RFID Technology: Everything you need to know about RFID Tags for Inventory Management

RFID Technology: Everything you need to know about RFID Tags for Inventory Management


What is RFID technology?

Radio Frequency Identification (RFID) technology is a wireless communication system that uses electromagnetic fields to identify and track objects. RFID technology is used in inventory management to track and manage assets efficiently, accurately, and securely. RFID systems consist of two main parts: tags and readers. The tag stores a unique identifier and communicates data to the reader using radio waves. The reader has one or more antennas that send and receive signals back from the RFID tags. 

An RFID inventory system provides real-time access to inventory levels, stocktaking capabilities, and order/purchase summaries, which streamlines and simplifies the inventory process by eliminating manual counts. RFID technology’s automated feature allows for scanning of multiple items at once, saving time and increasing accuracy.

What are the benefits of using RFID technology for inventory management?

1. Increased visibility of assets for better tracking and management

RFID technology provides real-time location and accurate tracking of assets. Businesses use RFID tags to track inventory levels and locations, allowing them to manage their assets more efficiently. Unlike other methods such as barcodes, RFID technology enables precise location identification. 

This results in increased efficiency, cost-effectiveness, and loss reduction. RFID tags allow for instant scanning and identification of all tagged objects and people, saving time and reducing labor costs. They also provide accurate data, reducing errors and improving inventory accuracy. 

2. Increased efficiency and speed of inventory management processes

RFID technology can significantly increase efficiency and speed in inventory management processes. By using radio frequency identification, RFID enables remote communication of inventory information with up to 99% accuracy, reducing manual labor and automating inventory control. RFID technology allows for the scanning of inventory in bulk, rather than individually scanning each item. 

3. Reduced human error in data entry and inventory counts

RFID technology reduces human error in data entry and inventory counts by automating the process of collecting inventory data. Traditional inventory tracking methods and manual inventory checks require line-of-sight scans, which can be time-consuming and prone to human error. RFID technology allows for near-instant, accurate counting without the manual scanning. This saves time and reduces labor costs, which are often the largest expenses at distribution centers and other facilities. 

4. Increased accuracy of inventory counts

RFID technology can significantly increase the accuracy of inventory counts as compared to traditional methods. With RFID asset tracking software, scanners bearing antennae serialize and count each item, eliminating the need for manual labor and the errors that come with manual processes. This wireless technology can transmit through some walls, and products do not need to be removed from boxes to verify physical counts. Implementing an RFID inventory system has been shown to improve inventory accuracy by up to 30% compared to traditional inventory tracking methods.

5. Ability to track individual items within a larger group

RFID technology enables businesses to track individual items within a larger group for inventory management. By tagging items with RFID labels and strategically placing RFID readers throughout a facility, the movement of goods can be collected and inventory levels tracked in real-time. This allows for automated cycle counts and physical inventory counts, reducing painful and infrequent audits. 

6. Reduced costs associated with traditional inventory systems

Investing in an RFID inventory system can reduce costs associated with traditional inventory systems. It offers enhanced visibility by providing an overview of the supply chain, identifying variances quickly and rectifying operational errors with simplified data collection. 

RFID technology expedites processes like shipment verification, inventory tracking, counting, and check-ins, resulting in reduced manual labor and associated costs. Finally, RFID enables near instant and accurate counting without the need for line-of-sight scans other technologies require. This means reduced labor costs, often the biggest expense at distribution centers. 

7. Increased asset security with RFID theft protection

RFID technology can prevent theft by tracking the movement of inventory items and alerting staff when an item leaves a designated area without authorization. This identifies potential theft or unauthorized access and takes action to prevent it.

8. Increased flexibility in tagging options and technologies

RFID technology offers increased flexibility in inventory management by providing a range of RFID tags operating on different frequencies and customized to work with most inventory software solutions. This allows for instantaneous physical inventory updates, constantly providing accurate inventory numbers as inventory moves throughout the facility. RFID technology is also more efficient and accurate than traditional methods, allowing for the instant scanning and identification of all tagged objects and people.

9. Increased business intelligence and analytics capabilities

RFID technology enhances business intelligence and analytics capabilities in inventory management by providing real-time visibility of inventory levels and movements. RFID tags attached to products can be read by RFID readers, which transmit data to inventory management systems. This enables businesses to increase inventory accuracy, reduce manual counting efforts, and determine variances quickly. 

10. Improved compliance with industry standards and regulations

Using RFID technology for inventory management can assist in compliance with industry standards and regulations by improving inventory accuracy, reducing manual counting efforts, and highlighting operational errors through simplified data collection. Additionally, this technology can help businesses determine variances quickly and rectify them, which is important for maintaining compliance. For example, RFID tagging compliance is required by the Department of Defense (DoD) for certain products as well as Walmart and Target for many retails products.

What are the components of RFID inventory tracking?

1. RFID Tag

RFID tags are wireless devices that consist of a microchip and a small antenna. These tags often attach to or are embedded in products or packaging to store digital information about the item. RFID readers, with sending and receiving antennae, communicate with the RFID tag to collect data. The reader then sends this information to a computer software system, which processes the data to track inventory in real-time. 

The advantages of using RFID tags for inventory management include the ability to read tags remotely, read multiple tags at once, and track individual products with unique identification codes. RFID tagging can be used for stock control, stock security, and quality control. The costs of using RFID tagging have decreased in recent years, making it an attractive option for retailers, wholesalers, distributors, and manufacturers.

2. RFID Reader

RFID Reader is either a portable device or “fixed reader” that uses a radio-frequency signal generator to generate radio waves and transmit signals to activate and detect information from RFID tags. It has or attached to one or more antennae that send and receive signals back from RFID tags. The reader is controlled by a microcontroller and is mainly of two types: fixed readers and mobile readers. 

3. Passive Tags

Passive RFID tags are used for inventory tracking and are powered by the reader’s electromagnetic energy. They are economical in supply chain management for access control and file tracking. Passive tags come in two forms: hard tags and inlays. The inlay is the part of the tag that encodes the data, and it has an antenna attached to it. 

The reader, also known as an interrogator, sends an electromagnetic signal to the antenna, which powers the inlay and allows it to transmit data back to the reader. The two types of antennas used with passive RFID tags are near-field antennas that have a short read range of a few inches, and far-field antennas that have a longer read range of up to 300 feet with 10-30 feet being the standard application. 

The UHF 915 MHz FR4 High Temperature RFID Tags are designed to be applied to assets, servers, pallets, or attachment to rigid items and are adept in surviving high temperature RFID applications. These tags have a low profile and are made of a PCB/FR4 material. They are used for inventory tracking and are capable of surviving in harsh environments. They are also designed to withstand high temperatures of up to 200°C. 

The tags are equipped with a UHF 915 MHz transponder that provides a read range of up to 7 meters. The FR4 tags can be mounted on metal surfaces and are available in a variety of sizes. These tags are ideal for use in logistics and inventory management. They are also suitable for tracking boxes, cartons, and pallets. In addition, they can be used for security purposes. The UHF 915 MHz FR4 High Temperature RFID Tags are reliable and durable, making them a popular choice for inventory tracking.

4. Mobile app

Mobile apps are increasingly used in RFID inventory tracking to enhance the efficiency and accuracy of inventory management. The apps assist in real-time inventory tracking, which enables businesses to keep inventory counts accurate and up-to-date. 

This is crucial for BOPIS (Buy Online Pickup In-Store) orders and on-demand deliveries, ensuring that the correct items are available for customers. Also, mobile apps provide staff with easy access to inventory data, making it easier to locate items for restocking.

What different types of RFID tags are there and what are the benefits of each of them?

1. Passive Tag

Passive RFID tags, also known as Rain RFID tags, are integrated circuits that do not have their own power source. Instead, they rely on electromagnetic energy from the RFID reader to operate. Passive tags are cost-effective and can be embedded into an adhesive label or into the object itself, making them perfect for situations where they won’t be reused. 

Passive tags are small, lightweight, and have a long shelf life of 20+ years. They can be used to scan at a distance from a few inches to a few feet and operate at low frequency (LF RFID) 125 MHz to134 kHz, high frequency (HF RFID) 13.56 MHz, and ultra-high frequency (UHF RFID) 856 MHz to 960 MHz. 

Passive RFID tags are effective in supply chain management for access control and file tracking. For example, when a supplier attaches passive tags to a case of products, it is easier to track inventory accuracy and visibility. 

2. Active Tag

Active RFID tags have an internal power source and are capable of transmitting signals over longer distances than passive tags. They consist of three main components: an interrogator, an antenna, and a tag. The interrogator sends a signal to the tag that responds with unique identifying information. Active tags are ideal for inventory management because they provide more accurate and reliable data than passive tags. They also have longer read ranges, which makes them suitable for large warehouses or outdoor environments. 

However, active tags can be more expensive than passive tags and have a short battery life, typically one to three years. Despite these drawbacks, active RFID tags are the best choice for inventory management in situations where longer read ranges and more accurate data are required.


3. High Frequency (HF) Tag

High Frequency (HF) RFID tags are designed to read and write to transponders fitted to HellermannTyton RFID cable ties and accessories. They offer a read range of up to 1 foot and a data transfer rate of up to 424 kbps. There are passive and active HF RFID tags. Passive HF tags do not have an internal power source and rely on the energy emitted by the reader to power the tag. Active HF tags, on the other hand, have their own power source and can transmit data over longer distances.

HF tags are commonly used in inventory management for item-level tracking. They improve inventory accuracy by allowing for real-time monitoring of stock levels and reducing the risk of errors that can occur with manual tracking methods. Additionally, HF tags can automate the check-in and check-out process of items, reducing the time and labor required for inventory management.

4. Low Frequency (LF) Tag

Low Frequency (LF) RFID tags operate at a frequency of 125 kHz and are commonly used in logistics and inventory management. LF tags are ideal for applications that require close-range reading and have a read range of less than 10 cm. These tags are often used in the tree identification, box, carton, pallet tracking, and security industries. LF tags are preferred in harsh environments because they operate in extreme temperatures and resist interference from metal and liquids. 

For instance, LF Tank RFID Tags are designed for curved surfaces and apply to gas cylinders. In the automotive industry, LH tags can track vehicles on the production line and to monitor the movement of goods in warehouses.


5. UHF Tag

UHF RFID tags, also known as RAIN RFID tags, are radio frequency identification tags that operate in the ultra-high frequency range of 860-960 MHz. These tags are used for automatic identification and tracking of objects in retail, manufacturing, logistics, and warehousing. UHF RFID tags offer long read range, high accuracy, and fast data transfer rates.

In inventory management, UHF RFID tags track and manage inventory levels. They attach to items, pallets, or containers, and are read by RFID readers to collect data on the location, movement, and status of inventory items. UHF RFID tags are particularly useful in industries that deal with high volumes of inventory, such as retail and manufacturing.

For example, in retail, UHF RFID tags track inventory levels and prevent stockouts. In manufacturing, UHF RFID tags track the movement of raw materials and finished products, and ensure that the right materials are used for production. In logistics, UHF RFID tags track the movement of goods across the supply chain, and ensure that they are delivered to the right location at the right time.

6. NFC Tag

NFC (near-field communication) is a type of RFID technology that allows for two-way communication between devices. Unlike traditional RFID tags, which only allow for one-way communication, NFC tags can both send and receive data. NFC is commonly used for short-range communication, with both devices within inches of each other. 

In inventory management, NFC tags are often used for card emulation with contactless payment methods like Apple Pay. Engineers can also use NFC technology to communicate with RFID cable ties on valuable equipment, allowing for easy tracking and inventory management.


7. WiFi Tag

The WiFi Tag is a type of RFID tag that uses WiFi technology, making it ideal for inventory management in industries where WiFi connectivity is already established. Compared to other types of RFID tags, the WiFi Tag has a longer range, allowing it to transmit data over a greater distance. Additionally, the WiFi Tag transmits data in real-time, providing up-to-date information on inventory levels. 

Industries that commonly use the WiFi Tag for inventory management include retail, healthcare, and manufacturing. In retail, the WiFi Tag tracks inventory levels and ensures that products are always in stock. In healthcare, the WiFi Tag tracks medical equipment and ensures that it is always available when needed. In manufacturing, the WiFi Tag tracks raw materials and finished products, ensuring that inventory levels are always optimized.

8. iBeacon

iBeacon technology is a Bluetooth Low Energy (BLE) wireless protocol that provides precise location-based information and proximity tracking. When BLE is used with RFID tags, iBeacon technology enhances the functionality of RFID tags by providing more accurate and real-time location data. This can be particularly useful in industries such as retail, where inventory management is critical. 

For example, a retailer can use iBeacon-enabled RFID tags to track the movement of products in a store and provide customers with personalized recommendations based on their location. Another example is in healthcare, where iBeacon technology can track the location of medical equipment or patients in a hospital.

iBeacon-enabled tags provide more precise location data than RFID tags alone, with accuracy up to a few centimeters. iBeacon technology can also work in areas with poor GPS signal, making it ideal for indoor tracking. However, a potential drawback of using iBeacon technology is that it requires additional hardware and software to be installed, which can increase costs and complexity.


9. QR Codes

QR codes are two-dimensional (2D) codes that can hold more data than traditional barcodes. They can be found on clothing tags, restaurant menus, and other products. Unlike RFID tags, QR codes are visual and can be scanned using a smartphone or tablet. 

QR codes are a good choice for inventory management in scenarios where cost is a concern because they are inexpensive to print and easily scan with a smartphone. They also track items that do not require constant monitoring, such as office supplies or non-perishable goods.

10. Chip Tag

The Chip Tag is a type of RFID tag containing a microchip and a small aerial that holds digital information about a specific item. It is encapsulated in plastic, paper, or a similar material and attached to the product, packaging, pallet, container, or delivery truck. The Chip Tag is read remotely by an RFID reader, which transmits and receives radio signals to and from the tag. The information collected by the reader is collated and processed using specialized software. 

The Chip Tag offers several benefits over other inventory management methods such as barcodes, including the ability to read multiple tags at once, track individual products, and update information. However, creating an RFID management system is a significant investment due to the high cost of the Chip Tag’s microchip and the RFID reader. As a result, it may not be cost-effective for some businesses.


What is the range of various RFID tags?

1. Passive UHF RFID tags: Up to 300 feet

Passive UHF RFID technology is widely used for inventory management due to its long-range reading capabilities. The range of Passive UHF RFID tags varies depending on the tag’s design and the environment in which it is used. However, many passive UHF RFID tags read at distances of up to 300 feet, with typical applicationsi n the 20-30 foot range. This makes them ideal for large-scale inventory management applications. For example, the UHF 915 MHz ABS RFID Pallet Tags and UHF 915 MHz Tie Strap Security RFID Tags are designed specifically for tracking pallets and containers over long distances. 

2. Active UHF RFID tags: Up to 300 feet

Active UHF RFID tags, operating at 433.92 MHz, have a battery that allows them to achieve a much greater read range, compared to passive UHF tags. These tags come in four different models, two of which have replaceable batteries, and all of which have motion sensors to report data if they are moved. They also offer external power wiring to exclude the need for a battery. Active UHF RFID readers have an internal RFID antenna, and external antennas can be added to increase range. 

3. Microchip tags: Up to 1 inch

The range of microchip RFID tags used in inventory management varies depending on factors such as frequency and power output. For example, the TM4 tag has a range of 2.5 meters (8 feet), while the TR800 tag has a range of 0 meters (0 feet) when placed on metal and 3 meters (10 feet) when placed off metal. The TI tag has a range of 8 meters (26 feet) and the TM7 tag has a range of 4 meters (12 feet). 

4. NFC tags: Up to 4 inches

NFC RFID tags have a short-range communication capability and both ends must be within inches of each other. This makes them ideal for inventory management, as they offer quick and efficient tracking of items. 

For example, NFC can be used as a card emulation device for contactless payment methods like Apple Pay in retail. Also, NFC tags can track inventory in warehouses or the movement of items in manufacturing processes. Their short-range capability allows for quick and accurate scanning, leading to more efficient inventory management.

5. Barcode tags: Up to an inch

While barcodes are common in retail settings, their range is limited compared to RFID tags. Barcodes can only be scanned one at a time and require complete visibility. In contrast, RFID tags don’t need to be in sight of a reader and have a larger read range. 

6. HF RFID tags: Up to 3 feet

HF RFID tags have a maximum distance coverage of up to 1 foot (30 cm). However, the typical range of HF RFID tags is around 4-5 inches (10-12 cm). The performance of HF RFID tags can be affected by various factors: the presence of metal or water, interference from other electronic devices, and the orientation of the tag and reader. The type of antenna used can also impact the range of HF RFID tags.

What are the steps on how to use RFID tags for inventory management?

Step 1: Selecting an RFID tag

When selecting an RFID tag for inventory management, there are a few factors to consider. First, determine the read range needed. Active tags have a range of over 100 meters while passive tags can range from a few inches to 100 meters with 10 meters being the typical application. Second, consider the frequency needed. Low frequency (LF RFID) is best for short-range applications, high frequency (HF RFID) for mid-range, and ultra-high frequency (UHF RFID) for long-range. 

Third, decide whether a semi-passive or passive tag is best. Semi-passive tags have a battery to extend communication range, while passive tags rely on electromagnetic energy from the reader. Passive tags are low-cost and have a long shelf life, but are best for situations where they won’t be reused. Finally, consider the size and weight of the tag. Passive tags are small and light, making them ideal for use in inventory management.

Step 2: Get license and testing kit

Some providers will provide you a test environment to test your RFID tags, and inventory solution. There is a free test environment ofr up to 150 assets available at https://z.assetvue.com

Step 3: Install the transponder reader

To install a transponder reader for RFID inventory management, you need the RFID reader itself, a computer or database system to interface with the reader, and RFID cable ties or accessories fitted with HF transponders. The physical placement of the reader is crucial for optimal performance. It should be placed in an area with minimal interference from other radio waves and in close proximity to the items being tracked. 

The reader should be connected to a power source and the computer or database system. Additional steps for proper installation may include configuring the reader’s settings and software to match the desired inventory management system and ensuring that the transponders are properly programmed and attached to the items being tracked. 

Step 4: Set up an inventory management system

To set up an inventory management system using RFID tags, you need an RFID generator, printer, scanner, and portal track software. Each item must have an RFID label attached to it, which will replace the barcode. However, the barcode should not be blocked, as there may be exceptions. Both mobile and fixed readers can be installed on site, with mobile readers used to perform a search for items and fixed ones reading products as they come within the vicinity of certain points of the facility.

To integrate the RFID tags with the inventory management system, you need to tag everything, which is a significant job but necessary for effective asset management and reducing shrinkage. Once tagged, the items will be automatically tracked in your inventory management system. 

Step 5: Start using RFID tags

Once you have your tags, you need to set up your RFID reader and antenna to accurately collect data from the tags. You may also need to encode your tags with relevant data, such as product information or location data.

What industries benefit the most from implementing RFID technology for inventory tracking?

1. Retail

RFID technology provides numerous benefits to the retail industry, especially in terms of inventory management. By implementing RFID tags, retailers can reduce inventory inaccuracies and improve supply chain efficiency. RFID technology allows retailers to track inventory in real-time and locate items more quickly and accurately. This reduces the time spent on manual inventory counting and increases productivity. RFID technology can also be used to curb theft and reduce administrative errors. 

Retailers can pair asset tracking data with sales and video data to identify shoplifting trends and build a case against perpetrators. RFID technology can also help retailers to disrupt the checkout experience. By using RFID technology to improve inventory accuracy, retailers can consistently deliver purchases online, pick up in-store services and bridge the gap between online and in-store shopping experiences. 

2. Manufacturing

RFID technology can greatly benefit the manufacturing industry by providing accurate and efficient inventory tracking. With up to 99% accuracy, RFID reduces errors and the need for manual data entry, ultimately decreasing labor costs. RFID also improves efficiency by automating inventory management workflows, such as cycle counting and tracking work-in-progress inventory. In addition, real-time visibility across all locations enhances logistics, sales, and fulfillment processes. Successful implementations of RFID technology in manufacturing settings include tracking raw materials and finished goods, optimizing supply chain management, and automating inventory counts. 

3. Warehousing

RFID technology improves inventory tracking in the warehousing industry by providing a more efficient and accurate method of data collection. RFID labels can attach to inventory at various levels of measurement and scan in bulk using RFID readers or handheld devices. 

This allows for faster and more frequent data collection, enabling businesses to track inventory throughout the supply chain and conduct cycle counts more effectively. RFID technology also improves inventory accuracy by pinpointing the exact location of goods within a warehouse or distribution center. 

4. Logistics

The logistics industry faces unique challenges when it comes to inventory tracking, such as the need to track items across multiple locations and the potential for theft or loss during transit. RFID technology helps overcome these challenges by providing real-time visibility and accurate inventory counts.

For example, DHL implemented RFID technology to track packages and containers, reducing the time it takes to locate and retrieve items by up to 90%. Another example is the Port of Rotterdam, which uses RFID technology to track containers and optimize logistics. By using RFID, they were able to reduce the time it takes to locate a specific container from hours to just a few minutes. 

5. Manufacturing plants

Implementing RFID technology for inventory tracking in manufacturing plants offers several benefits. Manufacturing plants face specific challenges in inventory management, like the need for accurate and timely tracking of tools, equipment, and materials. RFID technology can help overcome these challenges by providing real-time visibility of inventory movement and location. 

This results in increased efficiency, accuracy, and cost savings through reduced manual labor and improved decision making. RFID technology also prevents overselling, stockouts, theft, and product loss. By automating inventory management workflows, RFID technology enables manufacturing plants to scale their operations and improve logistics, sales, and fulfillment processes. 

6. Government agencies

RFID technology can greatly benefit government agencies in terms of inventory tracking. By implementing RFID, they can improve their efficiency and accuracy when it comes to managing assets. With RFID tags attached to each item, government agencies can easily and quickly locate and track their inventory, saving time and resources. Additionally, RFID can help prevent theft and loss of government property by providing real-time tracking and monitoring of all assets. 

This technology can also assist in asset management, allowing government agencies to easily identify which assets are being used and which ones are not, making it easier to allocate resources effectively. Furthermore, RFID technology provides valuable data insights, such as which assets are being used the most and when maintenance is required. This can help government agencies make informed decisions about their inventory management. 

7. Hospitality industry

RFID technology can greatly benefit the hospitality industry by improving inventory tracking and management. With RFID tags attached to inventory items, staff easily scan and track items in real-time, reducing errors and improving efficiency. 

For example, hotels use RFID technology to track linens and towels, ensuring that they are properly cleaned and replaced when necessary. Restaurants use RFID technology to track food inventory, reducing waste and ensuring that they always have the necessary ingredients on hand. 

8. Pharmaceuticals

The pharmaceutical industry can benefit greatly from implementing RFID technology for inventory tracking. One of the main challenges faced by the industry is the need for accurate and timely tracking of inventory, particularly for high-value and sensitive products. RFID tags provide real-time visibility of inventory levels and locations. They can also help prevent counterfeiting and diversion of drugs, as each tag has a unique identification number that can be tracked throughout the supply chain. 

Notable examples of pharmaceutical companies successfully implementing RFID technology for inventory tracking include Pfizer, which uses RFID tags to track its Viagra product, and GlaxoSmithKline, which uses RFID to track its vaccines. Both companies have reported significant improvements in inventory accuracy, reduced labor costs, and increased efficiency. 

9. Oil and gas industry

RFID technology can greatly benefit the oil and gas industry by improving inventory management in extreme conditions such as heat, dirt, and liquids. For example, hydraulic service companies can use HellermannTyton RFID cable ties made of metal to track their hoses. 

The RFID tags can store information such as the maximum pressure load of the hose, when it was made and installed, and who worked on it last. This information can be linked to a database that serves as an information and management tool for an easy way of tracking the hoses. 

Also, engineers in the industry can use RFID cable ties to manage the inventory and identify the location of commonly used valuable equipment on offshore wind farms. The programmed information corresponds with an app on their tablet PCs, allowing for easy check-in and check-out of equipment. The big benefit resulting from such a system is the permanent control, which has both users and administrators of these assets. 

10. Food industry

The food industry can benefit from implementing RFID technology for inventory tracking by improving supply chain visibility, reducing waste, and ensuring food safety. RFID technology helps challenges such as product spoilage, expiration, and recalls by providing real-time inventory tracking and temperature monitoring. This allows for quicker response times to potential issues, reducing the risk of contaminated or spoiled products reaching consumers. 

11. Museums and Art Galleries

RFID technology is being utilized in museums and art galleries for inventory management. RFID tags are used to track and monitor artwork and artifacts, providing benefits such as improved accuracy, efficiency, and security. RFID tags provide real-time data on the location and movement of items, allowing for better control and management of collections. 

RFID technology can also help museums and galleries overcome challenges such as theft, loss, and damage to items. However, implementing RFID technology can be costly and time-consuming, and requires careful planning and management. 

12. Construction

The construction industry faces several challenges when it comes to traditional inventory tracking methods, such as manual record-keeping and barcode scanning. These methods are time-consuming and prone to errors, leading to inaccurate inventory counts and delays in project completion. 

However, implementing RFID technology for inventory tracking can provide a more efficient and accurate solution. RFID tags and components can automate the delivery of actionable data on the precise location of key physical and human assets through passive RFID and/or active IoT technology. This technology can help construction companies track tools, equipment, and materials in real-time, reducing the likelihood of lost or misplaced items.

What are the use cases for RFID technology?

1. Inventory Management

RFID technology has become an essential tool for inventory management in various industries. In retail, RFID tags on items can help automate stock control and prevent over-stocking or under-stocking. The technology also helps with quality control by tracking items with limited shelf life and boosting stock security by deploying tag-readers at high-risk points. 

In healthcare, RFID can be used for tracking medical equipment, managing medication inventory, and monitoring patient movements. Logistics companies can use RFID to track shipments and optimize the supply chain, reducing the time and cost associated with manual tracking. 

2. Asset Tracking

RFID technology is a powerful tool for asset tracking, allowing for precise location identification of physical and people assets. RFID tags offer many benefits: increased efficiency, loss reduction, data accuracy, scalability, cost-effectiveness, and durability. With RFID, jobs that used to take days can be done in the blink of an eye and with far more accuracy. 

Industries that have successfully implemented RFID technology for asset tracking include healthcare, construction, logistics, finance, and retail. For example, healthcare facilities use RFID to track medical equipment, while construction companies use it to manage heavy machinery and shipping containers. RFID tags are customizable and available in various forms, including labels, PVC, and clip-on styles, making them suitable for a range of asset tracking needs. 

3. Item Identification

RFID technology is used for item identification in inventory management by tagging items with RFID labels that are serialized and offer complete inventory visibility. RFID readers are strategically placed throughout the warehouse to collect movement of the goods, and RFID handhelds can be used to conduct cycle counts or physical inventory counts. The data collected can assist with tracking inventory throughout a facility and managing inventory levels. 

RFID inventory systems streamline and simplify the inventory process by eliminating manual counts. Industries and businesses that use RFID technology for item identification in inventory management include retail, fashion, and tire manufacturers. 

4. Facility Security

RFID technology can be a valuable tool for facility security. It allows for the tracking and monitoring of assets and people in real-time, which helps prevent theft and unauthorized access. RFID can also be used to automate access control, allowing only authorized individuals to enter certain areas of the facility. 

5. Supply Chain Management

RFID technology has numerous use cases in supply chain management. RFID tags can significantly improve inventory accuracy by enabling real-time tracking of items from production to point-of-sale. This wireless communication system allows for the collection and documentation of data, conducting real-time asset counts, and providing estimations based on the data collected. 

RFID tags can also proactively avert over- and under-stocking of items, provide back-stock guidance to keep track of items with limited shelf life, and deploy tag-readers at high-risk points to enable alarms and enhance stock security.

6. Inventory Tracking Systems

RFID inventory tracking involves labeling each item with an electronic chip that transmits data wirelessly from the tag to the reader. This technology is used to track items from production to point-of-sale and is beneficial in optimizing inventories for retailers, manufacturers, and wholesalers.

RFID inventory systems use automation to collect and document data, conduct real-time asset counts, provide estimations, and perform advanced inventory transactions. Some of its uses include stock control, quality control, and stock security. RFID for inventory helps enhance efficiency and streamline processes, providing businesses with accurate inventory counts, better visibility, and improved inventory turn rates.

7. Shipment Verification

RFID technology can be used for shipment verification in inventory management by attaching RFID tags to each shipment. These tags contain information about the shipment, such as the contents, destination, and expected delivery date. 

As the shipment moves through the supply chain, RFID readers track the tags and provide real-time updates on the location and status of the shipment. This ensures accurate delivery by allowing for timely interventions if there are any delays or issues with the shipment. 

8. Theft Prevention

RFID technology can be used for theft prevention in inventory management by providing real-time tracking and monitoring of inventory. RFID tags attach to items and pair with sensors to detect when an item leaves a designated area, such as a store or warehouse, without being properly checked out or purchased. This allows for quick identification of potential theft and can help deter shoplifting. 

9. Access control

RFID technology is widely used in access control systems to provide a secure and efficient way of managing access to restricted areas or assets. RFID access control systems work by using RFID tags or cards that are assigned to authorized personnel or objects. These tags or cards contain a unique identifier that is read by an RFID reader when they are brought into proximity. The reader then sends the information to a central database, which determines whether the person or object is authorized to access the restricted area or asset.

There are several types of RFID access control systems, including proximity systems, smart card systems, and biometric systems. Proximity systems use RFID tags that are placed on or embedded in ID cards or key fobs. These tags are read when they are brought within a certain distance of an RFID reader. Smart card systems use RFID technology to store information on a microchip embedded in a card. Biometric systems use RFID technology in combination with biometric data such as fingerprints or facial recognition to provide an even higher level of security.

10. Location Tracking

RFID technology is commonly used for location tracking in inventory management. It allows for the instant scanning and identification of all tagged objects and people, which increases efficiency and saves time. RFID technology reduces loss by providing real-time accounting of all key assets, thus reducing waste and redundant purchases. 

RFID technology can be applied in various industries, such as supply chain management, access control, vehicle tracking, textile tracking, and event tracking. It can help retailers keep track of inventory and manage loss by tracking potential theft, and it also locates items in hard-to-find or hard-to-reach areas. 


RFID tags are small devices that can store information and communicate wirelessly with a reader. They work like a barcode, but instead of a scanner, they use radio waves to send and receive data. The tag contains a microchip that stores a unique identifier, and it gets its power from the radio waves that the reader sends out. The reader can pick up the signal from the tag and read its data, like the product name or serial number.

An RFID inventory system is a technology that uses electronic tags attached to items to track and manage inventory. It works by wirelessly transmitting data from the tag to a reader, which then collects and records the information. The system helps to streamline inventory management by automating the process and eliminating the need for manual counts. 

The two main components of an RFID inventory system are tags and readers. The tags are electronic chips that are attached to items, while the readers are devices that collect and record the data from the tags. The benefits of an RFID inventory system include real-time inventory visibility, accurate stock counts, and simplified inventory processes

RFID tags offer several advantages for inventory management, including increased accuracy, real-time tracking, and automated data capture. However, RFID tags also come with several disadvantages, such as limited security, expensive integration and implementation, scrambled signals, and ongoing maintenance costs. 

The infrastructure needs for RFID systems are also demanding, requiring the integration of readers, tags, inventory management systems, networks, and buildings.

Research suggests that RFID inventory tracking can significantly improve inventory accuracy in various industries, including retail, healthcare, and warehouses. In some cases, RFID systems have been shown to improve accuracy by up to 13% compared to traditional inventory tracking methods and manual inventory checks. RFID operates via a radio frequency identification system, enabling remote communication of inventory information with up to 99% accuracy.

Potential risks include limited security, as with some older RFID tags, unauthorized parties can clone RFID tags and copy their data using a smartphone. Additionally, the set-up and ongoing maintenance costs for an RFID inventory system can be expensive, and the signals may overlap or disrupt, lowering its usability. Technical issues with integrating scanners and tags may also arise, and software platforms may not support RFID.

Implementing an RFID system for inventory management can be a significant investment for businesses. Here are the costs associated with the implementation:

  • Initial investment: The set-up for an RFID inventory system can be expensive, given its various infrastructural changes. Integrating scanners and tags while investing in employee training programs to learn the new processes can be costly. RFID tags are also more expensive than barcodes.
  • Ongoing maintenance: An RFID inventory system must be routinely updated, i.e., investing in specific RFID readers and tags, to function efficiently. Set-up and ongoing maintenance charges aren’t too cost-effective.
  • Limited security: Unauthorized parties can clone RFID tags without a proper authentication mechanism and copy a tag’s data using a smartphone.
  • Scrambled signal: Since it functions on radio frequency, signals can often overlap, jam or disrupt, thus lowering the usability of an RFID inventory system.
  • Inability to use cell phones as scanners: It is not possible to use a phone to scan RFID readers, as can be done with barcodes. It requires drivers or employees in the field to carry specific RFID readers to do any scans, which can be limiting.

While RFID inventory systems can improve inventory accuracy, the costs associated with implementation must be considered before investing. For most companies, barcode labels are a smart and practical choice for inventory management.