Businesses are always on the lookout for methods of improving efficiency in their operations. For many, automation and technology are attractive choices, though some options may be prohibitively costly for smaller businesses. One option that has caught the attention of businesses of all sizes is radio frequency identification, or RFID.
RFID is a highly versatile wireless identification and tracking technology that can be applied at any level of the supply chain for businesses of every size. Businesses that have implemented RFID have found significant improvements in efficiency and cost reduction, among other areas. This article explains the details of RFID, how it works, the benefits of such a system and how to implement an RFID system in your own business.
What Is RFID?
Radio frequency identification is a type of wireless technology. In an RFID system, there are two key components — an RFID tag and an RFID scanner:
- RFID tag: An RFID tag or smart label consists of an integrated circuit and antenna. The tag is essentially a small microchip that contains encoded digital data and can pick up signals and transfer data using its antenna. While the microchip is extremely small, it can hold massive amounts of this encoded data, and that data can be changed or updated as needed. Data typically includes identification information, product data or other information depending on the application.
- RFID scanner: An RFID scanner is a specialized scanner that collects the information stored in the RFID tag. The information is transferred from the microchip to the scanner using radio waves, meaning that the scanner does not need a direct line-of-sight alignment with the chip to read it. The scanner can also pick up information from multiple tags at once.
A common example of an RFID system is pet microchipping. A pet microchip is embedded in a pet’s skin after it is adopted and stores information about the pet and its owner. This chip can then be scanned to identify the owner if the pet gets lost.
How Does RFID Work?
RFID technology works using radio waves and signals to collect and transfer data. When an RFID scanner is used, it sends out a signal, which the RFID tag picks up and responds to. The tag then sends out its encoded data over radio waves to the scanner. The scanner picks up these waves, converts them into useable data and transfers the data from the tags to a host computer system to store and analyze the collected data.
Specific RFID systems differ primarily in the types of tags used in the system. These are primarily organized by frequency range and whether the tag is active or passive:
- Low-frequency: Low-frequency RFID systems have shorter ranges and read data more slowly, but work well in environments with heavy interference from liquids and metals. These systems are commonly used in livestock management.
- High-frequency: High-frequency systems have longer ranges and faster data reading capabilities compared to low-frequency systems and are often used in hotel key card systems, payment cards and security systems.
- Ultrahigh-frequency: Ultrahigh-frequency RFID systems are used in situations that require extremely fast data transfer. Common examples include retail inventory management and anti-counterfeiting systems.
- Passive: Passive tags do not have their own substantial energy source. Instead, they use energy from the RFID scanner to reflect back a signal.
- Active: Active tags contain their own energy source and broadcast their signal at regular intervals, which a local RFID scanner can then pick up.
The type of tag system used largely depends on the needs of the specific application.
In theory, RFID technology is similar to barcoding in that a product is scanned to collect information. However, RFID chips are actual microchips that contain data, while barcodes simply provide a link to data stored on the internet. Also, RFID chips can be scanned at a distance without a line of sight. These two qualities mean that RFID chips do not rely on internet connections and are faster and easier to scan than traditional barcodes.
Benefits of RFID
RFID systems offer benefits to a range of industries and can be implemented in businesses of all sizes. Some of the key benefits for businesses include the following:
- Improved inventory tracking and management: Tracking assets and materials is a key function in any business at any point in the supply chain. RFID systems offer a faster and more reliable way of tracking items, as they allow multiple items to be scanned at once instead of counting or scanning individual items.
- Reduced labor investments: RFID systems automatically scan items and upload information into a computer system. With proper setup, this can remove the need for manual scanning, tracking and data entry, allowing labor to be redistributed to more value-adding functions.
- Maximized accuracy: By automating data collection and entry, RFID can minimize the potential for costly human error, such as transcription errors, data duplication and deletions.
- Enhanced traceability: Because RFID tags can be updated, they can track which processes a product has gone through. For example, an RFID tag can be updated when its associated product goes through inspection. Then the distribution center may verify that every product has gone through an inspection before sending out products to customers.
- Shortened turnaround: Integrating automated RFID processes can streamline processes by eliminating time-expensive scanning and tracking procedures, shortening turnaround times for customers.
- Improved revenues: By reducing labor costs and losses and maximizing efficiencies, RFID systems can quickly improve revenue, which offsets the implementation costs.
Businesses of all types can experience these benefits, and many industries are exploring the potential applications of RFID in new sectors. For example, the medical industry has been researching the benefits of applying RFID to improve workflows and prevent medical errors. Studies found that the use of tags with RFID technology in medical settings helped match medication with patients, streamlined physician workflows and even reduced instrument loss.
RFID is on the rise in a range of industries, most notably in retail, manufacturing and transportation. Applications of RFID today primarily focus on asset tracking, access control, payment systems and supply chain tracking, but new applications are emerging as the technology makes headway in more industries.
If you’re thinking of implementing RFID in your business, you’ll want to know what the process looks like. Here are the general steps for implementing an RFID system:
- Compare vendors: Find an RFID vendor that has experience working with companies similar to yours. If you’re a small business, look for vendors that have experience working with small companies.
- Identify applications: Determine where your business can benefit from RFID. Focus on one area at a time and determine what processes will need to be changed to facilitate implementing RFID. Once you have a plan, organize implementation into stages with your vendor’s help.
- Choose a system and equipment: Select a system frequency — low, high or ultrahigh — that meets the needs of your business, then select equipment that supports your business and processes. Work with your vendor to determine what types of tags, scanners, encoders and software will work best for your needs.
- Implement RFID in stages: Once your equipment arrives, test it thoroughly before deployment with the help of your vendor. Once you’ve worked out any major bugs or questions, begin with your step-by-step implementation plan.
To better understand RFID implementation and the common mistakes to avoid, download our “Five Mistakes to Avoid” article.
RFID Solutions From DataSpan
If you’re interested in implementing your own RFID system or improving an existing one, DataSpan is here to help.
Our tailored RFID solutions enable businesses to collect the data they need to make critical business decisions and leverage RFID to the fullest. We analyze existing applications and processes in a range of fields to help our customers get the most out of their RFID systems. We’ll match you with the optimal tags, hardware, software and professional services you need to develop an integrated and scalable RFID solution. From system design services and training to installation and integration, DataSpan is here to help.
Contact DataSpan today to learn more about our RFID solutions.