9. Discussion and conclusion
RFID is part of a new generation of IT known as “contact-less
communication” and the foundation of the “silent business”
and “internet of things”. RFID may reduce costs and improve
efficiency, but it may also cause security and privacy
problems. Despite RFID adoption challenges and
corresponding low adoption rates, Sheffi (2004) argued that
RFID will follow the adoption path of other disruptive
technologies, such as television, automobile, and refrigeration
toward wide adoption. The most cutting edge technology for
SC integrity and traceability is the RFID system (Kumar and
Budin, 2006). Recent advances in RFID have enabled its
early adoption in many commercial applications, such as
SCM, logistics, and transportation. RFID technology is a
supporting tool for automating processes and improving
operations management. The fact is that it can bring more
power to the decision-making team by providing on time
information. This sophisticated technology is more useful to
the management for one or more of the following facts:
. better SC and inventory management;
. reducing counterfeiting and fraud controlling;
. tracking work-in progress;
. reducing administrative errors;
. reducing rework;
. better management of warrantee claims;
. capable of working in suitable and harsh environments;
. better SC efficiency;
. cost saving; and
. profit enhancement.
Manufacturers can use RFID solutions to reduce operating
costs through decreasing the labor costs, claims, and returns.
This will help them to increase the operating income. They
also can reduce the working capital by enabling reductions in
inventory and lowering the inventory write-off from the return
goods and those items that are un-saleable at the end. Main
benefits of RFID can be categorized as follows:
. improving the speed and accuracy for tracking pallets,
cartons, and containers;
. helping to reduce stock levels;
. helping to reduce operating costs;
. improving the management of inventory;
. improving efficiencies in work-in process reporting; and
. improving inventory visibility to feed JIT systems