Rfid Essay

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A STRATEGIC CASE FOR RFID: AN EXAMINATION OF WAL-MART AND ITS SUPPLY CHAIN Susan A. Vowels Washington College svowels2@washcoll.edu Abstract Although Radio Frequency Identification (RFID) implementation faces a host of challenges, WalMart perseveres in its drive for RFID adoption throughout its supply chain. By being such early adopters of RFID, Wal-Mart’s suppliers suffer increased costs which put pressure to bear on their profitability. In the face of the additional costs of RFID, why has Wal-Mart chosen to mandate the use of RFID tagging in its supply chain and insisted on such a short implementation period? This paper reviews Wal-Mart’s relationship with its supply chain, describes Wal-Mart’s RFID initiative, and proposes a possible unexpressed motivation underlying Wal-Mart’s drive to go to RFID. Early results are indicating incremental improvements at Wal-Mart due to RFID implementation; however, the argument can be made that Wal-Mart’s ultimate goal is an innovative improvement on a Schumpeterian scale – the desire to radically improve an important supply chain metric, the cash-to-cash cycle. This reasoning supports fertile areas for future research in the relationship between RFID and the Cash-to-Cash Cycle. Introduction: Supply Chain Metrics Supply chains consist of companies bound by trade with each other, and stretch from the initial raw materials to the finished product placed in the consumer’s hand. Supply chain companies recognize the critical role partnership plays and the impact that a firm’s suppliers and customers can have on its operational and financial performance. AMR Research listed the top 25 supply chain firms in a report called “The AMR Research Supply Chain Top 25 and the New Trillion-Dollar Opportunity” (Friscia, et al, 2004). The basis of the report is that supply chain superiority is crucial to the success of

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