TECHNOLOGY SUPPLY AND SERVICE CHAINS: THE RFID ADOPTION DECISION

Prashant Chaudhary, Gilbert Huang, Jean Sun, Kenya Takekura and Derek Zu

Chapter 13 in The UCLA Anderson Business and Information Technologies (BIT) Project:A Global Study of Business Practice, 2009, pp 351-413 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractThis chapter analyzes the factors that will have significant impact on the adoption mechanism of Radio Frequency Identification (RFID) by various industries. This adoption process also will depend partially on the technological advances and innovation in the industry. This chapter, however, focuses on the economic, business, and political factors involved in the adoption process. While this chapter is dedicated to the RFID adoption process, the models and conclusions may also be applicable to other upcoming technologies.As the name suggests, RFID involves the use of radio frequency signals to provide an automatic identification of items. Being a flexible technology that is convenient and easy to use, it combines advantages not offered by the existing identification technologies. The opportunities for improving various business processes through RFID are enormous. However, its adoption is governed by many factors in addition to the traditional cost-benefit analyses. The competitive landscape, synergies with suppliers and partners, and government regulations are at the top of a long check list of factors that businesses will consider during the decision process. The significant initial capital expenditure required calls for compelling cases to be made both internally and externally.This chapter analyzes the mechanism and drivers involved in the adoption of RFID technology. The chapter begins with an overview of the current state of RFID adoption across several industries and discusses the business and technological advantages of RFID. Next, it characterizes the adoption process with three conceptual models. The first model is the Technology Adoption Matrix Model, which analyzes adoption mechanisms at the industry level based on pre-identified linkage between the industry structure and implementation drivers. Following this, the Layered Model delves deeper into value propositions by examining various implementation scenarios both horizontally and vertically in the supply chain. This model offers key insights into the business ecosystem of the implementation target. Finally, the Decision Process Model lays out a detailed road map of the typical decision-making process regarding the RFID adoption.In addition, this chapter merges all the three models into one composite model and thus presents a framework for understanding the entire adoption process. This framework can be used by economists, managers, and end consumers to understand adoption scenarios and the associated decision process. To demonstrate the framework's application methodology, an adoption analysis for the retail and airline industries is presented. Finally, this chapter concludes with the authors' assessment of the future of RFID adoption.It was concluded that RFID will be adopted widely by many industries. It is predicted that impediments to adoption such as technical and standardization issues will be solved in future. However, the environmental and privacy issues could hamper the technology's growth to a certain extent. Ultimately, success stories in the industry will be dependent on the management's capability to effectively utilize the data and information generated from the RFID implementation.

Keywords: GNP Studies; IT Impact; IT Survey; Technology Driven; Business Practice; Business Continuity (search for similar items in EconPapers)
Date: 2009
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