RFID is a type of auto ID technology that uses radio waves (as the name Radio Frequency Identification denotes) to identify, monitor and manage individual objects as they move between physical locations. So, RFID is a smart sensing technology. The RFID Technology has been compared with the existing and well-established competing Bar-coding Technology.


Radio Frequency Identification (RFID) is enabling companies to see further into the supply chain than ever before, providing more accurate real-time information and improvements in process efficiency. The increased visibility can result in faster inventory turns, less shrinkage, reduced labor and higher material flow through your warehouse or distribution center. Greater efficiency means RFID enabled

processes take less time and effort; entire pallets of product can be recognized in seconds without the need to break them down, and cycle counting inventory can be accomplished in hours or even minutes instead of days.

Components of RFID: There are two major devices supported by the interfacing software.

RFID Tag: It is a very small device having a chip that holds stored digital information and an tenna that communicates with the receiver.
RFID Reader: It is a comparatively larger device that communicates with RFID tags to check the stored data. When the RFID reader excites the tag using radio waves, the tag responds by transmitting the code that is stored inside it.


How does  RFID Technology work ??

For utilizing RFID technology, it is obvious that one has to tag all the concerned items, pallets or cases. This is also known as “e-tagging”. When these tagged objects pass through reader or scanner, data recorder on the tag is captured and scored in the computer. No line of sight is required for reading the data. Various combinations of these tags & readers can be availed in multiple situations. This leads 10 reduction of labour costs; more efficient business

processes and improves connections with business partners like suppliers. RFID devices and software are also to be supported by an advanced software architecture that enables the collection and distribution of location based information in real-time.


Tags or Transponders ??
RFID tags are barcodes having electronically programmed unique information. A finished tag encapsulates all the information and the small chip and the antenna mounted on it.

The tags can be applied to containers, pallets, cases or individual items. Tags can be classified based on three criteria: Power Source, Frequency and Encoding Method.
Depending upon the applications and environment, RFID tags have different range of durability. Paper-thin tags referred as “Smart Labels” can be used for disposable 

applications also. On these tags special Radio Frequency enabled printing is done.

Bar-coding V/s RFID:
Bar coding is the currently adopted technology. It seems that RFID and Bar coding are competing technologies. But, in fact, both the technologies are complementary to each other. It is more economical to replace the barcodes on every item with RFID tag. To start with ,both the technologies can be used simultaneously and gradually the whole infrastructure for RFID can be developed. The reason for advocating the usage of RFID is the significant advantage provided by it over and above the bar coding. Barcodes must be scanned at specific orientation to establish line of sight. But RFID does not require it. RFID tags need only to be in the range of reader to be read or scanned.

Barcode technology doesn’t work if label is damaged while RFID tags can withstand chemical and heat environment.
RFID tags have read and write capabilities and can be up dated while barcodes contain static information that can be updated by reprinting the code.
RFID tags can potentially contain a great amount of data compared to barcodes.
RFID tags do not require any human intervention for data transmission whereas barcodes do.


Advantages of RFID : The advantages to various stakeholders are as under :
  • Greater supply chain visibility through real-time monitoring of virtually any resource

  • Reductions in stock-outs, required inventory levels and unnecessary reorders

  • Automatic data harvesting to provide a foundation for more accurate forecasts, trend analysis and demand planning


  • Quicker reaction times to sudden fluctuations in inventory levels

  • Capabilities to keep a full audit train on each tag, and therefore each item or container

  • Ability to read multiple tags simultaneously through a variety of materials lets you perform non-invasive quality control instantly

  • Sharing EPC information quickly with a vast number of partners helps keep your efforts coordinated and accurate

Benefit to Customers :
  • Get information more than that given on packing
  • Relaxation from waiting in queue at checkouts
  • Hassle-free shopping by Interactive shelves and easy accessibility
  • Quicker response to requests made
  • Items can be located conveniently
  • Saves time
Benefit to Retailers :
  • Helps in inventory tracking without line of sight with much more accuracy

  • Provide support in excellent customer service

  • Makes environment of store more secure and 40-50% reduction in losses due to theft

  • With RFID tags no hand counting or individual scanning is required which saves the labor and the time taken to locate each barcoded , label and scan it

To Manufacturers :
  • Improved demand planning and forecasting

  • Faster cash to cash cycle-from raw material purchases to payment for finished goods-to reduce working capital requirements

  • Stricter quality control resulting in improved product quality


  • Improved vendor managed inventory and consignment management

  • Tracking and identifying gray market goods and counter feits

Though initially it seems that RFID technology is expensive, but if the entire gamut of supply chain is taken into consideration, it turns out to be cheaper and operationally efficient.

This technology can be extensively used in the following domains of business :

  • Retail, Supply Chain Management and Warehouse Management

  • Logistics, Tracking of goods and trucks

  • Shipping, Container Tracking, Cargo Tracking

  • EPC Industry for all Materials Management operations
    Animal Tracking

  • Toll Plaza for collection of toll taxes etc

  • Hospitals particularly for infant tracking or patient tracking

  • Security systems for cars etc



While exporters are concerned about RFID, domestic IT companies are all set to tap it to boost their bottom lines. According to Frost & Sullivan, the market for RFID hardware, software, and services will exceed $ 5 billion in 2007. According to another industry projection, one trillion RFID tags will be required by 2012.

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