This report is the result of an investigation of the possibility to use RFID-technology in a producing company. The investigation is focused on a flow between the company’s producing subsidiary company in Lithuania and its main facility in Sweden.

RFID is the abbreviation for radiofrequency identification. The RFID-technology forms the base of a system with wireless information transmission between an object to which a transponder, also called tag, has been attached and a reader. The information is transmitted by radio waves and the system is equipped with software that can digitalise the radio waves. The information is thereby converted into useful input to, for example, the company’s business system. RFID makes it possible to decrease the human interaction necessary and does not demand free line of sight in contrast to barcode systems.

The objective of this final thesis is to:

·         give suggestions of how RFID can be applied in the flow of pallets between the Lithuanian subsidiary company and the main facility in Sweden

·         investigate if the adoption is practicable and what consequences will follow the suggested appliance

·         present profitability calculations

·         investigate what future opportunities the technology offers the company

The scope of my work is to be able to present a report to the company that gives them a good insight in the RFID-technology and to give suggestions on how to use it in their operations. The report shall be useable as a decision basis for the company when deciding weather it is interesting for them to continue the investigation or not.

The result of the investigation is a description of the flow which forms the basis of the two suggested alternatives of application of RFID-technology. The first alternative consists of a system of active tags which is attached to the pallets directly after the goods are produced. The second alternative is a system based on the use of passive tags in the form of self adhesive labels. Both alternatives induce a division of the flow into five zones between which a reading of the tags takes place and the pallets are thereby identified automatically.

The system of active tags results in an initial investment of SEK 1 256 000 and the system of passive tags, SEK 227 000. Both alternatives make a SEK 648 000 saving in cost possible, mainly consisting of decreasing need of working effort in identifying pallets and manual reporting to the business system.

An analysis of the suggestions shows that the pay-back time for the alternative with active tags may be too long depending on the company’s intentions of future expansion of the system. The investment can be proven justifiable after a more thorough investigation. Concerning the system of passive tags, the analysis shows that the alternative is practicable and gives a great chance of fast profitability and also further profitability over time.

The investigation is based on a theoretic study of RFID, Supply Chain Management and process analysis. A survey of the process has resulted in a flow chart and this has formed the basis of the work resulting in the two suggested applications. These have then been evaluated from a profitability and practicability perspective.