RFID for air cargo operations: Return on investment analysis through process modeling and simulation

In the airline industry, radio frequency identification (RFID) can enhance profitability of cargo operations by improving asset utilization and reducing system inefficiencies. However, the adoption of such technology is hindered by costs of infrastructure, hardware and software development, and integration. In order to analyze the return on investment (ROI) from an RFID solution, this paper describes an approach to predict process improvement from the RFID implementation using discrete event simulation. The simulation measures improvements in decreasing processing times and required resources through a comparison analysis of the “as-is” system and the “to-be” RFID enabled system. The metrics are then used as inputs to the ROI calculation. A complete ROI analysis for RFID feasibility in the studied air cargo terminal is also presented.