Proposing a Value-Added Indicators framework for the apparel and fashion sector: Design and empirical evaluation

Objective: Automatic identification technologies have become omnipresent in the retail industry. The introduction of Radio Frequency Identification (RFID) in the fashion and apparel industry has led to massive data sets which are currently an untapped source for decision makers. We therefore aim to leverage the economic potential of RFID by proposing a framework for novel RFID-enabled indicators. We use the term Value-Added Indicators (VAIs), instead of the common acronym KPIs (Key Performance Indicators), because the proposed metrics aim to add additional value to the existing management reporting with regard to the fashion and apparel supply chain. Design, Methodology, Approach: We combine two sources of knowledge in order to build a comprehensive framework. We (i) use the theoretical background from a review of the relevant literature and (ii) use the experience from an RFID-system integrator and two fashion companies that have already deployed RFID on a large scale. The framework is then validated in several iterations by academics and practitioners. Findings: The study has produced a set of 60 different VAIs that use, or might use, RFID technology to produce, monitor and increase the overall value of the fashion and apparel supply chain. These VAIs are organised in a structured framework, built and validated by more than 10 experts from the field. The framework was then further validated by 24 experts, comprehending managers and researchers from outside the borders of the EU-Project SERAMIS. Practical Implications: Practitioners from the fashion and apparel industry benefit from our research by having available a validated framework with a set of 60 different VAIs that can be readily implemented into their own management reporting. The framework can thus serve as the foundation for building up an RFID-based measurement system or as a guideline for extending an existing measurement system. Originality/Value: We are the first who structure RFID-related performance indicators in a validated framework. Our framework can serve as a foundation for further research that goes beyond the fashion and apparel retail industry. We encourage researcher to build upon our research and to transfer it to different industries.