Assessing the impact of RFID and sensor technologies on the returns management of time‐sensitive products

The purpose of this paper is to assess the value of radio‐frequency identification (RFID) and sensor technologies to reverse logistics processes. The research is motivated by the question of to what extent the accuracy of information on product quality delivered by such technologies impacts the total recovered value that companies obtain from returned goods in an industry with time‐sensitive products.

The paper first presents a case study to examine the returns management process at a manufacturer of high‐tech consumer electronics. It then develops an analytical model to study the monetary benefits in a scenario with RFID‐enabled product disposition.

The results show that RFID allows for a redesign of the return process that performs more efficiently regarding the total recovered value depending on technology costs (i.e. tag costs) and capabilities (i.e. sufficient sensor‐delivered parameters to rightly infer product quality). Second, the results indicate that maximum benefits can be drawn with lower accuracy but early decision on the disposition option.

This paper compares traditional and RFID‐enabled returns management processes. It provides a model to quantitatively investigate whether RFID and sensor implementation is a feasible and economically viable approach.