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Received December 08, 2008 / Accepted April 6, 2009 J. Technol. Manag. Innov. 2009, Volume 4, Issue 1
ISSN: 0718-2724. (http://www.jotmi.org)
JOURNAL OF TECHNOLOGY MANAGEMENT & INNOVATION © JOTMI Research Group
Determinants of RFID Adoption in Supply Chain among
Manufacturing Companies in China: A Discriminant Analysis
Liu Wen, Suhaiza Zailani, Yudi Fernando *
Abstract
The growth ofChina’s economy hinges to a large extent on the ability of the industry to operate more efficiently and effectively
in the global supply chain system. China’s manufacturing companies should pay attention to adopt more efficient supply chain technologies
to provide better services for their customers. China has initially carried out research and development and industrialization
of technologyrelated to RFID and begun to apply in some areas in recent years. This article studies the determinant
factors of the RFID adoption by manufacturing companies in China. The population of this study is manufacturing companies in
China that are registered under Federation of China Manufacturers. A questionnaire survey is conducted to study the adoption
of RFID by China’s manufacturing industry. Thisstudy reveals that the environment, organization, technology and product have
the impact on the adoption of RFID in China. Organization should be given strategic attention to improve employee participation
in adopting RFID as a strategic tool..
Keywords: Technology, RFID Adoption, Supply Chain, China.
* School Of Management, Universiti Sains Malaysia. 11800 Penang, Malaysia.
Tel: (604)6577888 ext 3952. Fax: (604) 6577448. E-mail: shmz@usm.my
ISSN: 0718-2724. (http://www.jotmi.org)
JOURNAL OF TECHNOLOGY MANAGEMENT & INNOVATION © JOTMI Research Group 23
1. Introduction
In order to satisfy the diversifying requirements of customers,
many manufacturing companies improve their service efficiency
by continuous adoption of information or automation technologies
(Mason-Jones & Towill,1999; Sauvage, 2003). Many
studies have found that innovation is the most important tool
for enterprises to keep their competitive advantage (Kimberly
& Evanisko, 1981; Damanpour & Evan, 1984). The survival of an
enterprise in the age of knowledge-based economy depends
on how to improve their organizational innovation capability.
Technological innovation is the key variable and the means ofdifferentiation between companies (Sauvage, 2003). Nixon
(2001) suggests that manufacturing companies should employ
new information technologies to raise their service capability in
the e-commerce age. Speakman (2002) proposes that companies
could increase their performance by employing new technologies.
Chapman, Soosay and Kandampully (2003) suggest
that the industry should pay moreattention to innovation in
supply chain, and the innovation in supply chain can be implemented
through technology, knowledge and relationship networks.
Adopting new technologies might enable companies in
China to enhance their service abilities.
More than two decades of economic reform and transition to
market economy has brought China unprecedented economic
growth. With the fast growth inChina’s economy and China’s
accession to World Trade Organization (WTO), the demand
for manufacturing companies has been growing significantly in
China, and the manufacturing industry in China is set to take off.
A study by Fusion Consulting (2004) has revealed that Radio
Frequency Identification (RFID) technology has had a huge impact
on the manufacturing sector particularly in the area ofdistribution
and retail globally. The RFID technology is a type of
non-con-contact automatic identification technology, which can
substantially improve the management and operation efficiency
when used in industries of logistics, manufacture and public information
service. The development of RFID technology and
application, which is a sophisticated systematic work, influences
many areas such...