MIS Quarterly Executive


This article examines one of the earliest inter-organizational, real-world RFID (Radio Frequency Identification) projects between a leading European retailer and a fashion merchandise manufacturer. Kaufhof Department Stores and Gerry Weber implemented RFID on item, carton, and palette levels in selected distribution centers and department stores.Over the course of the 5-month project in late 2003, both partners experienced benefits that exceeded their RFID costs. They gained time savings and labor cost reductions. RFID also let the partners experiment with new service offerings to supply chain partners and consumers.The partners learned five lessons: (1) RFID is highly reliable and accurate, but can require some tweaking; (2) RFID transponder costs must decrease to make large-scale adoption economically viable; (3) success depends on addressing crucial management and IT challenges; (4) RFID increases process efficiencies, but these are just the table stakes; (5) competitive advantage comes from use of RFID data.