Supply chain management with lean production and RFID application: A case study

Abstract

► This research applies lean production and RFID technology to a supply chain. ► Value stream mapping is used to draw current and future state mapping. ► Total operation time can be saved by 81% using lean production and RFID. ► The return-on-investment is 2.6 indicating a worthwhile investment of lean and RFID. This study applies lean production and radio frequency identification (RFID) technologies to improve the efficiency and effectiveness of supply chain management. In this study, a three-tier spare parts supply chain with inefficient transportation, storage and retrieval operations is investigated. Value Stream Mapping (VSM) is used to draw current state mapping and future state mapping (with lean production and RFID) with material, information, and time flows. Preliminary experiments showed that the total operation time can be saved by 81% from current stage to future stage with the integration of RFID and lean. Moreover, the saving in total operation time can be enhanced to 89% with cross docking. In addition, utilizing RFID technology, the cost of labors can be significantly reduced while maintaining current service capacity at the members in the studied supply chain. Return-on-investment (ROI) analysis shows that the proposed method is both effective and feasible.