The impact of RFID on the centralized reverse supply chain management (RSCM) in apparel industry

Abstract

Recent legislation on customer protection by governments the world over, as it relates to the return of sold merchandise, together with customers’ high expectation of product quality and business desire to provide good customer service, have led to an increase in return rates of sold merchandise Consequently, reverse supply chain management (RSCM) has assumed centre stage in customer, quality, and inventory management. While so much research is on-going in relation to the use of technology to facilitate forward supply chain management, not much investigation is being carried out on the use of technology to enhance reverse supply chain management. Even though barcode based scanning system like current Point of Sales (POS) system is one of the most prevalent technologies for supporting RSCM, barcode has fallen short of industries’ expectation, because the technology suffers from limitations like item-based handling. The thesis of this research is that the use of RFID Technology will impact positively on Centralized Reverse Supply Chain Management in the Apparel Industry. In the course of our investigation we raised the following research questions: $\It{Can RFID be applied on the reverse supply chain management in apparel industry? Will the application of RFID in RSCM impact positively on the effectiveness of the RSCM, How can the impact of RFID on the effectiveness of RSCM be measured and recorded?}$ An RFID-based smart shelve / fitting room and inbound/outbound facilities was designed to collect and to track various return related data such as return inbound date and reasons for which they were returned. The system generates a product attractiveness rating as an estimate of the return potential of the product. These available information and functions supports return decision making and efficient return management. The system also activates transshipment with the reduction of ‘end of season’ return. In addition, the return track and trace executes more ef...