Minimizing product shrinkage in the supply chain through the use of radio-frequency identification: A case study on a major Australian retailer

Radio Frequency Identification (RFID) has been used for over half a century. Today, RFID is commonly used for electronic toll collection on motor highways, document management, identification of gaming tokens and chips in casinos, tracking and sorting luggage at international airports, managing diamonds for jewellery businesses, and inventory management for pharmaceutical and retail industries. These are just a few of the many thousands of applications that RFID can facilitate. Currently, the retail industry uses barcodes to identify products and Electronic Article Surveillance (EAS) as an anti-theft mechanism solely within retail outlets. Both systems have the ability to play a role in an overall loss prevention strategy, yet they fail to minimise product shrinkage across the entire retail supply chain from the point of manufacture to the end customer. Recent developments in automatic identification (auto-ID) have seen the emergence of Generation-2 (Gen-2) RFID technologies as an asset management solution integrated into the supply chain. In addition, the recent ratification of a global standard for RFID tags and data storage is intended to oversee the technology’s interoperability on a global scale. So far, this type of technology provides a means to uniquely identify tagged items, track and trace an item at any given time and rapidly capture data. One retailer who has fully embraced Gen-2 RFID technology is Wal-Mart in the United States. Wal-Mart has mandated its suppliers RFID enable products as part of this initiative. Retailers based in the United States are adopting RFID technology but it is yet to engage the Australian retail industry. Focusing on RFID as a potential technology to minimise product shrinkage across the retail supply chain, this thesis provides conclusive results in an attempt to complement existing works. It is also designed to further contribute to the field of information technology and the application of RFID, thus bringing with it benefits to the academic community and the retail industry