A mini warehouse powered by RFId technology - a RFID chandelier communicates with the tagged items in the warehouse.

An Introduction to RFID Technology

By Read Time: 6 min.

With the cost of technology continuing to fall, more retailers and manufacturers are adopting RFID devices to tag products of all types. Although RFID technology has been used in the commercial space for decades, recent advancements have made it possible for businesses to track items in their supply chain with nearly 100% accuracy.

What is RFID Technology?

Radio Frequency Identification, or RFID, is comprised of two components: tags and readers. The RFID reader, also referred to as an interrogator, uses radio-frequency waves to gather information from an RFID tag in order to identify, categorize and track all available assets.

RFID devices, commonly called tags, store information about a product in a digital format. The tag consists of a microchip that stores the information and an antenna that transmits the data. The tag may also be referred to as a label or transponder.

There are three basic types of RFID tags that are used to communicate with the readers: active, passive and semi-passive.

  • Active tags emit information via radio waves in response to a signal from the reader. These tags require some maintenance since they use batteries, and are typically more expensive than their counterparts. You will usually find these tags attached to high-end or expensive items.
  • Passive tags don't actively transmit radio waves to communicate with the reader, but information is transmitted when the tag comes near the reader. Thes tags do not require batteries, which makes them ideal for item-level tagging for products like apparel and footwear.
  • Semi-passive tags, similar to active tags, are battery-powered. However, the tag operates as a passive tag and does not actively emit signals to communicate with the reader. Instead, the battery is used to only turn the tag on when a signal from the reader is received. These types of tags are best used in small environments where tagged items remain within close range of the reader.

How does RFID technology work?

A row of gray and silver passive RFID tags

RFID tags and readers communicate through a series of radiofrequency waves to transfer data. Depending on the type of tag being used, they can be read from a few centimeters to up to 200 meters away.

Through the use of RFID tags, users can uniquely identify their items to effectively track inventory or assets. Tags can store data in one of three ways: write once read many (WORM), read-only or read-write.

  • Write once, read many (WORM) tags only allow information to be assigned to them once, and cannot be overwritten.
  • Read-only tags have information stored in them during the manufacturing process. The information on these tags can never be changed.
  • With read-write tags, information can be added or exchanged to the tag. However, most read-write tags have a serial number that cannot be changed.

How accurate is RFID technology?

Years ago, the accuracy of RFID had kept the technology from widespread adoption. Today, RFID users can expect nearly 100% order accuracy in the retail supply chain, according to a study from GS1 US and Auburn University's RFID Lab. Older ID systems like barcodes were found to be inaccurate on up to 69% of orders, compared to less than 0.01% with RFID readers.

With higher data accuracy, retailers can effectively eliminate cost claims and chargebacks, justifying the investment in the technology, the study said.

Over the years, the supply chain industry has come to accept a certain level of errors from barcodes and other technology and have developed workarounds for those errors. Utilizing RFID technology in your supply chain can help to eliminate inventory and tracking errors that currently exist.

How to determine which type of RFID technology to use

Most businesses will ultimately choose between active or passive tags. Since active tags are more costly and require more maintenance than their counterparts, they are likely best suited for high-value assets in a closed-loop system. For example, truck trailers or plastic totes that move from supplier to customer and back to the origin point can be tracked with active tags.

Passive tags are often used in open-loop systems where the product only moves one way through the supply chain. For example, most apparel and consumer goods will use passive tags since these products will not return to the point of origin. Prices for passive tags have fallen to 10 cents or less, making it cost-effective to track large numbers of inexpensive items.

Another factor to consider is the distance at which the tag will be read.

  • Low frequency (LF) tags will typically have a short read range of 1 - 10 centimeters.
  • High frequency (HF) tags are limited to a read range of up to a meter.
  • Ultra-high frequency (UHF) tags will typically achieve a read range of 5 - 6 meters, but can reach 30+ meters in ideal conditions.
  • Active tags, often referred to as beacons, can achieve a read range of up to 100 meters.

If you're planning on tagging metal or liquid items, you may need to invest in specialized tags. Metals and liquids make it difficult for standard tags to send and receive radio signals.

How can you get the best value out of RFID?

To receive the full benefits of RFID technology, the merchant must be willing to use the data from the tags for actionable intelligence. The technology and business systems must be in place so that merchants can use the available data to improve store and supply chain operations.

The merchant should devise a strategy to understand whether individual items should be tagged or if case lots or pallets provide sufficient visibility.

What are the benefits of RFID technology to a merchant?

Inventory on shelves tagged with passive RFID tags

The primary application for RFID tags is asset tracking. With RFID, users can increase asset utilization, identify the last known asset user, and reduce the number of lost items in their inventory.

By using RFID tracking, merchants and brand owners can reduce operating costs and improve margins by ensuring the right goods are sent to the right place.

Because accuracy is approaching 100% utilizing RFID, merchants can greatly reduce inventory errors. Cost claims and chargebacks can be effectively eliminated, which provides an ROI that justifies the initial investment in the technology.

Speed is also a factor. In one test, a store clerk scanned the UPC codes on 12 pill bottles in 37.9 seconds. An RFID scanner read tags on all the bottles in just over one second.

What are some of the advancements we can expect to see with RFID in the future?

With the ability to store and transmit data, RFID could be a key component in blockchain applications. The combination of RFID and blockchain technology could help to improve visibility for shipments at the dock door. Using smart contracts, merchants will be able to issue financial transactions based on the location of goods.

It's also worth noting that advancements in RFID technology could play a role in developing “lights out” manufacturing and logistics that don't require human involvement. With RFID, items can be tracked in real-time without passing in front of a scanner one at a time like items with barcodes.

At Warehouse Anywhere, we provide the technology and insights to help you put RFID to work in your supply chain. To find out more, contact the experts at Warehouse Anywhere today.

About the Author

Steve Ciemcioch | Warehouse Anywhere

Steve Ciemcioch

Steve Ciemcioch is the President of Warehouse Anywhere. He has over 15 years of experience building solutions in the supply chain industry and holds a degree in Business Administration and Management from Medaille College.

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