University of Wollongong

Research Online
Sydney Business School - Papers Faculty of Business

2013

Factors affecting radio frequency identification

technology implementation: a comparative study
of Australian and Chinese supply chains
Shams Rahman
RMIT University, shamsr@uow.edu.au

Shahadat Khan
RMIT University

Stephen Waters
University of Wollongong, smw080@uow.edu.au

Laura Yang
Shanghai University of International Business and Economics

Publication Details
Rahman, S., Khan, S., Waters, S. & Yang, L. (2013). Factors affecting radio frequency identification technology implementation: a
comparative study of Australian and Chinese supply chains. 24th Australasian Conference on Information Systems (pp. 1-12).
Melbourne, Australia: ACIS.

Research Online is the open access institutional repository for the University of Wollongong. For further information contact the UOW Library:
research-pubs@uow.edu.au
Factors affecting radio frequency identification technology
implementation: a comparative study of Australian and Chinese supply
chains
Abstract
Radio Frequency Identification (RFID) technology has emerged as one of the most significant process
innovations in supply chain contexts. It is a proven technology with the capability to increase accuracy,
efficiency and speed of supply chain processes; reduce inventory and handling costs. The aim of this study is
to investigate and compare enabling factors of RFID implementation in Australian and Chinese supply chains.
Employing the analytic hierarchy process (AHP) approach this study suggests that managers in Chinese firms
have a very different view concerning importance of factors for RFID implementation. Australians firms view
technological factor-category as the most important priority, whereas Chinese firms view it as the least
important category. Again, Australian firms view organizational factor-category as one of the least important
priorities in terms of RFID implementation, whereas Chinese view it by far the most important. With respect
to external environment category, there was no agreement - opinions varied widely. For Chinese managers this
category of factor is quite important, whereas Australian managers view it as the least important priority.
However, with respect to economic factor-category, views were generally in agreement, although levels of
importance differed significantly. For effective implementation of RFID in their supply chains, managers in
Australian and Chinese firms must take into account priorities associated with these factor-categories and
individual factors. In particular, Chinese firm must buy-in top management support, and concentrate on
hardware&software cost and tag cost, whereas, Australian firm must concentrate on standards, tag cost and
implementation cost.

Keywords
supply, chains, identification, frequency, radio, affecting, factors, implementation, australian, comparative,
study, chinese, technology

Disciplines
Business

Publication Details
Rahman, S., Khan, S., Waters, S. & Yang, L. (2013). Factors affecting radio frequency identification
technology implementation: a comparative study of Australian and Chinese supply chains. 24th Australasian
Conference on Information Systems (pp. 1-12). Melbourne, Australia: ACIS.

This conference paper is available at Research Online: http://ro.uow.edu.au/gsbpapers/445

24th Australasian Conference on Information Systems Challenges of RFID Application in Australia and China
4-6 Dec 2013, Melbourne Rahman et al.

Factors Affecting Radio Frequency Identification Technology

Implementation: A Comparative Study of Australian and Chinese Supply
Chains
Shams Rahman
Shahadat Khan
School of Business IT and Logistics
RMIT University, Melbourne, Australia
Email: shams.rahman@rmit.edu.au

Stephen Waters
Sydney Business School
Wollongong University, Wollongong, Australia
Email: s.waters@uow.edu.au

Laura Yang
International Education School
Shanghai University of International Business & Economics, Shanghai, China
Email: laurayang7010@yahoo.com.cn

Abstract
Radio Frequency Identification (RFID) technology has emerged as one of the most significant process
innovations in supply chain contexts. It is a proven technology with the capability to increase accuracy,
efficiency and speed of supply chain processes; reduce inventory and handling costs. The aim of this study is to
investigate and compare enabling factors of RFID implementation in Australian and Chinese supply chains.
Employing the analytic hierarchy process (AHP) approach this study suggests that managers in Chinese firms
have a very different view concerning importance of factors for RFID implementation. Australians firms view
technological factor-category as the most important priority, whereas Chinese firms view it as the least
important category. Again, Australian firms view organizational factor-category as one of the least important
priorities in terms of RFID implementation, whereas Chinese view it by far the most important. With respect to
external environment category, there was no agreement – opinions varied widely. For Chinese managers this
category of factor is quite important, whereas Australian managers view it as the least important priority.
However, with respect to economic factor-category, views were generally in agreement, although levels of
importance differed significantly. For effective implementation of RFID in their supply chains, managers in
Australian and Chinese firms must take into account priorities associated with these factor-categories and
individual factors. In particular, Chinese firm must buy-in top management support, and concentrate on
hardware & software cost and tag cost, whereas, Australian firm must concentrate on standards, tag cost and
implementation cost.

Keywords
Analytic Hierarchy Process (AHP), Australia, China, Enabling factors, Radio Frequency
Identification (RFID) technology

INTRODUCTION
Radio Frequency Identification (RFID) technology which uses radio waves to identify, trace and track products
is increasingly being used in supply chains (Sarac et al., 2010). However, application of this technology is not
new. Initial applications of RFID include electronic road toll collection (Landt, 2001), railcars tracking and
animal tracking (Dew, 2006; Jones et al., 2005). Dell’s assembly line workers build computers based on
information provided by RFID tags attached to moving trays (Srivastava, 2004). Boeing Ltd utilises RFID by
fastening RFID tags containing critical information to spare parts for maintenance purposes (Asif and
Mandviwalla, 2004). Recent advances in RFID technologies, improvements in Internet technologies and lower
costs of tags have generated an interest in RFID capabilities as an inter-organisational system. RFID supply
24th Australasian Conference on Information Systems Challenges of RFID Application in Australia and China
4-6 Dec 2013, Melbourne Rahman et al.

chain applications became popular only following the mandate from retail giant Wal-Mart in 2003 (Prater and
Frazier, 2005).
Literature suggests that adoption of RFID technologies can increase accuracy, efficiency and speed of supply
chain processes; reduce storage and handling costs (Li et al., 2006). Thonemann (2002) reports that by deploying
RFID technologies Wal-Mart and Procter and Gamble reduced inventory by 70% and improved service levels
from 96 per cent to 99 per cent. Hoffman (2007) reports that companies that have adopting RFID made
significant improvement in key supply chain metrics such as cycle time, per cent on-time delivery, safety stock,
changeover time and out-of-stocks. However, such gains are not without challenges such as development and
implementation costs, complexity and compatibility of technologies and, privacy and security. The purpose of
this study is two folds. First, to assess the criticality of RFID implementation factors in Australian and Chinese
supply chains. Second, compare the importance of these factors in the Australian and Chinese supply chain
contexts.
The remainder of the paper is organized as follows. First, we review the literature on RFID implementation in
the following section and develop a conceptual framework. Next, we provide the research methodology, and
background of sample organisations and respondents. Then we present and discuss our results. Lastly, we
present our conclusions and limitations of this study.

LITERATURE REVIEW
Literature on RFID identifies a number of issues believed to be obstacles to RFID implementation. These
include incompatible standards, a lack of infrastructure, and the failure to precisely calculate return on
investment (ROI) (Wu et al., 2006). In addition, the factors such as technical limitations, cost constraints and
organizational barriers have also deepen the reluctance of top levels of management to embrace RFID (Curtin et
al., 2007).

Drawing on extant empirical RFID adoption literature, Brown and Russell (2007) establish the suitability of
three categories of factors for analysing the implementation characteristics of RFID technology. These include
technological, organisational, and external environmental challenges (Brown and Russell 2007). In addition,
economic factors were considered as an important category (Shih et al., 2008). Therefore, our literature includes
these four categories. These factor-categories and specific factors are discussed in the following sub-sections.

Technology-related Factor Category

Earlier literature identifies compatibility, and complexity, as challenges influencing the implementation of
information technology (Tornatzky and Klein 1982). These challenges are acknowledged in the adoption process
of both EDI (Premkumar et al., 1997) and e-business (Beatty et al., 2001). Davenport and Brooks (2004)
describe uncertainties about the compatibility of RFID with other systems (including enterprise resource
planning [ERP] systems) as a potential obstacle. RFID is a complex set of considerations, with different
operating systems, hardware, languages, and architectural structures (Gessner, Volonino et al. 2007). These
challenges are compounded by the fact that RFID networks require globally synchronised numbering, frequency
and power standards. Research ranks standards as the number one challenge from a list of twelve issues shaping
the future of RFID (Viehland and Wong, 2007). RFID requires several important standards to work effectively.
A summary of the technology-related factors is given in Table 1.

Table 1. Technology-related Factors

Technological factor category Source

Compatibility Attaran 2007; Curtin et al. 2007; Tsai et al. 2010
Complexity Loebbecke 2007; Park et al. 2009; Wamba 2011

Standards Sweeney 2005; Twist 2005; Viehland & Wong 2007

Data volume Angeles 2005; Lin et al. 2007; Twist 2005; Zeier et al. 2009

Economic Factor Category

Cost is another important issue regarding RFID adoption (Viehland and Wong, 2007). Tag cost, which range
between USD$0.05-0.25 (Attaran, 2007), is one of the critical aspects of variable cost. Infrastructure costs also
affect adoption intentions with one source estimating the cost of infrastructure as between USD$2-16 million
(Chappell et al., 2003). Finally, training costs are often unknown and may at times be greater than the expenses
24th Australasian Conference on Information Systems Challenges of RFID Application in Australia and China
4-6 Dec 2013, Melbourne Rahman et al.

on technology (Walker, 2004). These economic factors impact adversely on RFID adoption intentions when
compared to the relatively cheap, established costs of barcode technology. A summary of the economic factors is
given in Table 2.

Table 2. Economic-related Factors

Economic factor-category Source

Hardware and software cost Asif & Mandviwalla 2004; Brown & Russell 2007;
Smart et al. 2010; Walker 2004
Tag cost Lee & Lee 2010; Li et al. 2006; Reyes & Jaska 2007

Implementation cost Sarac et al. 2010; Veeramani et al. 2008

Organisational Factor Category

Two organisational factors that may influence the implementation of information technology are organisational
size and top management support (Grover, 1993). Research suggests that RFID technologies are expensive and,
hence, could be more applicable for larger organisations with the requisite resources (Lin and Ho, 2009).
Equally, larger organisations must often choose between risky innovations to remain competitive. Top
management commitment to IT initiatives is critical for the adoption of RFID technology (Ngai et al., 2005;
Attaran, 2007). Technological readiness includes the critical abilities of being able to source IT skills and
partnering with competent technology providers (Sharma et al., 2007). A summary of the organisational factors
is given in Table 3.

Table 3. Organisational Factors

Organisational challenge-category Source

Top management support Attaran 2007; Wamba et al. 2010; Wang et al. 2012
Organisational size Hamilton et al. 2009; Jones et al. 2005; Strüker & Gille 2009
Organisational IT readiness Angeles 2009; Kim & Garrison 2010; Lee & Shim 2007

External Environmental Factor Category

Studies suggest that a number of external environmental factors influence the RFID implementation. Firstly,
industry pressure affects decisions to adopt RFID (Sharma et al., 2007). For example, Walmart’s mandate to
install RFID systems (Reyes and Jaska, 2007), and suppliers’ awareness of the consequences of not complying
(Murphy, 2003), resulted in the adoption of the technology. Secondly, security is a major factor in considerations
of implementing RFID. Open systems raise serious concerns about corporate espionage, trust, inadvertent
disclosure of information to competitors, and threats to infrastructure (Shih et al., 2005). Technology providers
are continuously counteracting these issues in order to build confidence in the security of RFID (Backhouse,
2002). Finally, privacy is an issue with consumers concerned about unwanted access to information held on
tagged products after they leave the store (Knospe and Pohl, 2004). Benetton, a major international clothing
producer, abandoned tagging plans due to consumer boycott actions (Atkinson, 2004). A summary of the
external environmental factors is given in Table 4.

Table 4. External environmental factors

External environmental factor category

Source
Industry forces Boeck & Wamba 2008; Hingley et al. 2007; Loebbecke &
Reyes 2007; Sullivan 2004
Security Alomaur & Poovendran 2010; Langheinrich 2009; Pietro
& Molva 2011; Spiekermann 2009; Weber 2010
Privacy Alomaur & Poovendran 2010; Angeles 2007;
Langheinrich 2009; Spiekermann 2009; Weber 2010
24th Australasian Conference on Information Systems Challenges of RFID Application in Australia and China
4-6 Dec 2013, Melbourne Rahman et al.

The issues and challenges foregrounded above inform our conceptualisation of factor categories in our work on
industry intentions to implement RFID. The enabling factors of RFID implementation and the structure of the
problem are shown in Figure 1.

RESEARCH METHODOLOGY
Method of Analysis – Analytic Hierarchy Process
This study employs the analytic hierarchy process (AHP) method for analysis. AHP is a decision-making
approach which integrates simultaneously qualitative and quantitative information for prioritizing alternatives
when multiple criteria must be considered. Over the last twenty-five years AHP has been widely used to solve
decision problems in areas such as supply chain risks assessment (Schoenherr et al. 2008), 3PL selection (Gol
and Catay, 2007); supplier selection (Wang et al. 2004). To understand the nature of the AHP applications
surveys were conducted in the past (Vaidya and Kumar, 2006; Steuer and Na, 2003; Ho, 2008). Steuer and Na
(2003) review the literature of the applications of AHP in the finance area, whereas, Vaidya and Kumar (2006)
explore the use of AHP in areas such as education, engineering, government and sports. Ho (2008) reviews the
literature of the applications of the integrated AHPs published between 1997 and 2006. More recently, Rahman
et al. (2011) investigate the applications of multi-criteria decision making technique AHP and its variants such as
fuzzy AHP and ANP in logistics research. With AHP complex decision problems can be decomposed into a set
of manageable decision-making problems. Besides providing the consistency in managers’ judgement, the main
benefit of AHP in relation to other methods, such as obtaining managers preferences through Likert scales, is the
fact it is in line with the basic idea of the trade-off concept (Skinner, 1969). It forces managers to make explicit
comparisons between priorities. This results in relative importance weights for each priority challenges.
Moreover, the AHP analysis not only illuminates the ranking of the priorities, but also assesses how much
more/less important a given priority is.

RFID
implementation
Objective factors

Technological Economic Organisational External environment

Factor category
factor category factor category factor category factor category
Top management support
IT readiness
Compatibility

Firm size
Data volume

Privacy

Security

Industry force
Standards

Hardware/Software cost
Complexity

Implementation

Tag cost

Factor

Figure 1: Structure of the AHP model

The modeling process of AHP involves four steps:

1. assessment of the key factors of RFID implementation,
2. structuring the problem as a hierarchy and building the AHP model,
3. collection and compilation of experts’ opinions and application of the prioritisation procedure, and
4. determination of critical factors through the synthesis of normalized priority weights and checking the
consistency of opinions of respondents.

Step 1: Identification of key factors. The first step involves identification of key factors of RFID implementation.
A total of thirteen challenges were identified and classified into four factor-categories (see Figure 1). These
24th Australasian Conference on Information Systems Challenges of RFID Application in Australia and China
4-6 Dec 2013, Melbourne Rahman et al.

factors are used for analysis and to identify critical factors of RFID implementation in Chinese and Australian
supply chains.
Step 2: Structuring the problem as a hierarchy. The structuring step consists of breaking down any complex
multiple criteria decision-making problem into a series of hierarchies or set of integrated levels.
Step 3: The next step is the application of the prioritization procedure to determine the relative importance of
criteria (factor-categories and factors) in each level. Criteria in each level are compared pair-wise in terms of
their importance to a criterion in the next higher level. Starting at the top of the hierarchy and working down, a
number of preference (square) matrices are generated in the process of comparing criteria at a given level. A
generic matrix is as follows:

(1)

where rows indicate ratios of weights of each factor with respect to all other factors. The scale used for pair-wise
comparisons in AHP is called a one-to-nine scale. For a set of n factors in a matrix, (n2 − n)/2 judgments are
needed because there are 1’s on the diagonal (comparing factors with themselves) and the remaining judgments
are reciprocals (aji = 1/aij).
Step 4: The fourth and final step of AHP is the determination and synthesis of normalized weights. The
normalized weights can be determined using either the eigenvector method or the simple row average method.
The preference matrices generated in step three are translated into largest eigenvalue problems and solved to find
unique and normalized vectors of weight to factors in each level of hierarchy. When matrix A (Eq. 1) is
multiplied by the transpose of the vector of weights w, we get the resulting vector in nw,
Aw = nw, (2)
where w = (w1; w2; . . . ; wn)T and n is the number of rows or columns. Further, Eq. (2) could be rewritten as:

(A − nI)w = 0, (3)

where n is also the largest eigenvalue, λmax, or trace of matrix A and I is the identity matrix of size n. For a
further mathematical discussion of this method, see Saaty and Vargas (1982). The overall weights of the decision
alternatives are determined by aggregating the weights throughout the hierarchy. This is done by following a
path from the top of the hierarchy to each alternative at the lowest level and multiplying the weights along each
segment of the path and the best alternative is chosen for the decision purpose.

AHP offers not only a methodology to rank alternative courses of action but also provides a direct measure of
consistency of judgment elicited by the decision makers. Saaty (1977) demonstrated that λmax = n is a necessary
and sufficient condition for consistency. Inconsistency may arise when λmax deviates from n due to inconsistent
responses in pair-wise comparisons. Therefore, the matrix A should be tested for consistency using the formula:
CI = (λmax − n)/(n − 1) (4)
CR = CI/RI (5)
where CI is the consistency index, RI is random index generated for a random matrix of order n, and CR is the
inconsistency ratio. The CR refers to the degree to which decision-makers adhere to the rank order specified and
measures the extent to which an established preference is kept. A CR ≤ 0.1 is recommended as acceptable (Saaty
and Kearns, 1985). If CR > 0.1, it is suggested that the decision-makers reevaluate their judgments.
Homogeneity of factors within each group, smaller number of factors in the group, and better understanding of
the decision problem would improve the consistency index (Saaty, 1993).
Sample Firms and Respondents
A two-part questionnaire was employed for data collection. Part A contained questions (in AHP format)
designed to capture experts’ (decision-makers) opinions on the relative importance of factors, whereas, Part B
contained general questions about the company and experts’ background. First the questionnaire was designed in
English and then was translated in Mandarin by one of the authors for use in China. Before the primary study
was implemented, the questionnaire was pre-tested by two senior logistics managers (one from China, in
Shanghai region and one from Australia, state of Victoria). The readability and understandability of the
instrument was subsequently improved based on the comments and suggestions from these respondents.
24th Australasian Conference on Information Systems Challenges of RFID Application in Australia and China
4-6 Dec 2013, Melbourne Rahman et al.

The critical case sampling method was used to identify the cases for this study. Critical case sampling is a type
of purposive sampling (Neuman, 1991) that looks for cases that are ‘particularly information rich’ in relationship
to the questions under consideration (Yin, 2003). The following guidelines were used to select the sample
companies and respondents for interviews:
 companies who intent to implement RFID in their supply chains, and,
 respondents who have experience with barcode technology and have some exposure to RFID
implementation.

All respondents were assured that their answers would be kept confidential. Neither the Australian nor the
Chinese managers were familiar with the AHP data collection procedure. Therefore, the following two steps
were considered:
 respondents were explained the meaning of the integer scores of the 1-9 scale used for data collection.
 respondents were explained how these scores need to be considered while making the pairwise
comparisons between any two factors.
These two steps were critical to ascertain the accuracy of data.
Chinese Firms
Six firms in China were chosen for this study. These are large firm with employees ranging between 300 and
over 2500. Six senior managers were chosen from these companies (one from each company) who have
experiences in both bar code and RFID technologies. All six interviews were conducted face-to-face by one of
the authors using the mandarin version of the questionnaire and each interview lasted approximately 45 minutes.
All managers have working experience with both barcode and some experience with RFID technologies, hence
they were in a position to make judgments on the factors that would impact adoption of RFID. Interviewee
answers were recorded using the AHP matrix. A summary of the companies and respondents is given in Table 5.

Table 5. Chinese Firm Characteristics and Respondents’ Job Titles

Firm No. of Employee Job title of respondent

AA > 2500 Deputy General Manager

BB 300-500 Senior IT Manager

CC 1001-1500 Managing Director

DD 1001-1500 General Manager

EE 1001-1500 IT Manager

FF 501 - 1000 General manager

Table 6. Characteristics of Firms and Respondents in Australia

Firm No. of Employee Job title of respondent
XA > 500 Supply Chain Manager
XB > 500 IT Manager
XC 20 - 200 Logistics Manager
XD > 500 Distribution Manager
XE < 20 Manufacturing Manager
XF 20 - 200 Manufacturing Manager
XG > 500 E-business Manager
XH 20–200 Technical Manager
XI 20–200 Technical Manager
XJ 20–200 Business Development Manager
XK < 20 Business Development Manager
XL 20 - 200 Business Development Manager
Australian Firms
To assess the criticality of factors affecting RFID implementation in Australia twelve firms were chosen. The
size of the firms ranged from quite small, with 20 or fewer employees, to larger organisations represented by
24th Australasian Conference on Information Systems Challenges of RFID Application in Australia and China
4-6 Dec 2013, Melbourne Rahman et al.

more than 500 staff. From these firms twelve senior managers were identified to conduct face-to-face interviews
and each interview lasted approximately 45 minutes. Managers who participated in the study were assured that
all details of their organisations would remain strictly confidential, in line with ethics approval. All managers
have working experience with both barcode and some experience with RFID technologies, hence like managers
in the Chinese firms, they were also in a position to make judgments on factors that would impact
implementation of RFID. Interviewee answers were recorded using the AHP matrix. A summary of the
companies and respondents is given in Table 6.

RESULTS AND DISCUSSION

In order to determine the priority weight of each factor-category and each factor, judgment matrices, based on
managers’ interviews, were translated into the largest eigenvalue problems, and then calculated the normalized
and unique priority vectors of weights by using the Expert Choice® Software. The overall inconsistency index of
judgments was then calculated for performance measures and critical challenges. This was done taking all
responses together using geometric means of six responses for Chinese firms and twelve responses for
Australian firms.

Numerical analysis was conducted in two stages: (1) determination of weights of each higher level factor-
category; (2) determination of weights of each factor under each higher level factor-category. Hence, the
outcome of the first stage would identify the degree of importance for each factor-category as a percentage of
total importance over all measures in RFID implementation considered. Based on the outcome of this evaluation,
factors contributing to each higher level factor category in RFID implementation could be prioritised, so that
firms adopting RFID can choose the appropriate levels of those factors in their implementation projects.

Figure 2 shows that the main factor-category in adopting RFID in China is related to organizational challenges,
with an overall weight of 0.292. The second most important factor-category is economic (weight = 0.276), the
third is external environment (weight = 0.221), and the forth is technological factor (weight = 0.210). However,
the range of weights is narrow, suggesting that each factor-category contributes significantly to the
implementation of RFID.

0.4465
Technological
0.1

0.0394
External Environment
0.221

0.4274
Economic
0.276

0.0896
Organisational
0.292

0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5
Australia China

Figure 2: Weight priorities of factor-categories

(For Chinese managers inconsistency = 0.00085; for Australian managers inconsistency = 0.050)

The main factor-category in adopting RFID in Australia is the technological factor, with an overall weight of
0.4465. The second most important factor-category is economic (weight=0.4274), the third is organisationl
(weight = 0.0896), and the fourth is external environment (weight = 0.0394).

From Figure 2 it is clear that managers in Chinese firms have a very different view concerning importance of
factors for RFID implementation. Australians firms view technological factor-category as the most important
priority, whereas Chinese firms view it as the least important category. Again, Australian firms view
organizational factor-category as one of the least important priorities in terms of RFID implementation, whereas
Chinese view it by far the most important. With respect to external environment category, there was no
agreement – opinions varied widely. For Chinese managers this category of factor is quite important, whereas
Australian managers view it as the least important priority. However, with respect to economic factor-category,
views were generally in agreement, although levels of importance differed significantly.
24th Australasian Conference on Information Systems Challenges of RFID Application in Australia and China
4-6 Dec 2013, Melbourne Rahman et al.

In the second stage of evaluation, weight priorities of RFID implementation factors on respective higher level
factor-category and overall importance were considered. Figure 3 displays that the top five important factors in
adopting RFID in Chinese firms are Top management support (weight = 0.141), Hardware & software cost
(weight = 0.133), Tag cost (weight = 0.127), Industry force (weight = 0.107), Compatibility (weight = 0.101)
and Implementation cost (0.068). The least three important factors found in the analysis are Firm size (weight =
0.030), Complexity (weight = 0.031), and Data volume (weight = 0.037).

Firm size 0.030

Complexity 0.031
Data volume 0.037
IT readiness 0.043
Privacy 0.052
Security 0.063
Standards 0.066
Implemtation cost 0.068
Compatibility 0.101
Industry force 0.107
Tag cost 0.127
Hard/software cost 0.133
Top management support 0.141

0.000 0.020 0.040 0.060 0.080 0.100 0.120 0.140 0.160

China

Figure 3: Weight priorities of RFID implementation factors in Chinese firms

(Inconsistency = 0.000)

Privacy 0.009
Firm size 0.009
Top management support 0.034
Hard/software cost 0.038
Industry force 0.039
Data volume 0.044
IT readiness 0.054
Security 0.072
Complexity 0.077
Compatibility 0.094
Implemtation cost 0.103
Tag cost 0.210
Standards 0.218

0.000 0.050 0.100 0.150 0.200 0.250

Australia

Figure 4: Weight priorities of RFID implementation factors in Australian firms

(Inconsistency = 0.010)

For Australian firms the top six important factors are Standards (weight = 0.218), Tag cost (weight = 0.210),
Implementation cost (weight = 0.103), Compatibility (weight =0.0.094), complexity (weight =0.0.077) and
Security (weight = 0.072). Out of top six factors, three factors such as Tag cost, implementation cost and
compatibility are common for firms from both countries.

Figure 5 encapsulates the differences (or similarity) in factor priorities as perceived by Chinese and Australian
24th Australasian Conference on Information Systems Challenges of RFID Application in Australia and China
4-6 Dec 2013, Melbourne Rahman et al.

managers. It indicates that the managers are in agreement on five out of thirteen factors. These are compatibility,
data volume, Firm size, IT readiness and security. These are also relatively low priority challenges for managers
in both countries. Australian managers view standards as the top factor whereas Chinese managers view top
management support as the most important factor. Concerning industry force, there is no agreement – opinions
varied widely. The results provide insights to critical factors for RFID implementation in Chinese and Australian
supply chains. The firms in Australia and China who would plan to implement RFID in their supply chains must
take into account the relative importance of these enabling factors.

0.25

0.2

0.15

0.1
Australia
0.05 China

Figure 5: Comparison of weight priorities of RFID implementation factors in Chinese and Australian firms

CONCLUSIONS
RFID technology has emerged as one of the most significant process innovations in supply chain contexts. RFID
promises to increase visibility in supply chains, to reduce labour and inventory costs and to improve supply
chain coordination and product availability. However, literature has not yet comprehensively addressed the issue
of successful implementation of RFID. The objective of this study was to compare RFID implementation factors
between Australian and Chinese firms. Results demonstrate that managers in Chinese firms have a very different
view concerning importance of factors for RFID implementation as compared to Australian managers.
Australians firms view technological factor-category as the most important priority, whereas Chinese firms view
it as the least important category. Again, Australian firms view organizational factor-category as one of the least
important priorities, whereas Chinese view it by far the most important. However, with respect to economic
factor-category, views were generally in agreement, although levels of importance differed significantly. It also
demonstrates that indicates that the managers are in agreement on five out of thirteen factors. These are
compatibility, data volume, Firm size, IT readiness and security. These are also relatively low priority factors for
managers in both countries. Concerning industry force, there is no agreement – opinions varied widely. The
firms in Australia and China who would plan to implement RFID in their supply chains must take into account
the relative importance of these enabling factors. Although the use of limited number of firms is adequate given
the methodology employed, it is recommended to conduct empirical study using a large sample data set in the
future.

REFERENCES
Alomaur, B., and Poovendran, R. 2010. “Privacy Versus Scalability in Radio Frequency Identification Systems”,
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Angeles, R. 2005. “RFID Technologies: Supply Chain Applications and Implementation Issues”, Information
Systems Management (22:1), pp 51 - 65.
Asif, Z., and Mandviwalla, M. 2004. “Integrating the Supply Chain with RFID: A Technical and Business
Analysis”, http://ebi.temple.edu/programs/RFID/default.htm. The Fox School of Business and
Management.Temple University.
Attaran, M. (2007). “RFID: an enabler of supply chain operations”, Supply Chain Management (12:4), pp 249-
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Backhouse, J. 2002. “Assessing Certification Authorities: Guarding the Guardians of Secure E-commerce”?
Journal of Financial Crime (9:3), 217-226.
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