Improving inventory effectiveness in RFID-enabled global supply chain with Grey forecasting model

A RFID-enabled global TFT–LCD supply chain associated with Grey forecasting model (GM) of Company A has been simulated and analyzed in this research. Three key performance indicates (KPI) including total inventory cost, inventory turnover and bullwhip effect are analyzed in the simulation experiments in order to compare the effectiveness of five different supply chain inventory models. The effectiveness of integrated system which is composed of supply chain operation, Grey short-term forecasting model and RFID system has been examined by aforementioned three KPIs. According to the result of Taguchi experiments, RFID-enabled R-SCIGM supply chain model which integrates the GM(1,1) forecasting model based on (s, Q) pull-based replenishment policy reduces 43.36% of the total inventory cost compared with that of the non-RFID SCIGM model. It apparently shows that a great improving effectiveness of supply chain inventory cost can be conducted while RFID system is incorporated with the GM(1,1) forecasting model.

► We construct a RFID-enabled TFT–LCD global supply chain simulation model.
► Grey forecasting lowers backorders in RFID-enabled global supply chain.
► The pull-based (s, Q) replenishment improves RFID-enabled global supply chain.
► The total inventory cost is reduced in GM-based RFID-enabled global supply chain.
► Adopting RFID in global supply chain can weaken the bullwhip effect.