Improving inventory accuracy using RFID technology: a case study

Abstract

PurposeThis paper aims to explore and describe the impact of radio frequency identification (RFID) technology on inventory accuracy within a production and assembly plant, and to propose a model for assessing the impact of the technology on inventory accuracy.Design/methodology/approachThe empirical investigation, based on case study research, focuses on an RFID implementation at a supplier of injection‐moulded, surface‐treated plastic to the automotive industry. This implementation is one of the few item‐level, open‐loop RFID implementations in the automotive industry.FindingsThe empirical paper provides insights into, how inventory accuracy has been improved and made attainable in practice by implementing RFID, and indicates that the technology ensures inventory inaccuracy will be kept at a minimum. As a result, an analytical model is presented which identifies the impact of RFID technology on inventory accuracy.Research limitations/implicationsThe case study and context need to be considered when generalising upon the findings. Furthermore, it is hoped future research could further develop the model presented and test it against implementation practice.Practical implicationsRFID technology provides practitioners with the opportunity to eliminate waste, and improve production and assembly performance. The research provides practitioners with experience of, and insights into how a production and assembly plant has improved inventory accuracy by implementing RFID technology. In particular, practitioners are provided with a model which enables them to assess the impact of RFID on inventory accuracy.Originality/valueThis paper contributes to the RFID community by providing empirical insights into the impact of RFID technology on inventory accuracy, but also more broadly into logistics and operations management research.