by Adi Tedjasaputra

Radio Frequency Identification (RFID) has been around for several decades. The technology itself is neither new nor revolutionary. What is fascinating from the RFID technology is actually the innovation around it. A vast array of new emerging opportunities and controversies resulting from the use, or potential use, of RFID technology has shown that there is no limit in RFID technology innovation.

The idea of using RFID technology in Supply Chain Management is made popular by the possibility of gaining global and real-time asset visibility and control. RFID technology is the key enabler for advanced and detailed asset tracking, tracing, monitoring, automatic event logging and triggering throughout global supply chain.

Different organisations have applied different kind of RFID applications for improving the performance of particular supply chain activities and processes. Nevertheless, none of the current RFID applications in supply chain is optimised for global asset visibility and control. The current RFID application focus is only limited to organisational and local real-time asset visibility and control.

The focus on organisational performance consequently requires the use of organisational performance metrics, such as Key Performance Indicators (KPIs). Naturally, scorecards can be used to measure the impact of RFID applications on organisational performance based on the scoring for KPIs.

The most common mistake in implementing KPI scorecards to measure the impact of RFID applications on organisational performance, however, lies in the narrow or limited perspective in defining KPIs. The sole focus on technology and finance, for example, is not only misleading, but also ignoring the contribution of other supply chain stakeholders in influencing the organisational performance. It is worth to be noted that the role and influence of other supply chain stakeholders in organisational performance will increase along with the network effect of RFID technology adoption in global supply chain.

Nonetheless, before a critical mass point of RFID technology adoption in global supply chain can be reached, there are still a couple of issues to be solved, i.e. cost and data. It is a well-known fact that the cost of infrastructure investment for global real-time asset visibility and control is huge. This huge investment requires some robust cost-sharing models and mechanisms that can benefit supply chain stakeholders and justify their investment. In addition, the transition from industrial economy to knowledge-based economy has made data increasingly a valuable asset. For this reason, an agreement on data sharing and storage policies is essential to ensure that the use of data is optimised for the benefit of each global supply chain stakeholder.


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Labels: rfid, scm, technology, tracking

 

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