Measuring the impact of radio frequency identification (RFID) technologies in improving the efficiency of the textile supply chain

The value of radio frequency identification (RFID) technology is critical for the clothing and textiles supply chain, because the fashion business is characterized by a wide assortment of seasonal items with short life-cycles, high levels of impulse-purchasing and complicated distribution and logistics operations. This study aims to test whether the adoption of the RFID system can improve supply chain performance (measured as inventory days, accounts receivable days and operating cycle). Based on the 31 clothing and textiles companies that publicly announced their RFID adoption, 18 of them were matched with comparable control firms for the testing of abnormal supply chain performance. The results show that clothing and textiles RFID adopters' inventory days drop by about 12.89. days over the 5-year period, while other RFID adopters (other manufacturing sectors) only drop by about 2.47. days.