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The impact of RFID and EPC network on the bullwhip effect in the Italian FMCG supply chain

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  • Bottani, Eleonora
  • Montanari, Roberto
  • Volpi, Andrea

Abstract

This paper provides a quantitative assessment of the potential reduction in the bullwhip effect, and thus in safety stocks, in the supply chain, thanks to real-time visibility of product flows provided by the Radio Frequency Identification (RFID) technology and the EPC Network. The assessment is grounded on a "representative" Italian Fast Moving Consumer Goods (FMCG) supply chain; specifically, the "representative" supply chain is composed of three echelons, namely manufacturers, distributors and retailers of FMCG, whose main features, in terms of both quantitative and qualitative data, were derived through an appropriate survey phase. Reduction of safety stocks is determined based on quantitative methodologies available in the scientific literature. The results of the assessment show that real-time visibility of the supply chain, brought in by RFID and the EPC Network, can dramatically reduce the bullwhip effect, substantially affecting the economical profitability of the whole FMCG supply chain.

Suggested Citation

  • Bottani, Eleonora & Montanari, Roberto & Volpi, Andrea, 2010. "The impact of RFID and EPC network on the bullwhip effect in the Italian FMCG supply chain," International Journal of Production Economics, Elsevier, vol. 124(2), pages 426-432, April.
    • Handle: RePEc:eee:proeco:v:124:y:2010:i:2:p:426-432
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    References listed on IDEAS

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    Cited by:

    1. Ahmed Musa & Al-Amin Abba Dabo, 2016. "A Review of RFID in Supply Chain Management: 2000–2015," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 17(2), pages 189-228, June.
    2. Kök, A. Gürhan & Shang, Kevin H., 2014. "Evaluation of cycle-count policies for supply chains with inventory inaccuracy and implications on RFID investments," European Journal of Operational Research, Elsevier, vol. 237(1), pages 91-105.
    3. Isaksson, Olov H.D. & Seifert, Ralf W., 2016. "Quantifying the bullwhip effect using two-echelon data: A cross-industry empirical investigation," International Journal of Production Economics, Elsevier, vol. 171(P3), pages 311-320.
    4. Montecchi, Matteo & Plangger, Kirk & West, Douglas C., 2021. "Supply chain transparency: A bibliometric review and research agenda," International Journal of Production Economics, Elsevier, vol. 238(C).
    5. Dai, Hongyan & Li, Jianbin & Yan, Nina & Zhou, Weihua, 2016. "Bullwhip effect and supply chain costs with low- and high-quality information on inventory shrinkage," European Journal of Operational Research, Elsevier, vol. 250(2), pages 457-469.
    6. Feng Tao & Tijun Fan & Kin Keung Lai & Lin Li, 2017. "Impact of RFID technology on inventory control policy," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(2), pages 207-220, February.
    7. Biswal, Arun Kumar & Jenamani, Mamata & Kumar, Sri Krishna, 2020. "The impact of RFID adoption on donor subsidy through for-profit and not-for-profit newsvendor: Implications for Indian Public Distribution system," Socio-Economic Planning Sciences, Elsevier, vol. 69(C).
    8. Zhang, Allan N. & Goh, Mark & Meng, Fanwen, 2011. "Conceptual modelling for supply chain inventory visibility," International Journal of Production Economics, Elsevier, vol. 133(2), pages 578-585, October.

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