Calculating the AIDC return on investment (ROI) within the small to medium size enterprise

Automatic Identification and Data Collection (AIDC) technologies have been used extensively to reduce non-value adding activities across the supply chain. Radio Frequency Identification (RFID) is an AIDC technology that promises to revolutionize the global supply chain by enabling products to automatically identify their movement and location. Large organizations in the US and Europe have been piloting the technology, as the potential cost savings through this increased visibility are high. However, the required investment on the technology can be expensive and of high risk. This may be particularly true for Small Medium Enterprises (SMEs) with limited financial resource available for research and development. This paper presents a methodology for assessing the value and calculating the ROI of AIDC within SMEs based on process improvement and elimination of non-value adding activities. Although the applicability of the methodology was assessed within a UK manufacturing SME, it is anticipated that the results of this case study may be used by potential adopters wishing to assess the value of AIDC technologies in their operations.