Accurate tracking. Real-time visibility. Fast and easy inventory management. These are just a few of the reasons why RFID tag and label technology has dramatically transformed the way modern companies manage inventory and data.
With so many benefits, your label customers may be curious about transitioning to an RFID-based system. While RFID technology offers powerful advantages, it also comes with costs and considerations that make it better suited for some applications than others.
As your trusted label partner, General Data is here to help you understand when RFID tags and labels make sense—and when they don’t—so you can guide your customers toward the best solution for their needs.
What Are RFID Tags and Labels?
Each RFID (Radio Frequency Identification) tag and label is embedded with a microchip and small antenna, which enables it to transmit data to an RFID reader wirelessly using radio waves. The labels can include detailed, variable information such as the product name, price, serial numbers, supply chain data and even the location data of an item.
Unlike traditional barcode labels, which require a direct line of sight with a barcode scanner, RFID tags and labels do not require a line of sight - they can be read from a distance at various angles and even through certain materials. Multiple RFID labels and tags can be scanned simultaneously, and the data they store can be updated in real-time. With their combination of convenience, accuracy and speed, RFID tags and labels are commonly used in retail inventory environments, warehouses, fulfillment centers and healthcare environments.
RFID technology offers impressive capabilities. But before your customers make the investment, it’s important to find out whether it’s really the right solution for their needs and application.
Let’s first talk about active and passive RFID tags and labels, and the difference between the two. They both use radio-frequency identification (RFID) to track and identify objects wirelessly, but they differ primarily in their power sources, operational range, cost, and applications.
“Passive” RFID labels and tags have no internal battery and rely on energy sent from the RFID reader to power up and transmit data. “Active” RFID labels and tags, in contrast, include a built-in battery or power source that allows them to actively and continuously broadcast signals without depending on the reader for energy. Passive tags and labels have a shorter read range – from a few inches out to around 80 feet (depending on environment, antenna, type of reader, etc.), where active tags can have a read range of hundreds of feet. Active tags are more expensive, heavier and bulkier due to the battery. Active tags can store more data and transmit it continuously or at intervals, where passive tags are more limited in data storage and transmit only when the reader activates the tag.
For the purposes of this blog post we will focus on “passive” RFID tags and labels as they are more commonly used in applications such as supply chain management, inventory, and access control.
When Are RFID Tags and Labels the Right Fit?
Like any technology, RFID labels and tags deliver the best results when matched to the right application, environment and operation.
Implementing an RFID tracking system is especially effective when your customers work in:
- High-volume inventory environments with thousands of items moving in and out each day.
- Manufacturing, logistics and distribution centers that require clear visibility across complex workflows and supply chains.
- Healthcare settings that rely on accurate tracking of equipment, medication, lab samples and sensitive patient information.
- Large organizations where shared tools, equipment or assets move frequently and need to be located.
- Retail environments where inventory counts need to be done frequently and accurately.
- Compliance mandates where a large customer requires that products or shipments are sent to them with an RFID label/tag.
Most often, RFID delivers the greatest value in large, complex data-driven environments where visibility, speed and accuracy are crucial. If your customers fit that profile, an RFID-based system may be a good fit for them.
While RFID offers clear advantages in speed and accuracy, it also comes with a few limitations to keep in mind, including:
- Budget: Cost is by far the biggest hurdle when adopting an RFID system. RFID labels are more expensive than barcode labels, and a full system requires compatible RFID printer/encoders, RFID readers, software and data storage infrastructure.
- Metal and Liquid Obstruction: Most RFID inlays can’t read through metal or liquid. Specialized inlays are available, but more costly. The label experts at General Data can help you navigate alternative solutions, such as using a hang tag instead of applying the label directly to the surface.
- Digital Infrastructure: RFID systems produce a large volume of data. Many organizations find they need to update their digital infrastructure to handle large-scale processing and storage.
- Implementation Timeframe: RFID setup requires testing and fine-tuning. Many companies underestimate the time needed to configure their new system.
- Inventory Size: The benefits of an RFID tracking system scale with the size of your inventory. For smaller operations, the cost may outweigh the benefits. However, along with inventory tracking, RFID can still be valuable for specific applications like equipment or tool tracking.
Ultimately, it’s important to fully understand the costs of implementing an RFID system. At General Data, we always recommend customers perform a detailed ROI analysis before investing in an RFID system to get a good idea of the potential cost and time savings gained by using RFID technology.