Application and diffusion of RFID technology in New Zealand businesses from a supply chain management perspective

Abstract

Radio Frequency Identification (RFID) is a data capture technology. It is said that RFID is the first important technology introduction of the twenty-first century, because it enables machines to perceive and this help us enter "The Sensor Age" (Garfinkel & Rosenberg, 2005). RFID is changing the way we collect data and it will change the way we do business as well. It has been suggested that it is the next revolution in supply chain management.

Many major organizational changes over the last few decades have been technology-driven. Therefore, it is important to understand how businesses think about RFID and to find out the drivers and barriers behind the adoption. It is also important to find out what can be done to help the diffusion of RFID.

This study investigates the factors that have impacts on the adoption and application of RFID technology in New Zealand businesses from a supply chain management perspective by drawing upon research in diffusion of innovation (DOI) theory. This study also examines the applications of RFID in the apparel and footwear industry, in which the researcher has particular interests.

The model used in this research is based on the previous researches about diffusion of innovation theory. The factors that are being investigated include communication channels, technological factors, environmental factors and national level factors. The data for this study was obtained from four case study companies. They are The Warehouse, Daniel Silva Ltd, Saito Group and Sandtracker Ltd. The companies and participants involved in this research are those who have adopted or have expressed interests in RFID technology.

The results from this research reveal that the interpersonal communication channel plays a very important role in changing people's attitude to RFID technology and thus in influencing the decision making process.

The relative advantage from RFID, one of the technological factors, is the main driver of the adoption of RFID. The high costs of RFID tags and other costs of implementation is the main barrier for adoption at this stage. However, this research also shows the drop of tags' price is coming. The companies involved in this research estimate that big benefits and wide adoption of RFID will come in the next 5 years.

This research also shows most current adopters of RFID technology in New Zealand are companies who are marketing leaders in their industry in New Zealand; therefore, environmental factors such as competitive pressure or customers requirements do not have important roles at this stage.

Through this research, the researcher finds some national level factors that can be helpful for the diffusion of RFID are missing at this stage. Business needs more knowledge and better understanding about RFID. There is a shortage of qualified professionals in this area. Universities and other institutions can provide help in this field. Government policy such as cost-sharing program or allying with the U.S.A. standard will also be helpful. A N.Z. official website about RFID could also be considered.