RFID-enabled supply chain replenishment

Abstract

This thesis explores the potential application of RFID (Radio Frequency Identification) technology as an AIDC (Automatic Identification and Data Capture) mechanism in the Consumer Packaged Goods (CPG) industry. MIT's Auto-ID Center is coordinating a consortium of CPG industry players, channel partners. RFID technology vendors, and consulting firms to encourage the widespread adoption of this technology through collaboration and shared development. Unilever Home and Personal Care, North American Division, is a sponsor and active participant in Auto-ID field tests. In an industry characterized by intense rivalry and formidable buyer power, Unilever HPC recognizes that cost savings enablers are key to survival. Additionally, the information transparency available through the RFID hardware and software infrastructure could mitigate the bullwhip effect, reducing inventory and improving on-shelf availability rates throughout the entire supply chain. Since this technology is still in the ferment stage of its AIDC lifecycle, Unilever and other industry players are unclear about the value creation and capture potential of RFID. This thesis attempts to highlight potential implementation benefits and challenges to enable more informed decisions. Additionally, it discusses how Unilever can leverage the dramatic improvement in information flow to drive paradigmatic change in its supply chain, providing a clear competitive advantage in the CPG industry.