Supply Chain Technology Evaluation: RFID vs. DataMatrix
Alina Chircu Bentley University
Abstract This teaching case focuses on technology investment decision making for tracking and tracing of products in supply chains. Tracking involves recording how a product moves from supplier to the end customer (by capturing times, locations, ownership, temperature variations, etc.), while tracing involves retrieval of this data to support verification of product quality and provenance. Two major technologies for tracking and tracing in supply chains exist today: optical recognition of 2-D barcodes (with DataMatrix being one of the most widely known such codes), and radio-frequency identification, or RFID. At the back end, both technologies require a redesign of a company’s enterprise systems to capture, store and retrieve track and trace data, and analyze and transform it into actionable knowledge. No unified global technology standard for tracking and tracing exists today. Country-level regulations for track and trace exist only in a handful of industries. For example, tracking and tracing is a regulatory mandate in the pharmaceutical industry in some parts of the world, but most countries, including the US, have not required the use of a specific technology in support of the regulations. Only a few countries have introduced stricter technology-specific mandates (for example, DataMatrix in France and Turkey, and RFID in South Korea). Other industries are less regulated, and leave the technology decision to the supply chain participants. Thus companies – especially those doing business on a global scale - are faced with a complex problem: predicting which technology will take off, globally and in specific countries. Making an investment in the wrong technology, in the wrong geography, or at the wrong time, can be a multi-million dollar mistake. Each technology has different advantages and disadvantages in terms of maturity, cost, risk, regulatory requirements, global adoption, and future benefits from better supply chain data collection and analysis. Therefore, this represents an ideal real-world setting for demonstrating contemporary technology investments methodologies and illustrating the complex decision-making tradeoffs companies face in global supply chains. The case presents an overview of the two technologies, their technical and informational affordances, their effects on supply chain processes, and implications for enterprise systems redesign. Recent examples from several industries and news articles describing technology tradeoffs and adoption challenges are also included. The students have to work in teams, adopt the viewpoint of one supply chain participant, and make a technology investment recommendation with a detailed justification. Articles on technology investment and business value methodologies are recommended as companion readings (and can be introduced in class or assigned for independent reading). This teaching case can be used in managerially-oriented IS courses (such as information systems strategy, acquisition and management), as well as in supply chain technology courses. It was designed and tested for a graduate student population (MBAs or Master’s level), but it can be also used in advanced undergraduate classes. The case supports the development of several skills identified as essential by the most recent IS curriculum documents: understanding emerging technologies and related organizational (and inter-organizational) improvement, analyzing trade-offs, analytical and critical thinking, team work, and leadership.
Recommended Citation: Chircu, A., (2015). Supply Chain Technology Evaluation: RFID vs. DataMatrix
. Proceedings of the EDSIG Conference, (2015) n.3605, Wilmington, NC