The utilization of radio frequency identification (RFID) on operational performance through supply chain management and logistics performance of automotive industry

Abstract

Radio Frequency Identification (RFID) is a technology currently playing an important role in the industrial sector and there is some speculation that it may replace barcode technology. RFID can be used to identify products, trace raw materials, work-in-process, finished goods, supply chain management and logistics performance. This enhances work efficiency by reducing working steps and increasing accuracy. The technology has been widely used in the automotive industry to increase work potential and efficiency. Therefore, this research is intended to investigate the application of RFID and its relationship to supply chain management and logistics performance in the automotive industry. The study will focus on the issue of operational performance. The sampling frame consisted of 1,975 companies in the automotive parts manufacturing industry in Thailand. The companies were identified through the Office of Business Development, Ministry of Commerce of Thailand. Next, a questionnaire was distributed to IT leaders of those automotive parts manufacturing companies. Through a data cleaning procedure, feedback from IT leaders of 144 companies were analyzed using Structural Equation Modeling (SEM). Finally, IT leaders from five automotive parts manufacturing companies were selected for an in-depth interview. The results show the model supported the regression hypotheses, were accepted at a p-value of < 0.05. RFID utilization had not only a direct effect on operational performance, but also an indirect impact on supply chain management and logistics performance.