Academic journal article International Journal of Management

Factors Affecting the Adoption of Radio Frequency Identification Technology by Logistics Service Providers: An Empirical Study

Academic journal article International Journal of Management

Factors Affecting the Adoption of Radio Frequency Identification Technology by Logistics Service Providers: An Empirical Study

Article excerpt

The factors influencing RFID technology adoption by logistics service providers from the perspective of technology, organization and environment is studied. The data came from a questionnaire survey on logistics service providers in Taiwan, and 142 companies. According to the survey results, about 60% of logistics service providers are interested in RFID technology, but only about 17% of them have the experience of adopting RFID technology. Each of the factors had a positive influence on the adoption of RFID technology. The following factors were found to be significantly related to the adoption of RFID technology by the companies in the sample; explicitness and accumulation of technology, organizational encouragement, quality of human resources, and governmental support.


Due to the emergence of the concept of supply chain management, logistics management has become a strategic factor that provides a unique competitive advantage in the global market (Christopher, 1993). One of the keys to effective supply chain management is to make the logistics function more efficient in the supply chain. Consequently, logistics service providers (LSPs) play an important role in the supply chain (Bowersox, Closs, & Cooper, 2002). The purpose of logistics is the supply of service or product to the demander or demanding unit at the right time, with the right quantity, in the right quality, with the right cost and at the right place. Over the past decade, many LSPs have acknowledged that their supply chains are not responsive enough. If they are to operate more efficiently and responsively, they must adopt technologies that will enable manufacturers, warehouses, and retailers to communicate with each other more efficiently (Cohen, 2000).

With the rapid growth of technologies, research has shown that the adoption of technological innovations is the most important tool for enterprises to keep their competitive advantage. Recently, a body of evidence shows that LSPs can increase their performance by employing new technologies. Many LSPs began to improve their operation efficiency by continuous implementation of information or automation technologies according to their business characteristics (Mason-Jones & Towill, 1999; Sauvage, 2003). Speakman (2002) suggested that LSPs could improve their performance by employing new technologies. Sauvage (2003) found that technological effort is the key variable and means of differentiation between LSPs. The Logistics industry should pay more attention to innovation in logistics service which can be implemented through technology, knowledge and relationship networks (Chapman, Soosay, & Kandampully (2003).

Among technologies, radio frequency identification technology (RFID) has been an important application in logistics operations and supply chain management (Srivastava, 2004; Angeles, 2005; Smith, 2005). Federal Express, Dell, Proctor and Gamble, the US Department of Defense, and the European retailer Metro Group have begun to utilize RFID technology in their supply chain systems (RFID Journal, 2004). Much like they did with electronic data interchange (EDI) and bar code development, Wal-Mart has been the driving force behind the adoption of RFID, which will mean significant changes in the way supply chains are managed. Wal-Mart announced that they would require their larger suppliers to implement RFID on every box and pallet shipped to Wal-Mart by 2005 (Boyle, 2003).

RFID technology is compact and robust, and has been used for in many applications including the manufacturing and distribution of physical goods. RFID is one type of auto-identification technology that uses radio waves to identify individual physical objects. An RFID tag consists of two main components: an antenna and a chip containing an electronic product code. RFID can help item level identification, which is useful for easily and efficiently identifying each item within the entire supply chain (Davis, & Luehlfing, 2004). …

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