If you’ve wondered whether or not RFID tagging is right for asset management in your warehouse, we’ve got answers for you. Radio Frequency Identification (RFID) has been a growing technology year over year that continues to become one of the top technologies in warehousing.

For many warehouse managers, you can determine whether or not it’s right for your warehouse by clearly understanding both the benefits and drawbacks of implementing RFID technology throughout your processes.

What Is RFID Tagging?

Radio Frequency Identification seems like an incredibly complex system when in reality, it’s much more simple than most people realize. Through the use of wireless communication, RFID systems allow software platforms to easily and quickly identify and locate different items, objects, animals, and sometimes people as a part of the internet of things (IoT). Its application in warehousing as a method for inventory tracking makes it a modern alternative to traditional barcode scanning.


RFID flow chart

How Does RFID Tagging Work?

RFID technology uses wireless communication, but how? It’s important to get somewhat granular. An RFID system consists of three main parts that work together to provide the information needed:

  1. An RFID tag
  2. An RFID reader
  3. A computer with a database and software

Within the RFID tag itself is a transponder that transmits stored data, such as SKU information when used for inventory management in warehousing, to the RFID reader via radio waves. The RFID reader, sometimes called an interrogator, combines a scanning antenna and transceiver to receive the data from the RFID tag. There are two types of RFID readers: fixed readers, which are permanently installed in a set location such as at the receiving bay so that the inventory management system or warehouse management system (WMS) can automate receipts as pallets flow into the warehouse, and mobile readers, which replicate mobile barcode scanning. A computer attached to these RFID readers can then cross-reference the transmitted data with the inventory data stored in the database, allowing the system to decode and determine what’s being scanned.

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While RFID tagging does not require line-of-sight to work—unlike traditional barcode scanning that requires a scanner to directly “see” the barcode, the range of RFID tags varies. Some RFID tags can be scanned from greater distances than others, and the type of tag, reader, and interference around the reader all contribute to how far away you can be to still receive accurate data. Different types of information—including SKUs, lot numbers, serial numbers, and more—can be stored, scanned, and updated in real-time in the computer’s software system.

For a deeper look, check out this video link.

Types of RFID Tags

Within the realm of RFID technology, there are a few different types of tags you’ll come across. The two most popular are active RFID and passive RFID tags.

Active RFID is a system that uses batteries as the power source for tags sending signals to the reader. These active tags can be read from greater distances and can transmit data much faster than their passive counterparts.

Alternatively, passive RFID tags don’t require battery power; instead, the tag is powered by the electromagnetic field emitted from the reader. These tags are much less expensive than active RFID tags but have shorter read ranges and can take longer to receive data back.

Depending primarily on how much information you’ll need to transfer and at how great of a distance can determine which you choose for your system and process.

The Different Types of RFID Systems

Beyond the above categories of RFID systems related to tag type, there are three main types of RFID systems: Low-Frequency (LF), High-Frequency (HF), and Ultra High-Frequency (UHF). Microwave RFID is another option that isn’t quite as common but is also available to the industry. The country or region often dictates the frequency ranges used by these systems that they’re being used within.

  • Low-frequency RFID systems can range from 30 to 500kHz but often sit around 125kHZ. These systems often have the shortest transmission ranges making them ideal for uses where it’s not difficult to get close to the item that you need to scan.
  • High-frequency RFID systems range from 3 to 30MHz. These systems offer higher transfer speeds for more data.
  • Ultra high-frequency systems range from 300 to 960MHz. The higher frequency rate can easily transfer large amounts of data from up to 25 feet away.
  • Microwave RFID systems are intense, to say the least. However, these systems do serve a purpose and can be used in specific applications. Because they often run at 2.45GHz, receivers can read tags from more than 30 feet away.

What’s best for your business and warehouse will determine the system you use and the radio wave frequency at which it scans and transmits data. For example, if you are using RFID tagging for asset tracking in just a specific zone of the warehouse, you may not need to invest in the highest frequency RFID systems available to meet your goals.

RFID & Warehouse Management: Pros & Cons To Consider 1

Common Uses for RFID Tagging Outside of Warehousing

This technology has slowly been implemented for decades and has continued to grow in use, but it was not until recently that it became more widespread due to the decrease in cost. You can now find RFID systems used across a variety of industries and even in public-facing applications. For example, international clothing retailer Uniqlo embeds RFID microchips into the price tags of their merchandise to facilitate effortless self-checkout and boost customer experience to the next level. At their stores, consumers do not need to scan individual items with a barcode scanner; they can simply drop their items in a bin equipped with an RFID reader and pay.

Here are many of the uses that you’ll find for these systems today:

  • Inventory control
  • Asset tracking
  • Vehicle and equipment tracking
  • Pet and livestock tracking
  • Customer service and loss control
  • Access control in security situations
  • Supply chain management and logistics
  • Shipping
  • Healthcare
  • Manufacturing
  • Retail
  • Tap-and-go payment systems

RFID Tracking System Applications in Warehousing

If the benefits and design of using RFID tags are starting to grab your attention, you’re in luck because there are many ways that you can use this technology to provide your warehouse with a number of benefits.

An RFID system can be used for a number of tasks in your warehouse, including:

  • Receiving and put-away
  • Locating stock
  • Inventory control
  • Cycle counting
  • Order picking and packing

Some of the RFID systems we’ve discussed may do more than is necessary for your inventory management processes, but for businesses that are working with more expensive inventory items, use of RFID may be the perfect solution for promoting better visibility of valuable goods at all times.

RFID & Warehouse Management: Pros & Cons To Consider 2

Pros and Cons of Using RFID In Warehousing

Like anything, there are advantages and disadvantages alike for using and implementing RFID systems. Here are some of the ways we’ve seen it play out for warehouse managers and those who use these systems.

Benefits of Using RFID in Your Warehouse

  • Eliminate manual data processes: One of the most significant advantages of using RFID tagging in your warehouse is that it can automate many tasks and processes currently being completed manually.
  • Increased accuracy: With these systems, there’s no more risk of human error with data entry. This can play a significant role in reducing errors and boosting inventory accuracy throughout your warehouse.
  • Improved efficiency: By automating tasks and increasing accuracy, you can see a drastic improvement in the overall efficiency of your warehouse, which can lead to increased profits.
  • Enhanced inventory visibility: Leveraging RFID inventory management enables you to have an accurate, real-time understanding of your stock levels at all time, helping you avoid both understocking and overstocking.
  • Reduced labor costs: As we mentioned, you’ll need fewer employees to complete these tasks manually by automating tasks.
  • Improved customer satisfaction: By increasing the efficiency of your warehouse, you can also improve customer satisfaction by getting orders out the door quicker and reducing errors.

Drawbacks of Using RFID Throughout Your Warehouse

  • High initial cost: One of the biggest disadvantages to using RFID tagging is the high initial cost. These systems can be expensive to implement and get up and running.
  • Lack of understanding: There’s still a lack of understanding when it comes to RFID technology, which can lead to hesitancy from employees, customers, and shareholders alike.
  • Privacy concerns: With the increased use of this technology, some people are worried about non-consensual data collection or being unknowingly tracked by these systems.
  • Interference: One of the issues that can occur with RFID technology is interference. If you have a lot of metal or water in your warehouse, it can interfere with the signals and cause problems.

Smart Labels vs. RFID Tagging

If you own, work in, or manage a warehouse, then you’ve likely already seen how digitization may be able to benefit your warehouse, either with traditional barcode scanning or newer innovations like RFID tagging and smart labels. But, if you’re still on the fence about embracing these emerging technologies, you may be wondering what the differences is between RFID tagging and smart labels.

Smart labels are simply labels that can provide information similar to RFID tags. The main difference is that with smart labels, you’ll need to physically scan a smart label with a smartphone or barcode scanner. By contrast, RFID systems, as mentioned earlier, work to read and scan tags from several feet away without needing direct line-of-sight.

So, depending on the type of inventory and volume that you’re working with, RFID tagging can be a resource that serves you and your warehouse well. For example, inventory that would be difficult to scan manually like a barcode—e.g., it is too large or heavy to move, or it is stored high above the ground—would be a great candidate for RFID tagging. 

Choose Extensiv for Your Warehousing Needs

At Extensiv, we offer a number of products that can help your warehouse reach a greater level of efficiency and clarity for you and the employees. We embrace new technologies and strive to support whatever inventory management tools you use, including RFID tagging, through system integrations to help you get the most out of your business.

For brands managing their own inventory in a private warehouse or distribution center, Extensiv's warehouse management solutions offer a customizable warehouse and inventory management product that you can use within your warehouse for increased productivity. For third-party logistics (3PL) warehouses managing inventory on behalf of merchants and retailers, Extensiv 3PL Warehouse Manager allows you to monitor inventory levels and orchestrate your workflows for each customer.

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