IndustrialEngineering at Faculdade de Ciencias e
Tecnologia, Universidade Nova de Lisboa, Portugal. Sheis currently
developing her PhD thesis in the domain of lean-and-resilient
manufacturingsystems and has a special interest in the area of
supply chain management, lean, agile, green andresilient management
paradigms, and system modelling. She has made a number
ofpresentations in international conferences and published in
proceedings related to these topics.She has also published in
several international journals and is an International Review
BoardMember of the International Journal of Green Computing
(IJGC).
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