RFID and real time localization systems for warehouse management: A model for technical and economic evaluation

Abstract

In this paper, we develop a detailed evaluation model intended to compare three technical solutions as regards their suitability of implementation for warehouse management. The technical solutions examined are radio frequency identification (RFID) and two proprietary real time location systems (RTLS), recently developed for warehouse management. The comparison is performed grounding on both the economic and technical perspectives. Specifically, from the technical point of view, we describe how the typical warehouse processes should be reengineered to implement each of the technical solutions mentioned, as well as how each solution impacts on those processes. From the economic perspective, the model allows assessing the costs and benefits resulting from the application of the three solutions, as well as the profitability of the related investment. A case study, referring to the production warehouse of a manufacturing company, is presented to test the model and to provide a direct comparisons of the three technologies within a reference scenario. The application of the model developed and the results generated can provide useful guidelines for warehouse managers when pondering the implementation of RFID or RTLS technologies for warehouse management.