Impact of Adoption on Sustainable Supply Chain Practices Through RFID Technology for Inventory Optimization in Manufacturing Firm Joenaidy Bin Nazrien Ng1, Nurshamimah Samsuddin2
Faculty of Technology Management and Technoprenuership, Universiti Teknikal Malaysia Melaka1,2
Abstract
Abstract. In the era of Industry 4.0, Radio-Frequency Identification (RFID) technology is increasingly recognized as a catalyst for sustainable and efficient manufacturing supply chains. This study examines the impact of RFID adoption on sustainable supply chain practices (SSCP), focusing on inventory optimization among Malaysian manufacturing firms. Guided by the Dynamic Capabilities Theory and the Technology Acceptance Model (TAM), data were collected through surveys from 200 medium and large firms across the Chemicals, Electrical & Electronics, and Machinery sectors. Using multiple regression analysis, findings reveal that RFID adoption enhances inventory accuracy, reduces waste-achieving up to a 70% reduction in tool losses-and drives sustainability performance across economic, environmental, and social dimensions. The results further indicate that operational efficiency and supply chain visibility act as significant mediators, reinforcing the value of RFID in strengthening real-time decision-making and process optimization. However, barriers such as high implementation costs, technical complexity, and organizational resistance remain critical challenges, particularly for SMEs. The study underscores the synergistic potential of integrating RFID with other Industry 4.0 technologies such as Artificial Intelligence (AI) and the Internet of Things (IoT) to accelerate sustainable manufacturing. Practical and theoretical insights are offered for managers, policymakers, and academics in advancing digital transformation within emerging economies.
