RFID Applications in the Supply Chain Industry


Imagine the ideal manufacturing and distribution process. Would it eliminate human error and improve speed and efficiency? Would the availability of information increase? Would it offer greater security and transmit data without a network connection?

In most manufacturing and distribution environments, the main challenge is to produce and move large quantities of items quickly, with the least amount of handling and most efficiently and as cost-effectively as possible. One of the newest technologies developed to manage the distribution of large quantities of items is radio frequency identification (RFID). It solves the logistical problems that may affect manufacturing and distribution in the company.

What is RFID Technology, and How Do They Work?

RFID technology consists of a radiofrequency device that communicates with a tag (a tag that contains an integrated chip or processor and an antenna). The reader is usually portable and allows reading the information on the card automatically, reducing manual scanning of exception management. 

The critical element of this system is flexibility, especially when considering the operational changes produced over time, as well as the need for information, industry production standards, customer requirements, and other variables.

There are several types of RFID systems, but they all have the following fundamental elements in common:

  •   Labels (which are attached to the objects you wish to identify)
  • Readers (who are responsible for receiving the radio signal and transmitting it in an understandable way to a computer)
  •   Antennas (which act as a link between the labels and the reader)
  •   Software (which allows managing the information received)

What Are RFID Tags?

RFID tags are an easy way to identify a product or object so that they can be detected wirelessly, which guarantees its traceability. They have a built-in chip (there are several models with different memory capacities) to which the information deemed necessary in each case is added. They are printed and engraved with printers specifically designed for it. RFID tags can be used as security tags to prevent theft, aid inventory management in stores, hospitals, etc. They can also be used as a dual interface technologies for access control systems in schools, transportation, warehouses, etc.


There are various kinds of RFID tags:


  • Passive


They are the most common type of label, and they are called “passive” because they do not have their own battery. They are short-range labels (audible signals from 0-15 meters away). Anyway, they offer very interesting advantages, such as the possibility of being manufactured in an extremely small size or having a more competitive price


  • Active


They have their own power supply, which allows them to extend and emit their signal over a longer distance.


  • Semi Passive


As with passives, it is the RFID reader that emits a signal when it wants to communicate. The characteristic that makes them different is the small built-in battery to power the chip and store information and respond more quickly and safely

RFID Application in Supply Chain

One of the fundamental applications here is aimed at the global improvement of the supply chain, automating, simplifying, or even eliminating the identification and data capture work at different points in the chain, thus guarantee traceability. 

To carry this out, RFID tags are placed on all the products that we want to control, in order to obtain information about them in each of the processes. Many benefits derive from this simplification, such as increased productivity and efficiency, or reduced operating costs. 


  • Inventory Management


Proper inventory management is essential for the proper functioning of any company. It is possible to manage the inventory procedure in real-time, automatically, with the help of RFID technology: you can provide each of the products that you have stored with a unique identifier, thus avoiding duplication and mismatches; you will easily obtain relevant information about the stored products, as well as their location; and you will have a more accurate and always updated stock. Thus, you can save time, decrease costs, and increase productivity while avoiding errors and preventing unnecessary expenses.


  • Retail


Retail is one of the sectors that has obtained the most benefits. The RFID adhesive labels that are placed on the products help us to know the exact location of each item at all times, and to store relevant information about it. This greatly simplifies inventory management, preventing stock breakage.  These labels can also be used as an anti-theft system: they are only deactivated when they go through the box; a detection arc will notify the alarm in case someone tries to take a product without paying. 


  • Logistics


Logistics processes have undergone a positive change thanks to RFID systems: the interaction between manufacturing, distribution centers, and stores is much more agile and effective. It is possible to massively and reliably identify the goods received, avoiding having to verify the information manually. Also, warehouse management is improved by being able to leave and collect merchandise in an automated way. It is also possible to reduce the time of preparation, preparation, and collection of orders and easily detect any type of error.

Benefits of RFID

RFID is a very good business tool, and useful in effectively managing the supply chain, expanding company margins and profits, and reducing operating costs. Here are a few general benefits of RFID technology:

  •   Smooth business operation and accurate knowledge of inventory status.
  •   Increased productivity and performance of resources.
  •   Cost reduction that allows setting lower and more competitive prices.
  •   Reduction of the order cycle.
  •   Speed in shipments.
  •   Better management and control of inventories.
  •   Reduction in manual operations, which results in the need for fewer employees for inventory control, monitoring, and administration.
  •   Improves and facilitates customer service.
  •   Minimize errors.



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