A Framework for Assessing the Value of RFID Implementation by Tier-One Suppliers to Major Retailers

Radio frequency identification (RFID) is a rapidly evolving technology for automatic identification and data capture of products. One of the barriers to the adoption of RFID by organizations is difficulty in assessing the potential return on investment (ROI). Much of the research and analyses to date of ROI in implementing RFID technology have focused on the benefits to the retailer. There is a lack of a good understanding of the impact of RFID at upper echelons of the supply chain. In this paper, we present a framework and models for assessing the value of RFID implementation by tier-one suppliers to major retailers. We also discuss our real-life application of this framework to one of Wal-Mart’s top 100 suppliers.