Effects of the RFID Mandate on Supply Chain Management

Recently, radio frequency identification (RFID) is being explored as a technology to be used in supply chain management. The use of RFID in the supply chain is an emerging technology that has attracted a lot of attention in the U.S., Europe, and Asia. Major retailers in various continents have given mandates to their suppliers to adopt the technology in order to continue business with them. As a result, there appears to be a shift in power dependency in the supply chain. This has had an impact on how the suppliers adopt RFID to embrace the mandates. The impact is likely to have a long term effect on current business models. Our study into the existing literature reveals three tiers of the effects of mandates. The effects are best examined by separating out the suppliers into two groups: suppliers adopting the technology under the mandates and suppliers not affected by the mandates and adopted a wait-and-see tactic. Moore’s Technology Adoption Life Cycle is used to highlight the chasm between these groups and the early adopters. The objectives of this paper are: (1) to show managers the effects RFID/SC may have on their business models, and (2) to identify possible research areas within the RFID field.