How RFID Tags increase visibility for inventory management

How RFID Tags increase visibility for inventory management

Every day new technologies emerge to assist companies in various sectors, as well as their consumers. Among them, the RFID technology stands out, especially when RFID tags and data collection systems are widely used to increase visibility accuracy for inventory management.

Perform a full physical inventory of products to count and report inventory is a common task, whether it’s in retail stores or in warehouse.

Not only can RFID tags be read in bulk when tagged to inventory products, but these can also be without the need of sight. Speeding up the inventory cycle counts with high data accuracy, while preventing manual errors – that are common when using QR coders or barcodes.

For instance, retail stores must have an effective inventory management to ensure sales and prevent shortages. That’s why many retail giants like Walmart and Macy’s use RFID labels and tagging to increase their inventory visibility.

For inventory management purposes, RFID tags require a link to radiofrequency identification (RFID) systems, and this can be composed of either fixed or handheld antennas and readers. The RFID chips placed inside of the RFID tags can be also used to store data – such as, the item’s pictures and important information.

By reading the RFID Tags, the RFID system will be identifying each item to track and monitor changes in the item’s position, quantity, and location, as well as offering integrations with ERP or WMS systems.

Below you may learn more about RFID tags, how this technology works, and their importance and help in the logistics of companies, underling the key importance of the RFID technology for inventory management.

What is RFID technology?

RFID ( Radio Frequency Identification) technology transmits data and information by radio frequency.

RFID has become popular and is increasingly used in various segments. That’s mostly because the use of RFID technology provides sightless long-distance reading capabilities. This can be widely apply to generate efficiencies and automate inventory cycle counting.

How does the RFID system work?

The main characteristics of the RFID system go as follows:

  • Antenna is responsible for transmitting the information to the reader. This RFID antenna can be either fixed or handheld.
  • A reader will be receiving data from the antenna and converting it into radio waves;
  • RFID tag contains a chip to respond back to the radio waves
How RFID Tags increase visibility for inventory management

What is the RFID tag?

RFID tags contain a radiofrequency chip, which is responsible for responding to radiofrequency stimulus coming from antennas. To track and monitor changes in inventory, RFID tags and labels can be applied to metal and non-metal objects.

How does RFID work for warehouse inventory management?

By applying the RFID tag to each inventory item or pallets, any changes in item’s movement and quantity can be verified by the antennas and readers. The RFID system and software can display and match information on a dashboard platform integrated with an existing ERP or WMS system, allowing warehouse associates to reconcile and report inventory data in real-time. The company may track and manage the entire inventory cycle from item’s inception until its delivery to the final customer.

How do RFID tags work?

RFID tags are also known as Smart Tags, which is a label that can electronically read items in bulk and store data. Another functionality of the RFID tags is to send locational info of the tagged objects. Common technologies existed in RFID Tags includes the microchip and the EPC format. While the microchip emits radio frequency waves – read by the RFID antennas -, the EPC format stores data in unique identification code (hexadecimal) known EPC.


The microchip in RFID tags store data and information about an item, such as:

  • Product Name
  • Expiration Date
  • Plot
  • Serial number
  • Company
  • Manufacturer
  • Item’s Picture
  • Documents and warrants

Along with the data storage function, the microchip also responds back to radio frequency stimulus transmitted by antennas and readers.

EPC format

RFID tags store data in EPC format, Electronic Product Code. This technology was created by the Auto-ID Center to replace the barcode identification. EPC is a low-cost method of tracking items while using RFID technology. Like barcode, the EPC format displays a numeric system to identify and register products. Though it has a much greater capability than its predecessor in adding specific information, such as product origin and destination. One of the benefits is that EPC comes with a unique identification code format. This means that EPC in RFID Tags can prevent counterfeit items, as consumers can also monitor and track their products traced back to purchase with the supplier.

Amazon Go’s Case of RFID Tags In Stores

Amazon Go is an online store that differs from the other typical stores, since there aren’t cash registers and lines. The customer installs the Amazon Go app to choose items and pick up them at the store, while paying it via the app itself.

RFID system tracks and updates the item’s moments and information, as customers check out or return items, as well as updating the products to the customer’s virtual cart in real-time. All the store’s products are tagged with RFID tags for inventory management, while enhancing the company’s competitive strategy.

Through this RFID system, the store managers and associates are able to keep track of the stock levels, reconciliation and each item’s location. This provides information and inventory reports, followed by the bulk scans of items with RFID. Additionally, detailed database with the item’s movement (check in/out) history and logs.

What is the difference between active RFID tags and passive RFID tags?

Passive RFID tags does not contain an internal battery to send the radio waves, like the active one. That means that this RFID tag can only be scanned and read by using an antenna – either fixed or handheld – and reader.

On the other hand, active RFID tags come with an internal battery to constantly emit radio waves, offering a longer read range and real-time connection. Often, active RFID tags are more expensive and complex than passive RFD tags. Both RFID tags are widely used for inventory tracking.

How RFID Tags increase visibility for inventory management

How much does an RFID tag cost?

A complete RFID solution consists of hardware (antenna, handheld readers, rfid readers, etc.), software, and the RFID Tags. The hardware component encompasses the RFID equipment like antennas, readers, wi-fi, portals, while the software and systems integrate the reader and data collection abilities to dashboard or interfaces.

Generally, in the United States, the cost of an RFID tag can vary from 25 cents to 1 dollar each tag. RFID Systems and softwares are often priced on a subscription basis.

What are the types of RFID tags?

RFID tagging solutions depend on each application:

  1. RFID inventory labels (off-metal) can be applied to boxes
  2. RFID stickers can be applied to inventory products, so that customer can scan it and learn more information about the product
  3. RFID washable tags can be applied / sewn-in associate’s clothing to keep track of the item’s custody and movement
  4. RFID access cards can be used to control the access of people and vehicles in parking lots and companies, along with biometric readings.

What is the size of RFID tags?

The size of RFID tags can vary, but, in general, these are small objects. Tag dimensions will vary according to the purpose and type. For instance, RFID cattle ear tags for animal identification tend to be very small, with a dimension 0.12” x 0.40” (inches), while RFID cards for access control typically will be over 2 inches high.

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