Impacts of RFID implementation on cost structure in networked manufacturing

Radio frequency identification (RFID) presents the key innovative solution to automatically capture and track the movement of material items throughout an entire supply chain. In this article, we explore influences of RFID technology implementation on cost and profit efficiencies. For this purpose a mathematical model of supply chain cost structure and functions was created to analyse the impacts. The model, which has also been verified through a case study approach, is aimed to examine the economical impact of RFID implementation at an automotive original equipment manufacturer and its suppliers. To analyse the impact of the traceability system using RFID technology, a cost reduction parameter will be used. Since in automotive supply chains the functional dependence of individual parts is changing in the upstream and downstream supply chain, only certain parts will be calculated with their complete functions and relations.