A study on RFID data based decision making for SCM in apparel industry

Abstract

Traditionally, apparel industry causes high opportunity cost due to the out-of-stock, excess inventory and markdown, etc. To solve the related problems, many business tools and techniques had been introduced in past two decades. As a representative example, SCM has been contributed to enhance the visibility and flexibility of operations in apparel industry. However, still, this industry is struggling to resolve the fundamental problems. Currently, RFID technology is highlighted in many industries. With the technical superiority, RFID would support many supply chain practices faster and accurately. In this perspective, apparel industry is considered the one of promised RFID application area. This study examines the RFID data based decision making for SCM in apparel industry. To measure its effects, first, this study designs a RFID data based decision making model. In term of the sales feature, five types of products are derived. According to the product types, available SCM decision making is defined also. Second, based on literature review, the effect of RFID data based decision making is provided. As a result, early decision making and product classification are available using attractiveness information. Finally, its effect is evaluated through a business case of a particular apparel company in Korea. Through the three times of expert interview, the situations of each decision making are defined. Based on these conditions, cost-benefit analysis is executed to show how profit is changed.