What is RFID?

Radio Frequency Identification (RFID) is a wireless non­contact use of radio frequency electromagnetic fields to transfer data in order to identify and track tags attached to objects automatically.

An RFID system is made up of two parts: a tag and a reader (also known as an interrogator). Just as with a barcode, the information embedded in an RFID chip is stored in a database by the RFID reader.

The most notable difference between RFID tags and barcodes is that RFID tags can be read outside the line­of­sight, whereas barcodes must be aligned with the optical scanner to work. This means that RFID tags can be embedded in the object that needs to be tracked.

Types of RFID tags

There are two types of RFID tags; active and passive. Active RFID tags have a local power source, like a battery, and can operate hundreds of meters away from the RFID reader. They are constantly transmitting data.

Passive tags don’t have a local power source and instead take energy from the interrogating radio waves of a nearby RFID reader. A passive RFID tag needs to be “powered up” by a nearby reader before it can transmit data.

How does RFID work?

RFID is a method of Automatic Identification and Data Capture (AIDC). AIDC technologies automatically identify objects, collect data about the objects and enter that data into computer systems with little or no human intervention.

Simply put an RFID system consists of three components: an RFID tag or smart label, an RFID reader and an antenna. The RFID tag contains an integrated circuit and an antenna that transmit data to the reader.

The reader converts the radio waves to a more usable form of data, and the information collected from the tags is transferred via a communications interface to a host computer system. There the data is stored in a database and can be analysed at a later time.

How is RFID used in business?

RFID technology is used in many industries to perform tasks such as inventory management, asset tracking, counterfeit prevention, ID badging, personnel tracking, controlling access to restricted areas and supply chain management.

  • An RFID tag attached to a mobile phone enables its tracking through the assembly line and shipping process until it reaches the customer.
  • Pharmaceuticals embedded with RFID chips can be tracked as they are shipped from one warehouse and arrive at another.
  • The microchipping of pets and livestock is one of the oldest uses of RFID technology and is widely implemented to allow the identification of individual animals.
  • RFID passports (“e­passports”) use RFID tags to store information about the passport holder as well as record the travel history (time, date, and place) of entries and exits from the country.

RFID technology has a wide variety of uses

On off­shore oil rigs and gas platforms, RFID tags are worn by personnel as a safety measure. The tags allow the workers to be located 24 hours a day and, in case of an emergency, be found quickly.

In retail RFID tags are most commonly used for item­level tagging. In addition to inventory control, this provides protection against stealing, shrinkage and enables secure self­checkout for customers.

Ski and event passes can also be embedded with RFID technology. Social media platforms are currently using RFID tags in their events to allow guests to capture and post photos automatically. Car manufacturers have widely adopted RFID technology for their social media marketing at car shows.

Why are companies moving from barcodes to RFID technology?

Automation is the main reason driving the increased adoption of RFID. Mass reading tags increases efficiency while decreasing the amount of manual labour that is involved in reading optical tags individually. As financial markets demand that companies use capital more effectively, and large retailers require suppliers to have RFID­readable inventory, more and more companies are moving from barcodes to RFID technology.

RFID tags offer many advantages over barcodes. RFID tags can hold much more data, and they are not susceptible to the damages that barcodes are, such as tearing or smearing.

RFID in fashion & apparel retail

Fashion brands are using RFID technology to re­invent their customer experiences. Picking up a garment embedded with an RFID chip can trigger an interactive video about how the garment was made. RFID­enabled dressing rooms can now identify what items customers are trying on and suggest complimentary items in the interactive mirrors. Digital concierge walls help customers find assistance (or a drink) and coupled with tablets RFID tags give customers a seamless checkout experience.

Data about what garments a customer tried on can be combined with their buying history and shopping preferences to analyse customer likes and tastes. Sales associates assisting customers in the store can access this information via computers and tablets to deliver a truly personalised experience to shoppers.

Retailers are quickly adopting item­level tracking for accurate visibility of each item. With RFID tags attached to merchandise, staff can quickly and accurately locate the items required. Leaving the customer with a positive experience, and confident that the store will provide them with what they were looking for the next time as well, makes selling – including cross­ and upselling – easier. It also increases customers’ brand loyalty.

Nearly 15 million pairs of shoes and 10 million garments ship from manufacturers yearly. The cost of conducting manual inventory, managing out­of­stocks and preventing theft continues to rise. As the installation barrier gets lower and shoppers’ expectations get higher, retailers will increasingly adopt RFID technology.

RFID in hospitals and libraries

RFID technology has traditionally been one of the most expensive identification methods available. However, with recent developments, this labour saving technology has become viable for different uses within businesses.

Health care is one field that can benefit greatly from implementing RFID technology. Combining RFID tags with existing databases, nurses and doctors can gain access to real­time updates about patients’ statuses, eliminate unnecessary check­ins and monitoring procedures as well as better cope with large volumes of patients. One hospital managed to reduce patient discharging times from six hours to six minutes.

RFID technology can also be used to track and authenticate pharmaceutical inventory, track attendance of staff as well as control access to restricted areas. Tools embedded with RFID tags can be tracked through the sterilisation process to ensure all tools are properly treated. Disposable inventory can be managed more efficiently with RFID, reducing out­of­stocks for critical items like gauze, disposable gloves and plastic vials. Portable equipment can be located more easily and critical functions, like laundry, can be more effectively managed with RFID.

Libraries can make sustainable investments that bring considerable ROI and savings. Currently, barcodes are the standard technology in use. In a library with 3 million loans per year, each loan needs to be scanned manually, both when leaving and returning to the library. If each book takes 2 seconds to scan this accumulates to over 3,000 hours per year spent on scanning alone.

With an RFID system, several books could be scanned at once, saving time and reducing queue times. By installing an RFID compatible sorting machine the library could enjoy further savings as the books could be sorted into the correct carts automatically, rather than have library staff sort returns manually.

Misplaced and missing items are common in libraries. With handheld readers, librarians could quickly check if a shelf has missing or misplaced books resulting in quicker inventory control. This process could even be made automatic by equipping shelves with RFID readers.

Benefits of RFID tags when compared to barcodes

  • No need for line­of­sight to read tags.
  • RFID tags can be read at a greater distance, 20­600 metres.
  • Readers can process multiple RFID tags at once, up to thousands of tags per
    second.
  • RFID tags do not need to be placed in a standard position on the product packaging
    since tags only need to be in range of the reader.
  • The content on RFID tags can be changed several times (rewritable tags).
  • The lifetime of an RFID tag is 10 years or more. Passive tags ideally have an unlimited service life.
  • RFID tags can store larger amounts of data.
  • RFID tags can be programmed for smart behaviour instead of just data storage.
  • RFID tags can hold encrypted and unencrypted data at the same time as well as
    utilise passwords to access stored data, providing a higher level of security.
  • RFID tags have high durability and resistance to harsh environments.

Is RFID reliable?

A lot of retailers, logistics companies and manufacturers express concerns about RFID not being able to read every single tag, every single time. Manual counting, such as scanning a barcode, is never 100% accurate either, but RFID is far more accurate than barcode technology.

A manufacturer would never try to read every bar code on a pallet going through a loading dock door, but insisting that RFID technology has to be used in this way is ignoring the possibilities of how RFID systems can be used to create more value. Manufacturers can collect the information needed to improve their operations by reading RFID tags on cases, hands­free, as those cases are being stacked onto the pallet.

Improve inventory accuracy with RFID

Most retailers will admit to having an inventory accuracy of around 60­70%. A single handheld reader coupled with fixed readers at the receiving area, the replenishment area, and the door between the back room and retail floor can boost inventory accuracy to 99.9%. Furthermore, RFID scanning with a handheld reader is about 25 times faster than barcode scanning.

The only time RFID needs to be 100% reliable is when a financial transaction is involved. In most cases, it is, and that is why MasterCard and Visa trust the technology enough to use it in credit cards.

Is RFID feasible with high volumes?

Apparel retailers were the first to adopt RFID for high­volume operations. Starting in 2017 many retailers have announced that they will fine suppliers, manufacturers and brands for both noncompliance and incorrect merchandise information accompanying shipments.

RFID technology is ideally suited to handle large volumes of items. As the tags do not need to be positioned in view of the readers, only be in the range of readers, thousands of tags can be read at once.

Reading high volumes of tags

Readers must isolate a single tag, communicate with it and move to the next one, since they cannot communicate with two tags simultaneously. This happens so quickly that it may seem simultaneous, even though it isn’t.

The interrogator asks a tag to respond depending on a number unique to that tag. If two tags respond, the reader asks again in a slightly different way and it will continue in this manner until only a single tag responds.

For instance, a reader can ask all tags with a serial number beginning with 0 to respond. If more than one tag responds, the reader asks all tags that have serial numbers starting with 00 to respond, and so on until it has isolated the tag it was looking for.

Reducing out­of­stocks with RFID

Large retailers have from the beginning recognised that distribution is a crucial part of success. In a comparison of twelve RFID pilot stores with as many control stores, RFID technology managed to reduce out­of­stocks by 16%. The out­of­stock inventory was also replenished three times faster in the stores that deployed RFID technology than in the control stores, resulting in increased sales and customer satisfaction.