Abstract
Several studies have examined the value of radio frequency identification (RFID) technology, but few have evaluated its effect on operating performance. The actual benefits of RFID adoption remain controversial among academics and practitioners. The present study provides empirical evidence of the impact of RFID adoption on operating performance. Preliminary findings on 180 manufacturing firms that adopted RFID in the United States reveal positive effects on the firms¡¦ long-term operating performance. Over five years of adopting RFID, inventory days, labor productivity, and sales growth significantly improved by 9.38 days, US$ 3,280 per employee, and 3.42%, respectively. Overall, this study provides one of the first objective evidences of the direction and magnitude of the effects of RFID adoption on firm operating performance. The operating performance improvement, particularly, the sales growth improvement, presents an encouraging message to manufacturing firms that are facing increasing pressures from retailers on RFID mandate.
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