Supply chain innovation for short life products: RFID deployment and implementation

Whereas efficient supply chain management is of paramount importance in the field of short life shelf products, the latter present some of the biggest challenges in supply chain management. In particular the wide product range, the strict traceability requirements, the high waste costs due to spoilages and their disposal, the need for temperature control in the supply chain and the large volume of products handled are only a few of the factors that greatly increase the complexity of supply chain control. More precisely, short life products possess several distinctive issues. First, the range of products in the short-life category has increased over a relatively short period of time due to an increase of ready meals and pre-packaged meat products. Second, only limited amount of safety stock can be held due to the limited shelf life of products and the availability of product cannot always be ensured. Finally, waste due to spoilage is a major problem and it caused mainly by excess stock and flawed stock rotation. The advent of e-business has created several challenges and opportunities in the supply chain environment and the current trend is to try to leverage the benefits obtained through information sharing across the supply chain to improve operational performance, customer service, and solution development (Twist, 2005; Jones et. al., 2005; Murray et. al., 2007). There is a wide consensus in the literature that Radio Frequency Identification (RFID) is a technology that can enable grocery retailers to better address supply chain complexity by capitalizing on the fact that products are uniquely identified with the use of RFID tagging technology. Notwithstanding its early stage adoption status, RFID appears to be an important generator of new or enriched business information that might lead to various benefits for the supply chain of short shelf life products. Many RFID-based benefits have been found to be associated with the distribution and transportation sectors of the supply chain. However, an emerging number are also apparent in the retail and post retail domains (Sellitto et. al., 2007). The improved information value associated with RFID is embodied in quality attributes that include timeliness, currency, accuracy and completeness. These benefits have been invariably associated with the powerful and dynamic data acquiring capabilities of the technology (Singh et. al., 2007), where object-to-system data capture is automatically achieved. In particular, an effective information collection system might help to solve some of the challenges where efficient capturing of real-time data helps to track channel inventory and sell-through (Karkkainen, 2003). As large volumes of short life products are handled, scheduling, capacity and inventory have become more difficult to forecast. All savings in time and handling become an important competitive advantage. RFID enables firms to rely on more accurate forecasts and supports the optimisation of stock replenishment quantities. Increased visibility also helps in timing replenishments, effective stock rotation ensures that short life products are placed on the shelf in the correct order, as determined by their expiry date. Correct rotation and the minimisation of supply chain inventory are crucial for reducing spoilage. Furthermore RFID tagging enables retail grocery firms to better control demand of short life products by aiding dynamic pricing strategies. The overall RFID value proposition has made it a must for grocery retailers to remain competitive by boosting the supply chain overall efficiency and by anticipating great cost savings mainly in labour, shrinkage (due both to theft and spoilage), stock optimisation and transportation (Karkkainen, 2003; Twist, 2005). Although these advantages have been extensively documented, surprisingly this analysis has been seldom accompanied by more substantial evidence on how RFID deployment and implementation occurs/should occu...