Are you ready to take your inventory management needs to the next level? RFID inventory system can help you improve visibility and enhance inventory accuracy and tracking, giving you greater overall control.

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RFID inventory management helps streamline inventory tracking and reduce labor expenses. If you are yet to dive into the world of RFID inventory systems and their associated inventory management software, this article will be a great starting point.

What This Article Covers

• What Is an RFID Inventory System?
• RFID for Inventory Management
• Pros and Cons
• RFID vs. Barcode Labels
• Conclusion

What Is an RFID Inventory System?

Radio-frequency identification or RFID is the digitally encoded data in smart tags that use wireless transmissions to track and identify items. From complete inventory visibility to maintaining stock counts, an RFID inventory system helps generate real-time access to inventory levels, stocktaking capabilities and order/purchase summaries. RFID inventory systems help streamline and simplify the inventory process by eliminating manual counts.

An RFID primarily consists of two parts: tags and readers. Let’s take a detailed look at them!

RFID Tags

Used for stock control, RFID tags are integrated circuits that use a microchip attached to an antenna to transmit and receive data. With the ability to store a wide range of information and provide faster scanning, RFID tags can be active and passive.

An RFID lacking a battery source and powered by a reader is typically passive and used for RFID inventory tracking. Passive tags are economical to use in supply chain management (SCM) for access control and file tracking. It comes in two forms, hard tags and inlays.

Active RFID tags have an internal power source and come with three to five years of battery life. It comes in two types, transponders and beacons, the former being more battery efficient. Besides that, an active RFID has three main components: an interrogator, an antenna and a tag.

RFID Reader

Also known as an interrogator, the RFID reader is a network-connected portable device. It uses a radio-frequency signal generator to generate radio waves while transmitting signals to activate and detect information from tags. It is controlled by a microcontroller and is mainly of two types: fixed readers and mobile readers.

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RFID for Inventory Management

Inventory management is integral to most businesses and is all about sourcing, storing and selling items. Inventory tracking is essential here to estimate profits and restocking. This is where the use of RFID inventory management systems comes into play.

RFID inventory tracking effectively monitors items in real-time by labeling each item with an electronic chip. It uses wireless communication to transmit data from tag to reader and helps track items from production to point-of-sale.

According to a MarketsandMarkets study, the RFID market is estimated to reach $35.6 billion by 2030 from $14.5 billion in 2022, growing at a CAGR of 11.9%.

The RFID inventory system is diverse, spanning various industries from health care to retail, military, security and other fields. Retailers, manufacturers and wholesalers use RFID inventory management to optimize their inventories.

An RFID inventory system uses automation to collect and document data to conduct real-time asset counts, provide estimations based on said data and perform advanced inventory transactions. Some of its other uses include:

• Stock control as it proactively averts over- and under-stocking of items.
• Quality control by providing back-stock guidance to keep track of items with limited shelf life.
• Stock security by deploying tag-readers at high-risk points to enable alarms.

Now that you have a brief overview, it is evident that RFID for inventory helps enhance efficiency and streamline processes. Before investing in one, it is essential to know the pros and cons and thus eliminate the risk of selecting the wrong software.

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Pros and Cons

Depending on an organization’s size, capabilities and infrastructure, it is ideal to look deeper before investing in an RFID inventory system. Exploring its various advantages and drawbacks lets you take control of the process before you invest.

Let’s take a closer look at RFID inventory management systems’ pros and cons:

Pros

RFID inventory systems offer quick scanning, improve visibility, reduce manual labor and automate inventory control, resulting in increased inventory accuracy. Discussed below are some of the advantages you can expect when you invest in an RFID inventory system:

• Enhanced Visibility: RFID offers a long-read range to provide an overview of the supply chain. Unlike barcode scanners, it does not require a direct line-of-sight to scan and thus improves visibility by accessing data from a distance.
• Faster Scans: You can use RFID readers to scan multiple tags and process shipments efficiently. It uses automation to help identify and catalog data swiftly.
• Reduced Labor Costs: You can mitigate manual labor with automation and quick scans. It expedites processes like shipment verification, inventory tracking, counting and check-ins.
• Improved Asset Tracking: Tags assigned to each item help facilitate RFID inventory tracking. Automation helps avoid theft and employee negligence by tracking products in real time.

Cons

The RFID inventory system offers some excellent benefits but has some underlying disadvantages. Let us look at some of the cons:

• Limited Security: One of the primary constraints of an RFID inventory system is its lack of security. Unauthorized parties can clone RFID tags without a proper authentication mechanism and copy a tag’s data using a smartphone.
• Expensive Integration & Implementation: The set-up for an RFID inventory system can be expensive, given its various infrastructural changes. Integrating scanners and tags while investing in employee training programs to learn the new processes can be costly.
• Scrambled Signal: Since it functions on radio frequency, signals can often overlap, jam or disrupt, thus lowering the usability of an RFID inventory system.
• Ongoing Maintenance: An RFID inventory system must be routinely updated, i.e., investing in specific RFID readers and tags, to function efficiently. Set-up and ongoing maintenance charges aren’t too cost-effective.

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RFID vs. Barcode Labels

RFID and barcode labels serve the same purpose of tracking assets, storing information and uploading data to a database. The differences between the two are nuanced so let us take a deep dive into the various aspects of RFID inventory management and barcode inventory systems.

• Line of Sight: RFID uses radio frequency to communicate wirelessly and transmit data and thus, isn’t required to be within the line of sight to scan. In contrast, barcode scanners need to be in direct view to read labels.
• Durability: RFID tags are reusable and durable as they are typically encapsulated in a metal or plastic coating. Barcode labels can get easily eroded and damaged due to dirt, grease, excessive handling, etc.
• Read Rate: When it comes to RFID tags, multiple items can be scanned simultaneously and at a faster rate than barcode scanners. Barcode scanners can only scan tags individually within several inches to feet.
• Overwrite Tags: RFID tags offer the ability to modify or rewrite data of any given item with new information. Barcode information cannot be changed or written over.
• Cost: RFID tags are more expensive than barcode scanners, which you can easily produce and print onto plastic or paper.
• Labor: Using RFID technology isn’t labor-intensive as it implements automation. Barcodes, on the other hand, require manual labor to operate and retrieve data.

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Conclusion

Do you handle large stock quantities? Are you looking to streamline your inventory processes? If both your answers were affirmative, then look no further!

Be it in any industry — retail, health care or warehouse — implementing an RFID inventory system bolsters inventory accuracy and efficiency.

Do you already use an RFID inventory system or plan to invest in one? In what ways has it served your inventory management processes? Let us know in the comments below!