How It Works

The Radio Frequency Identifications (RFID) uses very small chips, called RFID tags. The RFID tags are produced fairly easy and may be activated with special RFID printers. Then they are affixed to an asset. When this asset needs to be tracked RFID readers emit radio signals (hence the name) that activate the tag.

The RFID tag now sends information about the asset it is fixed back to the RFID reader. Now, this digital information is gathered, processed and turned into usable data by RFID software solutions. The collected data greatly improves asset tracking in real-time. Actually, it is this technology that makes asset tracking in real-time possible.

The RFID technology has been with us for quite some time – more or less since WWII. Today it is used in a variety of industries with great success. However, it is probably the RFID asset tracking and the derived from that RFID inventory management, where RFID has brought the biggest added value. Having said that, the advantages of setting up RFID systems also come with some disadvantages. Here is the comprehensive list:


The list of the advantages, which the RFID technology brings to asset tracking in real-time seems to be longer than that of the disadvantages.

Simultaneous Scanning Of Multiple Tags

Unlike the competitive technology of barcode asset tracking, RFID readers can “read” the data from multiple tags simultaneously, not individually. As trivial as this may seem, it is this ability alone that raises the efficiency and speed of the asset tracing made possible with the RFID technology. This also provides the possibility for the full automation of the asset tracking process.

Automation Of The Process

Prior to the RFID technology, asset tracking was done mostly manually. If any automation was possible it was using barcode readers. These however needed to read the data for each tracked asset individually. The RFID technology allows for the full automation of the asset tracking process.

All that is necessary is the correct set-up of the RFID system, the proper placement of the RFID readers and the streamlining of the received data. In order to give a simple example – just imagine the anti-theft RFID tracking system at work in your local shopping centre. The only role of humans in this process is to remove the RFID tag once the given asset has been bought and paid for. 

The full automation of the process provides also the opportunity for employees to do some more rewarding work, rather than the tedious tasks relayed to the RFID system.

Reduced Costs For Labor

The RFID technology automates a tedious process formerly done by humans. With fully automated RFID solutions manual labour is reduced considerably or eradicated altogether (note the example above). With much fewer workers engaged in the tracking of stocks, the cost of labour dramatically decreases. Usually, the only labour cost for the RFID system is the expenses for the RFID specialist who sets up and maintains the system.

Greater Accuracy

It is a common fact that humans are prone to mistakes and digital systems – not. As human interference is greatly decreased, especially in fully automated RFID systems, the chances for errors is brought down to zero.

But it is not only that. With full automation of the asset tracking now it is possible to track every single asset on every step of its lifecycle all of the time. This provides for absolute real-time accuracy, which other technologies just cannot provide.  

Improved Asset And Inventory Management

Each of the enumerated benefits above is good in itself. However, when put together they provide a much more efficient and effective method for total asset management. If we know everything we need to know about our assets, then we can greatly improve our inventory management. This, of course, is followed by many other benefits like improved efficiency of the whole enterprise, reduced costs of inventory, faster turnover of assets, increased competitiveness, etc.


Sadly, there are also some cons to setting up RFID systems for asset tracking.

Big Infrastructure Needs

The RFID technology is relatively specialised. Hence it needs all of its components in place in order to work. All of the elements of the RFID system – the RFID tags, the RFID readers, the RFID printers, the RFID solutions need to be in place in order to receive the benefits as described above. These are rather big demands for initial set-up.

High Initial Costs

The big infrastructure needs, as described above, will need to be paid for. This suggests a considerable upfront investment. It is true, that out of the reduced costs this investment will pay for itself, but still, the investment for the infrastructure is needed.

High Costs For Scaling

The scaling of the RFID process spells out the need for more RFID infrastructure yet – more RFID tags, more RFID readers, more printers, and so on. None of these can be substituted by any other technology – for example in the competitive technology of bar codes, they may be read by normal smartphones with just a simple app. This means that the scaling of the RFID asset tracking will require just as much investment in infrastructure as the initial set-up of the system. 

Security Of Rfid Data

As with all processes which generate or rely on digital data, the RFID process may be compromised by hackers. RFID tags may be read by alternative RFID readers and then their information tampered with. This makes the issue of data security important. Only specialised RFID companies may help in the protection of the RFID systems. Sadly this is but another cost.


All good things do come at a price. Whether the advantages outweigh the disadvantages is a decision left to each one. As RFID technology is spreading like wildfire in recent years, it seems that most of the enterprises see a greater added value from the technology than the setbacks.