Impact of RFID implementation on operational productivity of a manufacturing firm: a simulation-based study Academic Article in Scopus uri icon

abstract

  • © 2021, The Author(s), under exclusive licence to Springer-Verlag France SAS, part of Springer Nature.Industry 4.0 is the next step in the evolution of the production of goods and provision of services. Despite the prevalence of and growth in the number of technologies that afford higher quality, capability, and productivity, there is a relative dearth of studies on the impact of the implementation of these technologies on the organization itself. Based on the premise that not all technologies suit an organization¿s strategic needs, knowing the impact of adoption of a chosen technology before-the-fact can reduce the risk of investment failure. To overcome the issue of scarcity of data in general, and the aforementioned dearth of information on the impact of technology absorption on an organization, simulation affords a robust solution. We propose system dynamics (SD) simulation as a means to model the incorporation of new technology in a firm and ascertain its impact on the firm¿s operational productivity. For the same, the Visawan¿Tannock SD model of a Thai automaker, a previously identified comprehensive SD model of an automotive manufacturing firm, was chosen for this study. Further, radio frequency identification (RFID) technology was chosen to represent an archetypal Industry 4.0 technology given its status as a mature technology, its widespread adoption, and relative data availability. The simulation of RFID absorption in a firm revealed that it takes considerable impact from investments to manifest as increments in productivity, unlike profits. The results also demonstrate that productivity increments are achieved only when RFID implementation is targeted toward defect reduction and is supplemented with investments in quality management activities.

publication date

  • January 1, 2021