Does RFId fit the apparel industry? The case of a prominent Italian company

Purpose: during the last years companies belonging to the apparel industry have paid increasing attention to RFId technology, attracted by the possibility of tracing single items as they move along the supply chain. High product value and technological barriers lower than in other industries (i.e. no liquid, limited metal) makes item level tagging an already feasible scenario. Therefore, RFId seems a really promising tool to address the new challenges related to increasing supply chain complexity and virtuality. This technology has the potential of enhancing supply chain performance not only through higher productivity, but also through increased information availability and accuracy. For all these reasons, numerous pilot projects have been launched (e.g. American Apparel, Serafini and Ferragamo just to name a few). However, although the adoption rate proved to be faster than in other industries, the absolute level of adoption is still lower than expected, with just a few widespread implementations. In this sense, a better comprehension of the real benefits enabled by the technology becomes a key factor in fostering the adoption path. With regard to the case of a major Italian apparel company, the paper explores the value of RFId in this supply chain. Research approach: the analysis is based on an in-depth case study carried out with the collaboration of a major Italian apparel company. About 15 face-to-face interviews have been done, and data triangulation has been assured by accessing company’s internal reports and documents. Technological tests have been performed in the RFId Solution Center of Politecnico di Milano and at the company’s facilities in order to verify the reliability of the suggested RFId solution, thus supporting the process re-design. The impact of RFId on operational logistic performance has been assessed using an activity-based approach, whereas a more strategic analysis has been carried out to evaluate the impact of RFId on the whole supply chain, in terms of RFId-based hang label management implications and tagging scenarios. Findings and Originality: the quantitative analysis allowed to identify the activities of the company’s distribution centre mostly affected by RFId, i.e. sorting, sample controls, with positive implications on shipment accuracy and management of contentious issues, and some additional specific activities (e.g. management of flawed products). However, the evidence is that productivity benefits within the distribution centre, although noticeable, cannot justify alone the introduction of RFId. Instead, RFId requires a pervasive technology shift in which profitability stems from a combination of benefits arising in a large number of processes (i.e. logistics, brand protection, product presentation, store management). Research impact: the quantitative assessment model presented in the paper is of general validity, and enlarges the set of analytical models available in the literature to evaluate the benefits of RFId in the apparel industry. Moreover, the strategic analysis helps identify future research directions. Practical impact: the case study presented in the paper is interesting not only for the analysed company, which could assess the economical feasibility of the described RFId project and determine the best tagging scenario, but also for other companies in the apparel industry, which can calculate the achievable benefits and design the appropriate tagging scenario using the illustrated assessment models. Moreover, the study highlights the importance of considering the combination of the numerous benefits enabled by an RFId pervasive project in order to reach a positive return on investment