The material handling trade-off when lot splitting with RFID in a job shop

Lot splitting is the practice of splitting a production order into smaller sub-lots that are free to move independently through the manufacturing process. Traceability issues and increased material handling may discourage high levels of lot splitting and thus limit improved flow times and tardiness that are associated with increased lot splitting. In order to enable the shop floor control necessary for high levels of lot splitting, radio frequency identification (RFID) can be used to improve material tracking. This is the first paper to quantitatively analyse the trade-off between improved flow and tardiness metrics versus the undesirable increase in material handling when lot splitting in a job shop. Flexible automated material handling equipment may be necessary with some operating conditions and policies because of a dramatic increase in material movements between work centres. This is also the first paper to quantitatively study the impact of imperfect RFID read reliability on the shop floor. The findings are analysed in the theoretical context of the complementary relationships between mix flexibility, material handling flexibility, and lot splitting enabled by RFID. Those relationships have important managerial implications about the fit of RFID technology with operating policies, conditions, and capabilities.