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Key Takeaway

  • RFID (Radio Frequency Identification) Systems are wireless communication systems that use radio waves to identify, categorize, and track objects, people, or animals by attaching RFID tags to them, which can be read by RFID readers without requiring line-of-sight or contact.
  • Pet microchips, E-ZPass toll scanners, and industrial shipments all have one thing in common — they all utilize RFID technology. RFID can automatically communicate critical information about assets, and businesses rely on RFID systems to accurately track assets, prevent loss or theft, and improve business processes.

    RFID is a popular solution that’s gaining traction in multiple industries. If you want to introduce RFID to your business, it’s good to understand how this technology works and what it can do for your organization.

    In this guide, we’ll cover what RFID is, how RFID systems work, its pros and cons, examples of RFID in today’s world, and how to implement an RFID solution for your business.

    What are RFID Systems?

    Radio Frequency Identification (RFID) is a wireless communication system that belongs to a larger group of technologies called Automatic Identification and Data Capture or Automatic Identification and Data Collection (AIDC). All AIDC technologies automatically identify, collect, record, store, and communicate information with minimal human intervention.

    RFID technology transmits digital data through radio waves. This makes it possible to automatically identify and track objects without the need for physical contact or direct line-of-sight. Businesses use RFID systems for supply chain management, inventory tracking, asset tracking with RFID, access control, and much more.

    RFID technology is in no danger of becoming obsolete anytime soon, either. With the global market worth $8.9 billion in 2020, it’s predicted to reach $13.6 billion by 2025 and $20.2 billion just another five years later.

    Person touching RFID digital graphic illustration

    How RFID Systems Work

    Every RFID system comprises two components: a smart label or tag and a reader. Many RFID labels and tags have an integrated processor and antenna to transmit data via radio waves to the reader. More complex RFID systems may have an external antenna that acts as a conduit between the tag and the reader.

    The RFID tags are attached to the asset, but the type of attachment depends on the product. Once the reader receives the radio waves, it converts the encoded data into a readable form and passes it to a computer system for storage and use.

    RFID systems can be very simple or extremely complex, which makes them suitable for various environments and applications. In fact, there are three types of RFID systems: active, passive, or semi-passive.

    Active RFID

    Active RFID tags require a continuous power source, so most have an internal battery lasting three to five years. Active RFID systems have long read ranges, durable tag options, and large memory capabilities, which makes them suitable for tracking expensive assets.

    This is why they’re more popular in the manufacturing, logistics, and construction industries. However, active RFID systems tend to be more expensive because of their complex setup.

    Passive RFID

    Unlike active systems, passive RFID tags don’t have a battery. Instead, the RFID reader transmits electromagnetic energy to the tag to transmit data.

    Passive RFID systems have shorter read ranges, so they’re generally less expensive than active systems. Likewise, because the tags are smaller, passive RFID systems are more popular in small spaces.

    Its affordability and simpler setup make passive RFID more popular for retail, hospitals, agriculture, and food service applications.

    Semi-passive RFID

    A semi-passive RFID system is a hybrid solution that uses a battery to power the RFID tag, which improves data transmission. The battery gives the tag a longer read range and more capabilities than a passive system.

    However, unlike an active RFID system, a semi-passive system doesn’t have an onboard transmitter. Therefore, it has a more limited read range than an active RFID system. Semi-passive systems are a good compromise for applications that have a medium read range and require additional features.

    Check out this video to learn more about the basics of RFID:

    The Advantages of RFID Technology

    RFID has origins as far back as World War II, but the technology has only recently gained traction in commercial uses. More and more industries are realizing the benefits of opting for RFID tracking, especially in an era of digital transformation.

    RFID has several advantages over other asset tracking solutions, including:

    • Less active monitoring: Standard barcodes must align perfectly for an optical scanner to read information, although some offer varying scanning angles and distances. But RFID doesn’t require line-of-sight to retrieve data — which means the system can read multiple RFID tags simultaneously. RFID also requires less human monitoring, which increases organizational efficiency and decreases labor costs.
    • Enhanced asset tracking: RFID systems can track individual items at different stages of production or delivery. This allows organizations to keep better tabs on each asset and reduce the risk of loss or theft.
    • Lower costs: RFID can reduce labor costs and even prevent compliance-related fines. Thanks to RFID’s rising popularity, the cost of implementing an RFID system is decreasing, which makes it accessible to more businesses.
    • Improved safety: RFID systems can automatically track when products, such as industrial equipment or machinery, are due for inspection. RFID also enables automatic logs, which help with regulatory compliance and audits.
    • Better data accuracy: Manual scanning and data entry provide plenty of opportunities for mistakes, but RFID technology eliminates the risk of typos. RFID’s automatic data collection and storage reduces the possibility of human error and improves data quality across the board.
    • Improved customer service: RFID scans multiple items at once, which reduces customer wait times in retail stores, hospitals, and car dealerships. This makes in-store staff more available to help customers, which can also improve customer satisfaction.
    • Higher ROI: While it does require an upfront investment, ROI generates a return on your investment by reducing labor costs, recovering lost assets, and reducing billing disputes.

    The Disadvantages of RFID

    Despite its many benefits, RFID technology isn’t right for every organization. When considering an RFID system, you’ll need to account for the downsides of this technology, which include:

    • Increased expenses: While the cost of RFID has decreased significantly, it’s more expensive than barcoding. Barcodes cost a few cents apiece, but RFID labels can run anywhere from $1 to $30 apiece. You’ll also need to purchase software to analyze and store RFID data.
    • Too-small tags: RFID tags may be too small to support an antenna that would read. The size of the label and antenna determine the distance the RFID signal can project to be read.
    • Security concerns: RFID is a cloud-based technology, which makes cybersecurity a valid concern. Hackers can infiltrate RFID systems or make clones of RFID chips in order to gain unauthorized access. Organizations using RFID need to invest in a strong cybersecurity setup to prevent cyber attacks.
    • Environmental interference: While RFID labels are durable, environmental factors can still interfere with the signal. For example, RFID does not read through water, metal, or static plastic containers, and it often doesn’t work in cold or refrigerated environments, as it may be too cold for the scanners to function properly. Tagging a server room with RFID is another example where there can be too much signal interference for the tags to be read.
    • Scanner sensitivity: Along with environmental interference, RFID systems often have issues with scanner sensitivity, resulting in problems such as accidentally scanning assets through a wall in another room.
    • Varying readable distances: The readable distance of RFID tags varies based on the surface they’re attached to. Metal surfaces project a stronger signal than plastic, for instance. As a result, companies may have to choose many different tag types for every asset surface that will be labeled.
    • Complexity of tag configuration: RFID tag configuration must be in a grid so that they can be triangulated to scan the correct asset locations. However, this may result in the scanner not scanning all assets and giving the last known location of assets that were not found — resulting in total corruption of the asset management database.
    • Privacy concerns: Some critics believe that RFID is too invasive. For example, merchandisers can track purchases in the retail industry to provide a more personalized shopping experience. However, critics believe this is an invasion of privacy. It also means that the businesses collecting this information have a responsibility to protect it from common security threats and data breaches, such as RFID skimming. RFID signal can be read by nefarious actors, so it’s not an option for secure assets or SCIF (Sensitive Compartmented Information Facility) situations.
    Person scanning barcode labels using a barcode scanner

    6 Examples of RFID

    RFID technology has so many applications. While it’s particularly common in manufacturing for applications like asset tracking, other industries are also embracing this technology.

    Learn more about RFID’s possibilities with these six use cases.

    1. Retail

    The retail industry uses RFID technology throughout the entire production, distribution, and sales process:

    • Supply chain visibility: Many retail customers demand total transparency about the products they buy. RFID increases visibility within the supply chain, giving both retailers and shoppers a clear view of product origin.
    • Improving stock accuracy: RFID systems automatically notify employees when a certain item is low or out of stock, which enables faster reordering. RFID’s real-time tracking also allows store personnel to find misplaced items.
    • Reprioritizing labor: By implementing an RFID system, retail store employees can redirect the time they originally spent doing inventory to helping shoppers.
    • Preventing theft: RFID tags attached to retail items can immediately alert store employees of attempted shoplifting.

    2. Healthcare

    The healthcare industry adopted RFID for various applications, including:

    • Real-time infant tracking: In hospitals, newborn babies wear an RFID-tagged bracelet that matches them to their mothers and prevents abduction.
    • Care efficiency: RFID is often used to monitor the entire care process, reducing the time between patient check-in and when they receive care or ensuring surgeries start on time.
    • Lower operating costs: RFID technology can eliminate human and systemic errors that drive up operating costs and inefficiencies.
    • Hygiene monitoring: Some hospitals use RFID tools to measure provider and staff temperatures and hand-washing for infection control, which improves patient safety.
    • Pharmaceutical management: Healthcare organizations can track medications with RFID to reduce dosage errors, prevent theft, and match patients to the correct medication.

    3. Government and Military

    A number of government agencies use RFID technologies to improve security.

    For example, the government uses RFID in its identification tags to secure access to certain government buildings, departments, or military bases. RFID is also used to track and monitor hundreds of Government Furnished Property (GFP), such as law enforcement, research, and voting equipment.

    RFID tags

    4. Livestock

    RFID technology is also popular for livestock management. Using RFID on livestock increases animal health protects owners from major losses due to disease, and safeguards our food supply.

    In fact, the USDA gave out over eight million RFID ear tags to farmers and ranchers in 2020, hoping that widespread adoption would protect the industry.

    Farmers and ranchers use RFID ear tags to track individual animals, including cows, goats, sheep, and pigs. Traditional metal livestock tags require human analysis, but RFID tags speed up the process while reducing errors.

    Farmers also use RFID tags to prevent the spread of disease in livestock. An RFID tag stores an individual animal’s entire health history, allowing for quick recognition of potential disease outbreaks. This immediate traceability is essential for managing quick-spreading illnesses in cattle.

    5. Manufacturing

    Industrial RFID technology often uses more durable tags with longer read ranges than consumer-grade RFID tags. Manufacturers use this technology for:

    • Equipment monitoring: Manufacturers use RFID to track and manage industrial equipment to prevent loss, conduct preventive maintenance, and automate work orders.
    • Quality control: RFID systems make it possible to track assets as they move through the manufacturing process. This makes it easier to identify problems long before customers receive the product.
    • Supply chain management: Industrial RFID systems accurately track shipments at all stages of the supply chain to improve supply chain health.

    6. Automotive

    The automotive industry uses RFID for both vehicle manufacturing and at the dealership level. This industry uses RFID for:

    • Vehicle component identification: RFID monitors individual vehicle parts shipped from various suppliers to ensure accurate quantities.
    • Synchronizing production flow: RFID makes the production line process more efficient by individually recognizing auto parts and assemblies. This helps automotive companies ensure the right products are in the right place at the right time.
    • Tracking vehicle inventory and location: RFID allows automotive dealerships to track vehicle inventory in real time, so they always know what’s available. Additionally, RFID technology can determine a car’s precise location, which is helpful for dealerships with a large inventory.
    Person with gloves with a digital RFID graphic illustration overlay

    How To Start Using RFID in Your Business

    If your organization is considering investing in an RFID system, it’s important to understand that RFID isn’t a one-size-fits-all solution. Follow these tips to build an RFID system that generates tangible results for your business.

    Consider Your Goals

    Do you need to improve inventory management in your retail store? Or do you want to track shipping for expensive industrial equipment?

    You’ll need a very different setup for these applications. Understanding what you want to achieve with RFID will help you decide which RFID system to implement.

    Choose Appropriate RFID Tags and Readers

    Your organization will need to choose between active, passive, or semi-passive RFID systems. The right choice comes down to your budget, physical setup, desired read range, and the nature of the items you’re tracking.

    Determine the Software Requirements

    For RFID to be fully effective, your business needs software with quality reporting capabilities to manage RFID-captured data. This software should also integrate with any existing inventory or supply chain systems. Assess multiple software solutions to find the right fit for your RFID setup.

    Test and Adjust the RFID System

    Every RFID system, no matter how simple, needs testing before implementation. You can test the system in a small location or on a small number of assets and then make any adjustments needed. Once you’ve optimized the RFID system on a small scale, it’s ready for launch on a larger scale.

    Maximizing Business Potential With RFID Systems

    RFID systems streamline business processes for a wide range of industries. As this technology continues to evolve, it’s becoming more accessible to more businesses than ever before. Even small businesses can take advantage of RFID tracking system solutions to do more in less time.

    You’ll also need solid labels and tags to get the most returns from your investment in RFID. Camcode provides a range of durable RFID labels with human-readable and machine-readable codes. Check out our RFID labels to find the right setup for your business.

    Frequently Asked Questions

    Can you track someone with RFID?
    The short answer is yes, you can, as it’s possible to attach an RFID tag to both equipment and clothing. For example, if a person has a particular piece of equipment assigned to them and that equipment is required to be with them at all times, then it’s possible to track that person’s movements based on the location of the equipment.

    How accurate is the location tracking of RFID technology?
    When it comes to passive RFID tags, the reader needs to be within range of the tag in order for it to be detected. In this situation, you would know the tag is nearby, but most passive systems won’t be able to track its location. Many active RFID tags can be detected from a little more than half a mile, while the given location can be accurate to within roughly 10 feet.

    Are RFID tags better than barcodes?
    While there are benefits to RFID in some instances, barcodes still offer better and more reliable performance in many applications. In fact, it’s often recommended that barcodes be used in conjunction with RFID as a means to verify the RFID system’s data and as a backup should the RFID system fail.

    Perhaps the biggest problem with barcodes is that each must be manually scanned. The scanner, therefore, has to be close to the item in question, requiring you to know its location and also to be within its line of sight. However, RFID comes with many challenges that make it unsuitable for various applications, such as:

    • Tagging server rooms: There’s typically too much signal interference, rendering the RFID tags unreadable.
    • Cold or refrigerated environments: The cold temperatures can negatively impact scanner performance.
    • Applications requiring RFID signals to be read through certain materials: RFID doesn’t read through water, metal, or static plastic containers.
    • Tagging secure assets or tagging assets in SCIF environments: RFID is insecure, as the signal can be read by malicious actors. That makes RFID unsuitable for applications in which security is a priority.

    In addition to its unsuitability for many common applications, RFID also poses other challenges, such as varying readable distances, meaning companies may need to choose many different RFID tag types to suit each asset’s surface.

    Plus, while interference is a common issue, scanners can also be too sensitive, inadvertently scanning assets through a wall in another room. Finally, RFID tag configuration is complex, and if a scanner provides data on assets that were not found, it may corrupt the entire asset database.

    Questions about the article? Let us help!

    Our sales engineers are experts in automatic asset tracking, tagging and identification,a nd can answer all your questions. Get in touch now.

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