Evaluating RFID opportunity through process analysis

Abstract

Current literature agrees that one of the main results obtained by adopting RFID lies in an improved efficiency increase in material handling operations, especially regarding reductions in the time required to perform certain procedural steps. However, by evaluating only the advantages that can be easily quantified and definitely achieved may lead to limited results. This paper presents a business case of a large European Consumer Packaged Goods (FMCG) company in the cosmetics and beauty sector. Eleven processes in receiving, handling, storage and delivery procedures in one of the main distribution centres of the company were analysed and modelled using a detailed Business Process Modelling (BPM) approach. Since savings were evaluated only in terms of the reduction of resources used - achieved through process acceleration - despite the company dealing in huge volumes of high-margin products, the feasibility study turned out to be negative. Thus, the paper concludes with a brief discussion of how companies should take on this challenge if process timing benefits are insufficient. The detailed process analysis reported in this paper may be useful for operation practitioners or any manufacturing company or distribution centre about to start an as-is versus to-be comparison of their material handling procedures for RFID implementation.