Warehouse contextual factors affecting the impact of RFID

Empowered by the possibility to automatically identify unique instances, radio frequency identification (RFID) is expected to revolutionize warehouse processes. However, every warehouse differs from each other in several ways. Given such dimensionality, a credible assessment of the true value of RFID requires that the contextual factors that differentiate one warehouse from another are taken into account. The same RFID implementation may generate high productivity in one warehouse but not in another, because the former warehouse may have characteristics that may influence the impact of RFID. As a result, the purpose of this paper is to provide a framework for identifying key contextual factors that appear to be contingent on the link between RFID and warehouse performance.

The framework derived from a two‐phase research design. The first phase incorporated two case studies. This was an exploratory study and, therefore, there was a great deal of iteration between the cases studies and the literature. The objective was to identify important contextual factors that may moderate the impact of RFID. The second phase incorporated simulation modelling. This was a confirmatory study. The objective was to develop two simulation models of the cases from the previous phase, and as a result, verify the effects of particular contextual factors on process performance.

As an outcome of this research, an initial subset of “warehouse contextual factors” is developed that may moderate the impact of RFID on warehouse performance. The framework is not an evaluating technique, but is a useful starting point for examining the value of RFID in the warehouse context.

Further work is required to support the significance of the moderating effects of the proposed contextual factors.

For practicing managers the paper directs attention to key warehouse contextual factors that appear to be contingent on the link between RFID and warehouse performance. It also confirms that the achievement of RFID value is attainable only in combination with the redesign of business processes.

The paper integrates both theoretical and practical considerations regarding formalization of the contextual factors that may moderate the impact of RFID on warehouse performance. Therefore, it represents an initial step in building theory to develop guidelines for understanding the variance in the performance between different RFID‐enabled warehouse settings.