What Is RFID?

Radio-frequency identification (RFID) technology uses radio waves and smart labels called RFID tags to store digital info about physical goods. This technology helps identify products and keep tabs on your inventory in real time.

What is RFID? We will provide an in-depth answer, highlighting the technology's many benefits and comparing it to other popular solutions like near-field communication (NFC) and barcodes.

What is radio-frequency identification?

RFID technology uses radio waves to identify a tagged item, such as an individual product or an entire pallet of goods. Unlike barcodes, which require a direct line of sight to scan, you can read RFID tags even if they aren’t visible.

You can use RFID tags to identify individual stock-keeping units and track inventory. If you work with numerous vendors or use a third-party logistics provider, RFID tags are especially useful for keeping everyone on the same page.

How does RFID work?

RFID systems comprise three central components:

• Scanning antenna: The antenna emits radio waves and receives the signals reflected by RFID tags.
• Transceiver: This device combines a receiver and transmitter into a single package.
• Transponder: This is the RFID tag itself. It transmits data in response to the signals emitted by the scanning antenna.

An RFID reader includes both a scanning antenna and a transceiver. The reader scans the transponder to obtain data about the product it’s affixed to. Transponders are more commonly known as RFID tags or smart labels.

RFID benefits

Here are some of the most significant benefits of RFID technology:

Improved inventory management

Whether you use vendor-managed inventory or oversee your stock in-house, you must precisely track your inventory levels. RFID technology aids with this by providing a reliable, accurate means of tracking goods as they flow in and out of the warehouse. 

Insight into consumer preferences

RFID technology allows you to monitor consumer trends and adapt your inventory to anticipate demand. Dynamic inventory management strategies decrease the volume of dead stock in your warehouse and help you make the most of your storage capacity. 

Better loss-prevention capabilities

Combined with a robust warehouse management system, RFID technology helps curb theft and prevent product fraud. You can more easily identify and remedy vulnerabilities in your supply chain to protect your company’s bottom line.

Increased supply chain visibility

Even if your warehouse operates like a finely tuned machine, downstream supply chain delays can lead to missed delivery deadlines and a whole lot of frustrated customers. RFID technology can shed light on bottlenecks within your supply chain and provide the visibility necessary to minimize delays.

Faster checkout

The checkout process is one of the most significant friction points for shoppers. RFID tags can streamline the checkout process at a brick-and-mortar store by scanning every item in a customer’s cart at once.

Accelerated cash flow

RFID tags help you accurately track the movement of goods across the supply chain. You can use these insights to relay information to trade partners, streamline accounts receivable processes, and accelerate cash flow. 

RFID challenges

Despite its many benefits, RFID technology is prone to three common issues:

RFID-blocking materials

Certain materials, including concrete, metal, and even thick leather, can reflect RFID signals. However, RFID waves pass through common packaging materials, such as plastic or cardboard.

Tag collision

If your RFID reader detects too many tags simultaneously, “tag collision” can occur. To avoid this, arrange your equipment to expose your reader to one tag at a time. 

Reader collision

If you position your RFID readers too close together, the signal from one device can interfere with another. This is known as “reader collision.” Anti-collision protocols ensure your devices take turns gathering data.

Types of RFID systems

There are three main types of RFID systems, which are as follows:

• Low-frequency RFID systems: LF systems typically use a frequency of 125kHz but can range from 30–500kHz.
• High-frequency RFID systems: HF systems range from 3–30MHz. Most HF systems use a frequency of 13.56MHz.
• Ultra-high frequency RFID systems: A UHF system generally uses a frequency of 433MHz. However, the frequency can vary from 300–960MHz.

UHF systems can read tags from 25 feet away, whereas the reach of HF systems extends from several inches to several feet. Most LF systems must be within inches of the transponder, but some can read tags from a few feet away.

What are RFID tags and smart labels?

An RFID tag includes a substrate, an antenna, and an integrated circuit (IC). There are two types of RFID tags:

• Passive RFID: These tags receive power from the RFID reader’s antenna. The energy emitted from the antenna triggers a current in the tag’s antenna.
• Active RFID: An active RFID tag has a battery or other built-in power source. 

Passive RFIDs are cheaper to implement. However, active RFID tags have a greater read range.

RFID common uses

Although RFID technology dates back to the 1940s, it’s only recently been adopted at scale. Today, RFID is used for the following purposes:

• Livestock tracking
• Inventory management
• Supply chain logistics
• Inventory control
• Asset tracking
• Vehicle tracking
• Access control
• Shipping
• Retail sales
• Contactless payments

Using RFID technology for contactless payments is a relatively new and exciting development. The Amazon Go store is putting this RFID use case to the test.

Every item in the Amazon Go store is equipped with an RFID tag. Consumers must check in with their Amazon accounts to enter the store. When they walk out, the store’s RFID scanners automatically charge them for the items they took and send them a digital receipt — no checkout required.

RFID vs. barcodes

Universal product codes (UPCs), commonly known as barcodes, are the go-to solution for tracking products, especially in retail settings. However, RFID tags can identify objects without a direct line of sight, presenting new opportunities to accelerate the checkout process.

Additionally, RFID data can be updated in real time, whereas barcode data is read-only and can’t be changed. RFID read time is faster, too — averaging less than 100 milliseconds per tag. By comparison, barcode read time is about half a second.

Overall, RFID tags are more efficient, versatile, and reliable than barcodes.

RFID vs. NFC

NFC allows devices to exchange data using short-range, high-frequency technology. NFC combines a reader and smart tag in one device.

The primary benefit of NFC is that it facilitates bidirectional communication, whereas RFID offers only unilateral communication. However, RFID provides a much greater communication range, several frequency options, and the ability to continuously sample tag data. 

Synergize RFID technology and business processes with Orderful

If you’re ready to incorporate RFID technologies into your business processes, Orderful’s EDI solution is just what you need. Electronic data interchange can accelerate the flow of data across your supply chain.

Schedule a talk with an Orderful expert today to learn more about our cloud-based communication technology.