In this study, we examine the fundamental components of RFID technology in a comprehensive supply chain strategy that directly support the effectiveness and efficiency of supply chain management. We examine the appropriate business processes affected by the RFID technology, the required planning and examination for successful implementation, and many potential impacts on effectiveness and efficiency of supply chain management. We emphasize on business valúes and strategic advantages of RFID technology as well as the challenges and recommendations in adoption of the technology particularly when a company extends its supply chain to upstream suppliers and downstream customers, as their external integration needs to gain in capacity planning and in efficiency. Using four major supply chain processes, we highlight economic opportunities and challenges when planning and implementing RFID technology within an existing supply chain framework. We will focus on the capabilities of RFID in providing security, privacy, and integrity of supply chain processes while facilitating sharing information with upstream suppliers and downstream customers, developing alliances, establishing strategic alliances, and gaining competitive advantages.