RFID Asset Tracking: How Radio Frequency ID Transforms Business

Last Updated: January 25th, 2023
Researched and Written by: Lexi Wood

Every business needs a way to accurately and efficiently perform asset management. While employees can go onto the warehouse floor to manually count products and update spreadsheets, it’s time consuming and can lead to human error.

Through Radio Frequency Identification (RFID), it’s now possible to accurately track inventory in real time with fully automated tools that offer greater efficiency, accountability, and security capabilities. No matter the amount of inventory or the size of the warehouse, RFID helps streamline real-time inventory operations while saving money.

What is RFID Tracking?

Chances are, you’ve already heard of RFID technology used in contactless credit cards. However, they are also an important part of asset tracking in a variety of industries. RFID tracking, as described above, is the use of radio signals to keep location tabs on different items, whether they are retail merchandise, factory equipment, or medical tools. RFID can operate at different radio frequencies:

  • Low frequency: Best for close distance scanning of individual tags, under a few inches at max
  • High frequency: Capable of being scanned farther than low frequency tags
  • Ultrahigh frequency: Allows scanning further away from the source, though can be impacted by outside sources

There are a variety of RFID tags and readers to best suit your specific workplace needs. You can even set up multiple RFID systems at your facility to customize how you track different types of merchandise and equipment. They can also provide security, setting off alarms if removed from a retail location without being removed from the product.

How Does RFID Help with Warehousing and Inventory?

RFID asset tracking is part of keeping inventory in warehouse management systems through the use of special physical tags attached to products which communicate with radio frequency readers. The RFID tags and readers work together to wirelessly transmit data on products as they move through the supply chain, whether it’s checking where an item is stored in the warehouse or ensuring enough merchandise is being shipped to a retail location.

In order to successfully track assets with RFID, there are two key pieces of hardware to consider: tags and readers. Additionally, cloud-based RFID software automates the tracking process by coordinating the communication between tags and readers to generate accurate inventory data.

RFID Tags: Active and Passive Tracking

RFID tags are physical tracking devices that contain data and a wireless antenna. Depending on their application, the tags can vary in usage, internal components, and size. In fact, RFID tags can be optimized to fit particular products, such as smaller tags for jewelry and large tags for heavy machinery or equipment. There are also different types of mounting methods, ranging from basic adhesive stickers to welded metal plates.

RFID tags can be attached to all sorts of items, ranging from equipment to merchandise. All tag types have some “memory” capacity, though how detailed and powerful they are will depend on if they are passive or active ID tags.

RFID Adhesive Stickers and Circuits

Active RFID

Active RFID tags contain their own power source which can send out signals to readers over certain distances. The battery-powered tags are divided into two categories: beacons, which send out automated signals over a set time period, and transponders, which are only active after receiving an initial signal. In both beacons and transponders, a battery is necessary for operation.

Memory matters with active RFID tags. RF tags store plenty of rich information about the product it’s attached to. This data can record anything the owner wants, such as identifying information, maintenance history, inspections schedules, and more. Other data can reflect changes in the product’s condition, end destination, or temperature.

Passive RFID

Passive RFID tags are any which do not operate under their own power. Instead, these tags respond to signals sent out by the readers. The antenna then picks up on the “reflection” of these signals to indicate location, rather than generating any signal of its own.

Since passive tags do not require a battery to operate, they tend to last longer than their active counterparts and can be reused for other tracking applications. They are also more cost-effective since they don’t require as many additional features to work as active tags. However, being passive does set limits on how far different frequencies can work on the tags.

There are some semi-passive tags which include a battery and circuit to perform some additional features usually found in active tags. However, the function of this RFID technology is significantly limited compared to any active tag.

RFID Readers

RFID readers detect radio frequencies to track and analyze an RFID tag’s data. Just like RFID tags, RFID readers come in a variety of different formats to fulfill different tracking purposes. Readers range from custom hardware to Bluetooth-enabled smartphones.

Retail environments commonly use handheld RFID scanners to track inventory, while warehouses often install RFID readers at various entry and exit points. Mobile scanners allow for real-time tracking which can be performed anywhere, at any time.

RFID readers can operate at different frequencies to read data at different distances, which can allow for multiple RFID systems to be in place at your warehouse. The varying frequencies can be used to track specific assets to ensure cohesion within the overall system.

RFID Reader at Warehouse

Selecting the Right RFID

There are some important factors to consider when selecting an RFID asset tracking system for your warehouse, retail location, or healthcare center:


RFID technology is susceptible to outside interference which can lead to tracking problems. For example, extreme temperatures can make it hard for UHF readers to pick up signals from tags. Magnets, vibrations, and electromagnetic fields can all cause interference. You’ll need to consider all environmental factors when looking into an RFID asset tracking system. In an area with a lot of interference, systems with low frequencies might be your only option.

Another environmental factor to consider will be temperature. Some products need to be stored at certain temperatures, like food, beverages, and medication. RFID tags can provide real-time information about temperature fluctuations, allowing you to intervene if conditions change.

Materials and Mounting Method

Next, you need to consider what the RFID tags will be attached to in order to track products. For instance, many small tags are attached to items via weak glue. You won’t want to apply these tags directly to any materials, such as glass, which might bear adhesive marks once removed. Stronger mounting methods, such as nails or screws, can also cause damage to the wrong materials.

Further, other tags are attached by magnetic strips or clips. Magnets can damage electronics while clips can leave impressions on fabric materials. And very small items might not have space for a tag to be attached. However, you can instead track entire batches by including a tag on a larger pallet, box, or shipping container.

With so many different types of assets, it’s important to consider your industry when selecting tag material. In healthcare settings, RFID might be used close or directly on human skin. Obviously, these materials need to be as safe as possible in order to perform effective data collection.


The read range of your asset tags will vary depending on several factors. How far are you going to track your products? Do you need line of sight between your readers and tags? And how close do you need your readers to be to pick up signals from RFID tags?

Active tags can provide greater distance, though UHF readers can also increase potential scanning distances. However, the greater distance can increase the chance of interference or outright failure if the tag is too far away.

Automated warehouses can set up dedicated RFID readers at bottlenecks to ensure all products are scanned into the system. Mobile readers now allow for on-the-go tracking, though they usually require active tags to work best. Warehouse managers and employees can walk the floor to scan items as they go with handheld readers, performing instant inventory checks.

Potential Drawbacks of RFID

As covered above, RFID systems have vulnerabilities. Radio interference can leave you literally unable to find products, shutting down your supply chain until the interference is over. If the battery runs out on an active tag, it’s the same as not having a tag attached at all.

Of course, there are also the expenses associated with implementing a RFID asset tracking. You’ll need hardware including physical tags and readers in order to make the system work. And you’ll want asset tracking software to automate as much of the process as possible. These costs can quickly add up, particularly if you want to add multiple RFID tracking options. Total pricing will depend on the exact RFID asset tracking solutions you select.

Fortunately, you can create a fully custom RFID asset tracking system to best meet the needs of your organization. They can even work in conjunction with other tracking methods, such as barcodes and QR codes, to give you complete control over your warehouse or retail operations.

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