Supply Chain Collaboration Drives Successful Tracking

Tracking technologies such as RFID, WLAN and GPS have become increasingly important due to heightened service, operations, security, and regulatory requirements. While past research has examined the value of tracking technology (RFID in particular), little is known about how and to what extent product, supply network, and environmental characteristics impact post-adoption phases.

Based on findings from a focus group study, Loyola University Chicago's new Supply Chain Management (SCM) program developed a theoretical model of tracking technology assimilation. By testing this on a global survey of 535 supply chain executives and task holders, Loyola's Rahul C. Basole, PhD, and program director Maciek Nowak, PhD, saw a distinct order in which product, supply network, and environmental characteristics influence each phase of tracking technology assimilation.

The results strongly suggest that assimilation is initiated by an external stakeholder in a firm's supply chain, whether that is a competitor, customer or government regulator. This indicates that firms are not proactive but rather reactive to initiating tracking technology, confirming the “wait-and-see” philosophy many firms have for an unproven technology.

Under these circumstances, a manager must be aware that tracking technology assimilation may not be occurring on terms agreeable to the firm. Further, this result suggests that firms not initiating tracking technology assimilation should be prepared to act quickly once an external stakeholder adopts tracking technology.

The results strongly suggest that tracking technology is not a silver bullet and, by itself, cannot connect all the dots in a firm's supply network. As supply chains grow in complexity, firms must be aware of their supply chain configuration, which includes knowledge about the number and location of supply chain participants, handoffs and transfer points.

Firms must develop and foster strong collaborative ties with their supply chain partners, since tracking technology implementation often requires a joint effort. In order to reap the full benefits, managers must also invest in an integrated technology infrastructure that ties-in traditionally disconnected enterprise information systems. Failure to do so will limit adoption and routinization.

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