May Tajima

The importance of managing risks has been well recognized in the recent supply chain literature. One of the risks, disruption of supply chains, can occur suddenly and unexpectedly due to a crisis event. What could be more unexpected is the spread and severity of the impact of the disruption. For example, the September 11 terrorist attacks of 2001 in New York and Washington, D.C. disrupted Ford Motor’s parts supply chain. The disruption eventually forced not one but five of Ford’s assembly plants to cease production over a week. The significance of this ripple effect of a crisis on supply chains has been discussed by various researchers. Another area of active research in supply chain management is Radio Frequency Identification (RFID) technology. Its applications in a wide range of industries have been discussed in the literature: retail, apparel, healthcare, records management, and more. Discussion of RFID in risk management, however, has been limited to security and privacy issues. This paper therefore examines the use of RFID in supply chain risk management in order to contribute to both supply chain and RFID literatures. The paper reviews RFID technology, supply risks, and a crisis management process. Then, based on capabilities of the technology, the paper identifies three areas in which RFID could improve the management of supply chain disruptions: (i) monitoring and tracking of warning signs of a crisis, (ii) faster detection of and response to the crisis, and (iii) effective use of supply chain information for analyzing corrective actions. Each of these areas is discussed with a focus on managing supply disruptions especially to reduce the harmful ripple effect of a crisis on supply chains. Ultimately, the discussion of RFID leads to a preliminary theoretical model of how different uses of RFID may lead to different risk management capabilities.