Advertisement

A Tool Set for Exploring the Value of RFID in a Supply Chain

  • Ying Tat Leung
  • Feng Cheng
  • Young M. Lee
  • James J. Hennessy
Chapter
Part of the Springer Series in Advanced Manufacturing book series (SSAM)

Abstract

In recent years, radio-frequency identification (RFID) has emerged as an important technology to facilitate the management of a supply chain. Because the technology is expensive and time-consuming to implement on a large scale, most enterprises require a relatively rigorous business case to support the decision whether or when to adopt the technology. To enable the development of such business cases, a tool set has been developed to quantify the business value of RFID for different participants in a manufacturing-retail supply chain. The tool set consists of two tools which are linked: A business value model, implemented as an in-house developed application using commercial spreadsheet software, and a business process model, implemented using a commercial discrete-event simulation package. The business process model computes and provides certain supply chain performance metrics to the business value model, which are otherwise difficult to obtain. Because it is not trivial to capture the full range of potential benefits of RFID, it is necessary to coordinate two different types of decision support tools (spreadsheets and computer simulation).

Keywords

Supply Chain Cash Flow Business Case Indirect Benefit Business Process Model 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

3.7 References

  1. Agarwal V, (2001) Assessing the Benefits of Auto-ID Technology in the Consumer Goods Industry, White paper. Auto-ID Center, Massachusetts Institute of Technology.Google Scholar
  2. Alexander K, Gilliam T, Gramling K, Kindy M, Moogimane D, Schultz M, Woods M, (2003) Focus on the Supply Chain: Applying Auto-ID Within the Distribution Center, White paper, Auto-ID Center, Massachusetts Institute of Technology.Google Scholar
  3. A.T. Kearney and Kurt Salmon Associates, (2004) Connect the Dots: Harnessing Collaborative Technologies to Deliver Better Value to Consumers, White paper sponsored by the Food Marketing Institute, Grocery Manufacturing Association of America, and National Association of Chain Drug Stores, February 2004.Google Scholar
  4. Bagchi S, Baseman RJ, Cheng F, Gung RR, Leung YT, Lin GY, Lu Q, Wu J-Z, (2005) A Business Value Modeling Tool Set for Service-After-Sales Outsourcing, IBM Research Report RJ10348, San Jose, California.Google Scholar
  5. Fleisch E, Tellkamp C, (2005) Inventory inaccuracy and supply chain performance: a simulation study of a retail supply chain, International Journal of Production Economics. 95(3):373.CrossRefGoogle Scholar
  6. Forrester JW, (1958) Industrial dynamics — A major breakthrough for decision-makers, Harvard Business Review 36(4):37–66, July–August 1958.Google Scholar
  7. Gaukler G, Seifert RW, Hausman WH, (2004) Item-level RFID in the retail supply chain, to appear in Production and Operations Management.Google Scholar
  8. Global Commerce Initiative and IBM, (2005) EPC: A Shared Vision for Transforming Business Processes, White paper.Google Scholar
  9. Grey W, Katircioglu K, Shi D, Bagchi S, Gallego G, Adelhelm M, Seybold D, Stefanis S, (2003a) Beyond ROI, Supply Chain Management Review, March/April 2003:20–27.Google Scholar
  10. Grey W, Katircioglu K, Bagchi S, Shi D, Gallego G, Seybold D, Stefanis S, (2003b) An analytic approach for quantifying the value of e-business initiatives, IBM Systems Journal 42(3):484–497.CrossRefGoogle Scholar
  11. Hardgrave B, Waller M, Miller R, (2005) Does RFID Reduce Out of Stocks? A Preliminary Analysis, Research Report, University of Arkansas, November 2005.Google Scholar
  12. Helfert EA, (2001) Financial Analysis Tools and Techniques: A Guide for Managers, McGraw-Hill, New York.Google Scholar
  13. Joshi Y, (2000) Information Visibility and Its Effect on Supply Chain Dynamics, Master degree thesis, Massachusetts Institute of Technology.Google Scholar
  14. Kambil A, Brooks JD, (2002) Auto-ID Across the Value Chain: From Dramatic Potential to Greater Efficiency & Profit, White paper, Auto-ID Center, Massachusetts Institute of Technology.Google Scholar
  15. Kang Y, Koh R, (2002) Applications Research, Research Report, Auto-ID Center, Massachusetts Institute of Technology.Google Scholar
  16. Lee HL, Padmanabhan V, Whang S, (1997) The bullwhip effect in supply chains, Sloan Management Review 38(3):93–102.Google Scholar
  17. Lee YM, Cheng F, Leung YT, (2005) A Quantitative View on How RFID Will Improve a Supply Chain, IBM Research Report RC23789, Yorktown Heights, New York.Google Scholar
  18. Luenberger DG, (1998) Investment Science, Oxford University Press, New York.Google Scholar
  19. Nembhard HB, Shi L, Aktan M, (2005) A real-options-based analysis for supply chain decisions, IIE Transactions 37:945–956.CrossRefGoogle Scholar
  20. Raman A, Deoratius N, Ton Z, (2001) The Achilles’ heel of supply chain management, Harvard Business Review, May 2001:2–3.Google Scholar
  21. Shishko R, Ebbeler DH, Fox G, (2004) NASA technology assessment using real options valuation, Systems Engineering 7(1):1–12.CrossRefGoogle Scholar
  22. Wal-Mart Stores, Inc., (2005) Wal-Mart Improves On-Shelf Availability Through the Use of Electronic Product Codes, press release, October 14, 2005.Google Scholar

Copyright information

© Springer-Verlag London Limited 2007

Authors and Affiliations

  • Ying Tat Leung
    • 1
  • Feng Cheng
    • 2
  • Young M. Lee
    • 2
  • James J. Hennessy
    • 3
  1. 1.IBM Almaden Research CenterSan JoseUSA
  2. 2.IBM Thomas J. Watson Research CenterYorktown HeightsUSA
  3. 3.IBM Global Business ServicesNew YorkUSA

Personalised recommendations