Impact of RFID Technology on Supply Chain: A Simulation Approach

This paper addresses the impact of RFID technology on supply chain by increasing its visibility of in-transit products. In the proposed system, active RFID tags are attached to perishable products in the transportation, so that real-time information of in-transit products is achievable, and shared in the whole chain system. Then, hierarchical decision is made according to this real-time information. In the lower level, optimal route is chosen to minimize the total cost of delivering. In the upper level, optimal order is calculated to satisfy customer demand and minimize the variance of the orders. By multi-agent approach, we simulate a three-echelon supply chain, in which each supply chain member is represented and acted as an autonomous agent. Our results prove that sharing of RFID generated information can significantly improve supply chain system performance and reduce bullwhip effect of the supply chain. Moreover, it indicates that this real-time information will be much valuable if it is further integrated into operational supply chain management.