Radio-frequency identification technologies utilize a system of tags and scanners to track objects. The system offers many advantages to the main existing alternative, which is bar codes. RFID does not require line-of-sight, supports a larger set of unique ID tags, and can be structured to incorporate additional data such as the manufacturer, product type and category, or even track environmental factors such as temperature. They can also be used to separately track a number of different tags in the same area without human assistance (Boli et al., 2010).

Tags are either passive or active; active tags require a power source, either a battery or access to a power network, and so either require batteries or maintenance and are somewhat large. This limits their use in retail and other high-volume supply chain operations, since they must compete with the extremely low cost of a printed bar code (Bunduchi et al. 2011), and after many false starts, such as Wal-Mart’s abortive launch of RFID tech in 2002, companies like Macy’s have committed to tagging 100% of their products, with Macy’s being halfway to their goal (Thau, 2017).

A traditional problem with RFID, like many infrastructural or format changes, is the need for the entire industry to accept the change at once, and this has only become reasonable recently as the cost of the tags has dropped to about $.10 each. More macro research must be done analyzing how major businesses and their suppliers make the decision to switch, what metrics they use, and how critical mass can be reached and consensus can be created more quickly across modern supply chains. This study aims to partly fill that gap.

Most of the interest in the industry is on passive RFID labels, which function indefinitely and can be fit within a small adhesive label. They consist an antenna, an integrated semiconductor chip, and some form of protective insulation or packaging. An external tag reader transfers energy to the tag antenna, which transfers the tag’s ID, one of at least 50 quadrillion (50×1015) possible numerical combinations, enabling the potential individual labeling of every manufactured item in the foreseeable future (Kaur et al., 2011). The two primary methods of scanning are Far-Field Communication and Near-Field Communication, the former of which has a range of 1-6 meters, the latter within about 20-30 centimeters (Wang & Wang, 2009), although these are subject to technological change and signal boosting, as well as environmental conditions and system compatibility issues.

Tags can contain far more information than a single ID; given the amount of memory that a cheap label-sized microchip can store nowadays, including read-write memory that allows editing of basic information, allowing everything from the recording of specific defect or processing information to distributed memory, to time stamps, to ownership history. RFID tags can also be modified to include sensors which measure impact, temperature, or tampering, which offer a number of applications for the prevention of theft or other damage to the product (Wang & Wang, 2009), and this has obvious applications for the fashion industry, from everything to CRM to care labeling management to production control to brand segregation (as a brand symbol and feature) to added-value systems that can automatically suggest accessories. However, this diversity of applications discourages standardization and reduces economy of scale (Rizzi et al, 2016), making widespread adoption difficult while also encouraging it for companies which can effectively create value. Exploring how to build consensus and tip the balance from early adopters to more widespread adoption can help speed the process and promote industry growth and development.

Assessment of RFID Applications for the Supply Chain

RFID tags have made headlines and found niche applications for about two decades now, and although they have regularly threatened to completely overthrow the bar code and transform all aspects of retail, these benefits have largely yet to materialize. Wal-Mart’s failed attempt in the early 2000s has been mentioned, although back-end systems have been more successful: German textile manufacturer Gardeur AG has rolled out an RFID system company-wide (Wessel, 2006), China International Marine Containers has been able to launch a passive RFID tracking system throughout its inventory tracking system (Gambon, 2006), and Macy’s has remained committed to RFID tech since setting its goal of having all products tagged by the end of 2017 (Thau, 2017). For companies whose scale offers massive potential inventory and loss prevention savings and who use fairly standard and closed-loop logistical systems, such as Best Buy and Wal-Mart, this can be a logical and effective investment, and these companies have largely been at the forefront of RFID technology R&D for over a decade (Age, 2005).

RFID offers a number of advantages in supply chain management, including roles such as tracking products and controlling quality in real time and without itemized manual scanning, as well as increasing the accuracy, reliability, and efficiency of supply chain processes. There are also a number of issues attached to the system. On the subject of memory, since data can be stored in great detail and accessed remotely, if the tag is not removed, it could track the customer everywhere they go, informing all local scanners of their purchases, and shaping direct-marketing practices to track consumers (Thiesse, 2007). These tags can also be used by criminals, who can use RFID tags to identify wealthy consumers as targets, and if not regulated, companies can continue using the RFID tags as means of gathering marketing information on consumers (Weber, 2010). Remedial or protective efforts can be made, such as by installing a kill switch for RFID tags at the purchasing stage, or a blocker tag that muddles RFID signals. The other key issues are cost, which is increasingly low but remains above the virtual zero-cost level of printed bar codes, as well as issues of design to ensure reliability, compatibility, and security (Weber, 2010), as well as encouraging acceptance and awareness of this new system among consumers as well as producers.

Inventory Management & Bullwhip Effect

The Bullwhip Effect, also knowns as the Forrester Effect after its inventor Jay Forrester, who first described it in a 1961 book entitled Industrial Dynamics, has long been an issue plaguing the field of inventory management. It describes a phenomenon in which minor changes in consumer demand tend to provoke a disproportionate response from suppliers, who in turn receive an exaggerated response from manufacturers, just as a small motion at the handle of a whip can produce a very strong force at the end. A classic example in the apparel industry comes from Proctor & Gamble, which noticed minor fluctuations in the consumer demand for Pampers, but executives were surprised at the variability in their distributor’s orders, with even further variations found in the orders to suppliers such as 3M (Lee Madmanabhan & Whang, 1997). RFID offers a potential aversion of this situation by enabling real-time monitoring of inventory and demand across the entire supply chain by tracking the production, circulation, and consumption of all products in a supply chain; this enables manufacturers to track real-time demand of their products, and enables customer-facing sellers to identify products which tend to sell more or less, items which are at risk of theft, and more effectively manage internal inventory, as well as allowing retailers and middlemen to track the activities of suppliers and inform them if overproduction is becoming an issue.

However, most modern supply chains are thoroughly complicated, and some investigation have shown that most RFID and supply chain models are simplified, particularly in the modern garment industry where many major companies cannot even be completely certain where the ultimate source of their materials are, much less the conditions there, which makes adoption difficult but also provides a possible solution for the conjoined goals of increasing accountability and pursuing sustainable and ethical production (Agrawal & Pal, 2019), though this may encourage companies to adopt RFID technology without ensuring that preparations have been put in place for its smooth operation. Some possible means to increase the effectiveness of RFID systems for ensuring that they remain interoperable across the entire supply chain and can be infinitely expanded. Bunker and Elsherbeni produced an RFID system that is both open-source and modular, which enables free adoption and expansion of the system by any who would use it, minimizing barriers and coasts, and their system can be managed either by handheld devices or in automated stationary computers, providing solutions for a variety of companies with large or small inventories, and these systems can also upload data to the cloud, so any networked computer can access their records (Bunker & Elsherbeni, 2017). Obviously this still presents some security risks, both for exposing consumer and business data, but additional measures can be taken both within the tags and within the systems that surround them, as the fundamentally integrated information networks involved in RFID networks means that security concerns are present in all peripheral systems to the RFID components (Kulkarni, 2014).

Applications in the Fashion Industry

RFID offers a number of special opportunities to the fashion industry. Issues such as counterfeiting of branded products and the ‘gray market’ of semi-legitimate goods or licensed suppliers either arranging for branded goods to be sold without the brand holder’s consent or transferring the designs to other manufacturers have been issues that have haunted the industry for decades, as well as offering potential for reducing loss of apparel to theft, exposure to the elements, and other traditional sources of inventory loss in the fashion industry, and can do so without extensive and costly manual intervention, which would be the traditional means of remediation for these loss points (Vats, 2017). It’s also particularly noteworthy that RFID offers savings at the manufacturing end as well as the retail and logistical phases, through means such as optimizing part, tool, and maintenance procedures in industrial manufacturing and thus reducing costs (Bhiradi & Pillai, 2014). Multiple researchers have found that RFID systems can be implemented in fashion retailing, including the stages of CRM, shop floor management, marketing, promotion, logistics, and inventory management, with prospects for increased operational efficiency and profitability, although commonly identified limitations include the cost of implementation, especially for relatively low-tech, low-margin apparel suppliers, as well as compatibility with existing inventory systems and degree of acceptance among both staff and management (Nayak et al. 2015). All of these factors must be reviewed macroscopically to determine what the major stumbling blocks are for industry-wide adoption of RFID technology and a proposal of how these issues can be minimized or resolved.