Usage of RFID technology in the internal materialhandling process in the automotive industry

Abstract: Background: The automotive industry accounts for a large part of the European economic structure. Due to both economical and environmental impacts, the industry has undergone substantial changes and companies have to increase their efficiency to stay competitive. An improvement-area, which can be directly influenced by the company is the internal material handling. A new technology that potentially supports the internal material handling process is the radio frequency identification (RFID) technology, which is perceived as a fruitful successor of the common barcoding technology. Even though the RFID technology shows multiple benefits over the barcoding technology, many companies are still reluctant to the application of the new method. The authors therefore strive to provide a deeper understanding of the following two research questions:   RQ 1: To what extent and how is RFID currently applied in the internal material handling process in the investigated automotive companies? RQ 2: For what reasons did the investigated automotive companies decide to apply or not apply RFID technologies to support their internal material handling process?   Purpose: The purpose of this thesis is to show through a multiple case study to what extent and how RFID technology is currently applied to support the internal material handling process in a number of companies in the automotive sector, both original equipment manufacturers (OEMs) and suppliers. Thereupon the main reasons for or against the application of RFID in these companies are examined.   Method: This thesis adopts a positivistic perspective and a deductive approach. It is designed as a qualitative multiple case study carried out in four different companies with five different plants in the automotive industry. Empirical data was gathered through interviews. The analysis is based on primary as well as secondary data.   Conclusions: Throughout the course of the study it became apparent that the RFID technology is on the radar of all investigated companies. Only Scania Zwolle, Volvo Skövde and Bosch Homburg apply the technology and see concrete benefits in the usage of RFID above barcoding. The extent of application here differs from a large scale to a small scale. The three companies name benefits such as an improved automatic tracking & tracing system with improved real-time data quality and a reduction in costs, which is mainly achieved through a reduction of manual labour. Additionally they face benefits, which are business-specific such as the possibility for automatic alerts throughout the internal material handling process at Scania Zwolle, the need for a ‘silent’ successor over barcoding at Volvo Skövde and a supporting tool for their lean management program at Bosch Homburg. VDL Nedcar Born and Scania Oskarshamn in turn name concrete reasons for not applying the technology. VDL Nedcar Born is undergoing substantial changes in their production facility which currently has priority and Scania Oskarshamn does not see benefits that outweigh the high costs for the RFID technology.