RFID-integrated plastic pallets in the grocery industry : Contribution to supply chain efficiency

Abstract: Problem – Companies and supply chains, such as those in the grocery industry, continuously face stricter requirements in the form of customer satisfaction, quality, profit margins, as well as information sharing in order to stay competitive. One specific technology that may be used in dealing with increasing competitive demands is the radio frequency identification (RFID) technology. A wide body of research recognizes the positive impacts from RFID, yet even so, doubts and uncertainty have been present among different supply chain members in industries striving to put the RFID technology to use. Nevertheless, many actors in the Norwegian grocery industry are replacing traditional wood pallets with plastic pallets, and these pallets are integrated with RFID tags. Purpose – The purpose of this thesis is to investigate how plastic pallets with integrated RFID tags can contribute to improve supply chain efficiency in the grocery industry. Also, the managerial perception on the pallets and their accompanying technology will be compared to the existing literature, to identify if the managerial opinion supports the literature, and if not, where the gaps exist. Method – The thesis combines an exploratory and an explanatory qualitative study of the managerial perception of RFID pallets in the Norwegian grocery industry, and investigates whether the perception supports the literature. The empirical material is gathered through telephone interviews with logistics and warehouse managers in the various companies. Conclusions – Physical implications: The managerial perceptions’ support towards the addressed implications of the reviewed literature is mixed. RFID pallets improve automatic operation processes through reduction in downtime and eases physical handling of pallets. Additionally, sorting of pallets becomes less labor demanding. Regarding holding of goods, the managerial perceptions do not seem to view RFID pallets as an important factor for efficiency improvement. Information related/RFID aspects’ implications: The managerial perceptions in these concerns were based on plans and thoughts, since the technology had not been put to use. There is a difference in producers’ and wholesalers’ perception of whether efficiency in receiving of goods can be improved through utilizing RFID pallets. Concerning dispatching of shipments, the managerial perceptions support the literature in that information-related activities can be automated, and thus improve efficiency and reduce risk of human errors. In regards to information sharing, the managerial perception supports the literature, but highlights that the information’s nature determines whether sharing is considered. Further research could include the retail store level to get a more complete supply chain picture, and also apply the research methods to a larger area in order to investigate the transferability to other industries and countries.