Abstract
The application of RFID technology in supply chain management is well known and several
authors and companies have argued that RFID technology can greatly improve supply chain
visibility, inventory management and reduce some of the key inventory management costs.
RFID technology is also known to the mining industry as many mining companies have
applied RFID technology to manage the productivity and safety of employees and vehicles on
mine sites. However, an extensive literature search yielded no proof that RFID technology
has been deployed as an inventory management tool in the mining industry, both globally and
in South Africa.
Substantial amounts of working capital are tied up in the supply chains of gold producers in
South Africa, specifically in equipment spare parts and process materials inventories. The
high levels of inventory on hand are often associated with efforts to ensure production
continuity. However, inventory on hand is a double edged-sword; high inventory on hand
will be great for production continuity, but will negatively influence the gold producers’
balance sheets. On the other hand, low inventory on hand will improve the gold producers’
balance sheets, but will negatively impact the gold producers’ ability to ensure production
continuity. This study set out to determine what benefits RFID technology could offer the
three South African gold producers that participated in this study, if the technology was
deployed as an inventory management tool at their central warehouses.
An exploratory study with interpretivism as philosophical paradigm was undertaken to obtain
an in-depth understanding of the inventory management practices at three of the four major
gold production companies in South Africa. This was achieved by conducting semi-structured
interviews with employees working in the inventory management function of the three
participating gold producers. A literature review was undertaken to identify the quantified
benefits that companies in other industries achieved as a result of implementing RFID
technology as a tool to manage their inventory management programmes. The identified
quantified benefits were used to determine the potential benefits the three participating gold
producers could achieve if the deployed RFID technology as an inventory management tool.
A cost and benefit comparison was included in this study to illustrate the potential financial...
M.Com. (Business Management)