Relation model describing the effects of introducing RFID in the supply chain: evidence from the food and beverage industry in South Korea

Oh-Keun Ha,Kyung-Yong Chung,Dongjoo Park,Kang-Dae Lee,Yong-Seok Song

doi:10.1007/s00779-013-0675-x

Abstract

The development of information technology has rapidly changed the logistics industry. RFID has become more and more important in the context of supply chain management (SCM), and implementation of RFID in SCM brings with it the potential to manage the information flow and to support communication and collaboration along the supply chain. This study was conducted to build a relation model, which is a structural model, to identify the effects of introducing RFID into the supply chain of the food and beverage industry in Korea. The supply chain of the food and beverage industry was divided into five activities: procurement, production, transport, sale, warehousing, and administration. This study was based on the premise that RFID will be embedded in a transport box or pallet circulated in the SC. The model showed that SC activities have positive relationships through the RFID system, and the introduction of RFID promotes information interchanges between SC activities, which in turn enable the coordination and consolidation of a total SCM. From the results of this study, it is expected that the RFID system does not only enable the SC partners to improve their utilities but also promotes the efficiency of SCM as a whole. This is meaningful considering that there is still a controversy regarding the effects of RFID on SCM.

Highlights

The development of information technology (IT) has rapidly changed the logistics industry
Confirmatory factor analysis was conducted to confirm the unidimensionality of the observable variables as it can do so more accurately than Exploratory factor analysis (EFA) can [15]
The confirmatory factor analysis (CFA) technique is based on the comparison of the variance–covariance matrix obtained from the sample to form the model [13]

Summary

Introduction

The development of information technology (IT) has rapidly changed the logistics industry. RFID is becoming more and more important in the context of supply chain management (SCM) [30]. The implementation of RFID in SCM brings with it the potential to manage the information flow and to support communication and collaboration along the supply chain (SC) [4, 22, 34]. A few empirical studies, have suggested that it is very difficult to ascertain the performance of RFID applications [18, 50, 52]. This phenomenon has been referred to as the “productivity paradox of IT” [31].

Methods

Results

Conclusion