Question

1. What is RFID's primary purpose in the supply chain?

2. What is the bullwhip effect and how can it affect a supply chain and a firm's profitability?

3. Explain the following and how each impact the supply chain - procurement, logistics, and materials management.

Answer 1

1. Radio-frequency identification (RFID) has a very significant role to play in Supply Chain. The RFID chips are used to transfer the data between such chips using a wireless form of communication system. Following are the role of RFID chips in Supply Chain:

• In Supply Chain, when the transported goods are to be delivered urgently, then RFID technology could be used to resort to the fastest toll booth lane in order to reach the destination faster, with a deduction of certain dollars from the account to avail such a privilege.
• It helps in tracking the shipped items on real time in the Supply Chain network.
• Further, the role of RFID chip is extremely important in Supply Chain when a certain truck is loaded with goods and once the goods are delivered, this chip helps to identify how much of the goods are loaded in the truck and out of it, how much is unloaded upon delivery or removed.
• When the contents of the boxes are tagged with RFID chips, then the moment those boxes are delivered to the customers or clients in the Logistics network, such customers or clients would be instantly in the position to identify all the contents within those boxes.
• When these RFID tags are zoomed under the scanner, there could be an instant inventory count in the system with further details of the stock, thereby making the RFID tags very suitable even for the small and medium scale businesses, to maintain the accuracy check of the inventory.