What is RFID technology

The pending RFID revolution is here

RFID, or Radio Frequency Identification, is not a new technology. However, like all technologies, its large-scale implementation depends to a large extent on its costs being reduced over time to the point of being widely adopted. For this reason, after several decades of existence in the world of logistics, RFID technology seems to be about to take the leap and become widely used.

RFID technology is a system that allows data to be stored and retrieved remotely and to install these systems on cards, labels or on a wide variety of objects. The main use that has been given to RFID so far is that the objects carried by these systems can be easily and accurately identified, as well as being able to obtain and store additional information.

There are two main types of RFID tags: passive and active. The passive ones are those that do not have their own power supply, so they depend on using part of the energy that comes from the RFID readers to transmit the information that is housed inside. For their part, the active ones do have their own energy source. Due to the low consumption, these can last for several years, both in a state of rest and when it is transmitting information to the RFID receivers. There is a third intermediate type, the semi-passive ones, which use their energy to power the microchip but not to transmit a signal.

What difference to RFID

The closest relative of RFID, or at least the one that receives the most similar use in logistics, supply chain and the retail sector (among others) is the barcode. Due to its very low cost, its implementation has been -and continues to be- a widely accepted standard throughout the world. However, the differences between the two are substantial.

Barcodes allow us to identify which product model we are dealing with, but cannot individualize it; that is, it knows what model of jersey it is, but not what specific jersey we are dealing with. On the contrary, RFID technology does make it possible to identify, one by one, each of the products or materials in which we place these devices.

Another important difference is that RFID allows more data to be stored. While barcodes only identify the product, RFID tags allow more information to be contained.

Also important from a logistical point of view are the differences when it comes to being read. Barcodes require to be read one by one and without obstacles between the label and the reader. RFID, for its part, can be captured effectively despite the fact that there is no direct line of sight with the reader and, in addition, it can simultaneously read several labels.


RFID improves inventory accuracy on average from 63% to 95%.

Advantages of RFID

From the very beginning, RFID caught the attention of the world of logistics and supply chain. Current applications are already very diverse and are expected to continue to grow and evolve with time and the development of technology associated with RFID systems.

One of the points that has most focused the development of RFID is traceability. Automation -eliminating human errors in reading tasks- and the precision to know and collect information on where our merchandise has been facilitates its monitoring and the long-awaited transparency of the supply chain.

In addition, if we consider it appropriate, we can also label our merchandise package by package (or article by article), to have even greater control, and that they can be read without the need to assemble and disassemble the pallets.

Reading better and easier also improves our inventories. According to the RFID Laboratory at Auburn University (USA), RFID improves inventory accuracy on average from 63% to 95%.


Among the consequences of an improvement in inventory management is the increase in sales. Knowing more accurately the status of our inventories helps us avoid stock-outs and better predict demand for the future. This directly translates into an increase in business volume, since we will reduce the occasions in which the customer cannot buy from us due to our products being unavailable, taking too long to wait or not being on the shelves.

Another logistical use to which RFID technology is contributing is the preservation of the cold chain. This is because they can store a record of the temperature of the products, in order to confirm that the cold chain has not been broken, and send a warning in case the temperature rises and is close to reaching the established limits.

In the retail sector and in department stores, RFID technology has been used for a long time as an anti-theft measure. That is to say, the traditional stickers that we all know and that beep when leaving and passing between the detector arches. And it is an advantage that can also be transferred to logistics.

Another common use is for automatic payment at highway tolls, where our vehicle is detected automatically when passing by, remitting us the corresponding charge. This same principle can be extrapolated to install RFID that allows access by cars, trucks, etc. to restricted areas (restricted access areas or times, companies, industrial estates…).

The future of RFID

New applications for RFID continue to be developed every day, but how widespread is its use already? To get an idea of its growth, it is illustrative to see the number of RFID tags sold in recent years. 3,000 million in 2014, 3,900 million in 2015, 6,100 million in 2016 and it is estimated that in 2017 they have reached 7,900 million.

It is not the only data that shows its development. Retail giant Macy’s aims to tag all its products with RFID this year and, according to a study by the RFID Laboratory at Auburn University, 96% of retailers have plans to use RFID in their businesses.

As we have commented, the decrease in cost has been essential for the explosion of RFID. According to data from Forbes, since 2003 the price of an RFID tag has gone from around one dollar to around 10 cents (about 0.09 euros) today.

As your deployment increases, the greater your benefits will be. It is very common today that supply chains work with RFID products but that in various sections this is not taken into consideration. That is to say, it may be that at origin and/or destination they are going to make use of the advantages provided by RFID but that, among other points in the supply chain, this type of reading is not carried out. A necessary step for the complete traceability of the merchandise.

RFID has not just been born and there are many companies that have been making the most of it for years. However, the universalization that it can achieve in the near future may mean a great leap for its importance in the world of business and logistics.

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Khaterine William

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