What is RFID and How Does it Work? RFID Use Cases

By Russ Davidson • Updated on July 12th, 2022

Radio-frequency identification (RFID) is an automatic identification technology that uses computer chips and radio. Readers will likely be familiar with the term ‘RFID’ and its usage in modern-day tracking systems. However, understanding how RFID technology works is an entirely more complicated subject. To clarify this, we have provided a brief overview of what exactly RFID is and how it operates, from principles to applications.

RFID is a technology that uses computer chips and radio waves to automatically identify items and transmit data. It is often used for tracking inventory, supply chain management, and access control. RFID has been around for decades, but it’s only recently that it has become viable for commercial use. Now, it is used in many industries, from retail to healthcare. While it is a very useful technology, there are certain privacy and security concerns that must be addressed. Such concerns need to be kept in mind, especially when implementing RFID tracking in supply chains.

What is RFID

What is RFID?

RFID stands for Radio-frequency identification, which is a technology that uses radio waves to interact with and track tags attached to objects. RFID is often used for inventory tracking and supply chain management, and is usually managed via warehouse management software. It is also used in libraries, museums, and hospitals for item tracking, supply chain management, and access control.

RFID tags are small computer chips that can be attached to items and used in place of bar codes. The tags have built-in sensors that communicate and are identified by readers. RFID technology encodes data into the RFID tags and labels that can be captured by a reader via radio waves.

RFID systems can be categorized into low frequency (LF), high frequency (HF), and ultra-high frequency (UHF) bands. This refers to the radio waves and how they behave, with each having their own advantages and disadvantages. For example, low frequency RFID provides a short read range and has a slower read speed, but has less sensitive to interference. The higher the frequency gives a longer range and faster read speed, but also makes the system more sensitive to interference.

The biggest users of RFID are in the world of warehouse management and shipping operations. The technology can accurately track inventory in real-time with fully automated tools that offer greater efficiency, accountability, and management capabilities. This ensures that packages can be handled properly and routed to their correct destinations.

History of RFID

RFID was first invented in the 1950’s by George Wilder who was working for General Electric as an engineer. Wilder was interested in creating a system to help track inventory within manufacturing plants. He thought that existing technologies, such as barcodes and paper tags, were too burdensome and costly. In the years following, there were many failed attempts at implementing his ‘radio-frequency identification’ idea. However, in the mid-1990’s, Japan’s automobile industry began to heavily invest in RFID research and development. This led to the creation of the first commercial RFID chips in 1999.

From the beginning, RFID technology displayed a certain knack for versatility. The earliest RFID tags tracked just about as varied a group of items as you could imagine: keys, cows, and nuclear waste. Since then, engineers have further refined the technology–providing an abundance of RFID tag-size, data storage, and power options.

How Does RFID Work?

RFID technology uses radio waves to read and identify items and transmit data. An RFID system includes a computer, an antenna, and an RFID reader or scanner. The reader sends out radio waves that are picked up by a nearby RFID tag. The RFID tag is a small computer chip with an antenna that sends its information back to the reader. The computer keeps track of the information from all of the nearby RFID tags and can be used to automate operations such as inventory management.

Because RFID uses radio waves to communicate, RFID tags only need to be within the read range of the RFID reader to work–meaning RFID doesn’t need line of sight. This provides a huge advantage over a barcode reader, which must be in direct contact with a barcode in order to pick up on the data within the barcode itself.

What used to be a process of scanning individual barcodes on items as you remove them from inventory could potentially turn into a situation where an entire pallet of items moves through an RFID scan zone–allowing all items to be scanned simultaneously.

What are RFID Tags?

RFID tags are small computer chips with an antenna that can be attached to items to track them. Tags are programmed with a unique identification number that can be read by an RFID reader. RFID tags can be embedded in products, animals, or people. They are often used in place of barcodes where a barcode scanner would not be able to read them. RFID tags are made of an integrated circuit, a tiny microchip, and an antenna. The chip stores data that can be transmitted to a computer. The antenna picks up radio signals from an RFID reader.

There are two primarily types of RFID tags: Active RFID tags and Passive RFID tags.

  • Active RFID tags are continuously operating via battery-power. These tags are usually larger–making them more suitable for larger assets and also giving them a longer read range. Active tags are used in more rugged environments or in industries commonly found outdoors, such as oil, gas, construction, and mining.
  • Passive RFID tags don’t have an internal power source–they are instead powered by the RF waves from the RFID scanner itself. These tags are smaller and far less expensive than Active RFID tags. They are best used on smaller assets and are more commonly found in indoor environments such as healthcare, manufacturing, and retail.

What are RFID Readers?

RFID readers are devices that read RFID tags and transmit the data to a computer. There are two types of readers: active and passive. Active readers use their own power source and emit their own radio waves that are picked up by nearby tags. Passive readers don’t have their own power source. Instead, they receive and decode radio waves from nearby active readers. RFID readers are often used in supply chain management. They are used to track items from the manufacturer to the end-user. They are also used to track livestock, pets, and people. RFID readers can also be used to gain access to secure areas. They can be used in place of a physical ID card.

What is RFID Used For?

RFID tags are primarily used for inventory tracking, supply chain management, and access control, but they can also be used for asset management via RFID asset tracking. They are also used in libraries and museums for item tracking or for livestock tracking. Farmers can use RFID tags to track the location of their livestock, which helps prevent diseases and contamination. RFID is also used in the medical field for inventory tracking and patient monitoring.

RFID is an ideal building block technology. Simple, scalable, and inexpensive, RFID adopters are leveraging the technology to answer the questions of “what is it” and “where is it” in an ever-expanding set of instances.

Although the location-tracking tags that integrate with inventory software have been around for decades, new applications continue to appear as the tech becomes more affordable and approachable. Explosive e-commerce growth and the Internet of Things have only intensified the demand to digitize and track real-world objects.

  • Retail: 100% inventory coverage and cashier-less, checkout-free stores. Retailers can add RFID tags to their inventory to improve inventory accuracy and reduce stockouts. RFID tags can also be used in smart grocery stores that offer no-wait checkout by tracking and billing for items placed into the shopping cart.
  • Construction Sites: Smart belts to increase worker safety. RFID tracking devices can clip to workers’ belts and help ensure managers can contact them when needed. They also help register if a worker slips or falls, alerting safety managers who can make sure aid arrives quickly. Workers can also use the devices to notify managers of safety issues they encounter.
  • Airlines: Customer visible real-time luggage locations. Fliers who check bags can receive mobile notifications as bags are loaded onto and off of airplanes and when they reach carousels for pickup.
  • Warehousing: LED-guided order picking. Helps pickers find items faster, reducing errors in the process. Real-time location-aware systems that track both the picker and items on the pack list can help toggle LEDs for aisles and bins; literally lighting the way for pickers.
  • Hospitals: Take-one-leave-one system for staff scrubs, medication management, optimizing traffic flow in hospitals, and monitoring sophisticated equipment. RFID-equipped devices can distribute and monitor medical-procedure uniforms which reduces the tendency of staff to treat scrubs as disposable.
  • Child Safety: A lanyard alternative to GPS. RFID technology helps track children by wearing a lanyard holding a card embedded with an RFID tag. Stationary tag readers can record when the child passes by and sends a message to a parent’s phone to inform them of the child’s location. Police officers can use a handheld reader to scan the card and contact the parents to reunite the family quickly.
  • Fashion: Smart fitting rooms from retailers outfit dressing rooms with interactive, RFID-powered kiosks. By scanning dressing room items, shoppers can access product data, find similar alternatives, and provide feedback.
  • Amusement Parks: No-swipe ticket passes eliminate the need for scanning and swiping in ride lines, reducing wait times and lowering staffing costs. This data can provide rich information for tracking the movement of visitors throughout their parks.
  • Casinos: Robbery-proof chips for loss prevention can log how much you spend and where you spend it–using that information to keep you in the game longer with well-timed drinks and services catered to your activity.
  • Sports: Loss-resistant golf balls use RFID to efficiently track the location of golf balls on driving ranges or on the course.
  • Guns: Safety products in the world of firearms include RFID-enabled gun safety products that only enable someone carrying the proper chip to unlock the gun or its storage container.
  • Car Rental: No-waiting vehicle returns via RFID are possible through localized, on-the-lot tracking.
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