Impact of RFID technology utilization on operational performance

Abstract

PurposeThe purpose of this research is to focus on the most basic of relationships – the impact of radio frequency identification (RFID) technology utilization on operational performance. An RFID‐performance model is theorized and tested with data collected from a sample of manufacturing organizations using a structural equation methodology. The structural model incorporating RFID technology utilization as antecedent to operational performance is assessed.Design/methodology/approachSurvey data from a sample of 122 manufacturing sector organizations were collected and the model was assessed following a structural equation methodology.FindingsThe measurement scales assess as unidimensional, reliable, and valid. The theorized structural model fits the data relatively well. RFID technology utilization directly and positively impacts operational performance.Research limitations/implicationsInterpretation of the results should be tempered in light of this early stage of adoption of RFID technology in the manufacturing sector. Also, this study is limited only to the operational level benefits of RFID technology utilization. It does not assess the impact of the technology on business and supply chain level performance.Practical implicationsManufacturing managers can expect improved operational performance to result from the implementation of RFID technology. RFID utilization should not be seen by the practitioner simply as a cost of doing business but rather as a way to improve efficiency and effectiveness which ultimately will lead to increased profits.Originality/valueThe study offers empirical support for the adoption of RFID technology for the purpose of improving operational performance within the manufacturing sector.