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What is RFID and how does it work?

RFID, an acronym for radio frequency identification, is a technology in which digital data encoded in RFID tags or smart labels and gets captured by a reader that uses radio waves. RFID is quite similar to barcoding because data from a tag or label are captured by a device that retains the data in a database. 

Even though it is, in a sense, similar to barcoding, RFID has multiple advantages over systems that make use of barcode asset tracking software. The most significant advantage of RFID over barcoding is that RFID tag data can be read outside the line of sight, but barcodes need to be aligned with an optical scanner.

Here’s how RFID works:

RFID belongs to a group of technologies known as Automatic Identification and Data Capture (AIDC). AIDC tools automatically identify objects, gather data about them, and fill that data directly into computer systems with minimal or no human intervention. RFID technologies make use of radio waves to pull this off.

To break it down simply, RFID systems are made up of three components: an RFID tag or smart label, an RFID reader, and an antenna.

The RFID tags hold an integrated circuit and an antenna that transmits data to the RFID reader, also known as an interrogator. The reader will then proceed to transform the radio waves into a more usable type of data. 

The information collected from the RFID tags will then be transferred through a communications interface to a host computer system. Here the data can be stored in a database and analyzed at a later time.

The RFID tags that make use of radio waves to share their identity and other information to nearby readers could be active or passive. Active RFID tags make use of batteries, while passive RFID tags are powered by the reader and do not make use of a battery.

Source: Passive Components Blog

What is RFID used for?

What is RFID used for?

RFID is used to search, identify, track, and communicate with items and people. RFID tags are basically smart labels that have the ability to store a wide range of information all the way from serial numbers to a short description and even numerous pages of data.

RFID is used in various areas and has numerous real-world applications. Some of the uses of RFID are:

Logistics & Supply Chain Visibility

If you were wondering how RFID is used in logistics, this one is for you. RFID provides visibility and real-time data regarding individual items during the manufacturing, shipping, and distribution processes, thus providing you with insights that can be turned into actionable measures. This helps you to increase your efficiency, reduce supply chain errors, and improve quality. 

Inventory tracking

RFID makes item-level inventory tracking possible, which is useful across a wide range of industries but is particularly beneficial in the retail secretary. It makes inventory tracking easier across the entire supply chain, all the way up to the point of sale. RFID systems help you create a well-designed inventory system that shares data across all business units, giving you a ton of actionable data. In addition to that, using a handheld RFID reader, your employees can count inventory in a much faster manner.

Timing races

Timing races and marathons is a very popular use of RFID technology. It helps time the races in a rather seamless way, without obstructing the race participants at all.

Tracking attendees

When you’re managing an event or a conference, you need to make sure that the foot traffic of attendees is moving smoothly in and out of seminars and conference halls. You could make use of an RFID attendee system so that you do not have any need for a registration line at your entrances. Even Disneyland uses RFID technology in their MagicBands to manage the visitor traffic in their parks, along with other uses of the bands.

Managing materials

Materials tend to be the biggest project expenditure in the construction industry as well as other related industries. On particularly large job sites, it can be quite a task even finding materials can be quite an issue. RFID solutions can make this quite an easy task.

Access Control

In certain areas, there is a higher level of security required, and access to those areas needs to be restricted only to authorized people. RFID access control tags can restrict access to these areas so that only people and vehicles that have been pre-approved can enter those areas.

Tracking IT assets

IT assets like server blades, laptops, tablets, and other peripherals tend to be quite expensive investments for companies. There is also quite of bit of critical information stored on those computers and systems that should not fall into an outsider’s or a competitors’ hands. IT asset tags make use of RFID technology to make it possible for your team to count their inventory and ensure that all your assets are right where they are expected to be.

Tracking tools

In industries that make use of a wide range of tools, fasteners, and other such items, companies need to manage the availability of those assets properly. If there is a high level of complexity involved, the company can consider making use of RFID tool tracking systems to keep an eye on which tools are being used, which employees are using the resources, and which resources haven’t been returned to the tool crib.


RFID technology can be used to make marketing campaigns more interactive, engaging, and effective. RFID can also be used to make marketing messages more personalized.

What are the disadvantages of RFID?

Here are some of the biggest disadvantages of RFID:

  • Materials like metal and liquid can impact the signal
  • RFID can sometimes not be as accurate or reliable as barcode scanners
  • The cost of RFID readers can sometimes be 10x more than that of barcode scanners.
  • The implementation of RFID systems can be rather difficult and time consuming.
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