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Pros and Cons of Using RFID for Inventory Management

  • Administrator
  • May 25, 2022
  • RFID
Pros and Cons of Using RFID for Inventory Management

Today the world of inventory management is evolving more and more plus there is much focus on improving its efficiency. Businesses are evaluating their current capabilities and looking for ways to extract more and more efficiency out of their infrastructure before adopting new technologies. Thus it is vital for operations management to thoroughly research and analyzes the impact any change could have on their entire operation.

Radio-Frequency Identification (RFID) has received much attention and has the potential to revolutionize the inventory management industry. Here we are going to discuss the current state of RFID tag usage, its pros and cons, and a look at the RFID-based inventory management system.

RFID Tags 

RFID for inventory management needs a scanner that uses radio waves for communicating with an RFID tag. There is a microchip that allows the reader to read the data and also write data in real-time thus updating it. Tags can be placed on a variety of surfaces for tracking. Most of these tags are passive RFID, which means they contain no battery and are powered by waves.  Active tags are powered and come at a higher cost than is used for long-range tracking of machinery.

Pros of RFID Tags for Inventory Management 

There are several benefits and here’s a look at how RFID tags can be a benefit in the inventory management process.

•         Improved visibility and faster scanning: They do not require a “line-of-sight” scan like barcodes, thus it can be read at a distance offering fast inventory processing. It is possible to read them in any orientation and also offers you improved visibility into your inventory and provides more frequent updates and scanning locations.

•         Reduced labor costs: Inventory check-in, counting, and shipment are done very quickly in just a few scans; this does not need multiple employees.

•         Tracking of returnable assets: Such companies that offer a return of assets such as containers and pallets there is a capital investment to protect them; with RFID based inventory management system you can track these assets through the entire supply chain loop and have increased visibility on inventory locations.

Cons of RFID Tags for Inventory Management 

While there are some benefits, there are also several disadvantages, such as security. Here’s a look at the disadvantages.

•         Not using cell phones as scanners: Fixed and remote RFID readers are available but there is no possibility to use a phone in canning them, as can be done with barcodes. This limits the drivers or employees as it requires carrying specific RFID readers for scanning and phones cannot be used as a backup.

•         Prohibitive costs when scaling: These are significantly more costly than barcode labels. Also, they use specific readers that have to be purchased. This adds more costs while scaling and additional requirements of specialized scanners.

•         Demanding infrastructure needs: These systems require the integration of readers, tags, inventory management system, network, and building wiring; all this requires time and resources. Sometimes businesses do need to update their inventory management system entirely. And, if real-time asset tracking is required, the RFID-based inventory management system will need to utilize GPS and cellular data.

•         Security concerns: The systems continue to update and improve but still they can be vulnerable to hacking. Remote devices can sometimes be used to scan tags at close range and copy tag data.  Thus a cloned tag can be made or copy the information to another tag.

RFID in a Warehouse 

The difference between active and passive RFID is the way in which the tags are powered, but the basic workflow is the same. Before sending a shipment to the warehouse it will have an RFID tag attached to items. This tag stores important information. 

Once the shipment arrives at the destination, each tag transmits its information to readers in the warehouse. These readers are placed in strategic locations to pick up the best possible signal. Data is transmitted via electromagnetic waves and is relayed to a central warehouse management system. Then the information can be modified and sent back to the RFID tags. This gives operators the ability to perform tasks like real-time asset counts and advanced inventory transactions. 

Does RFID Increase Inventory Accuracy? 

It improves inventory accuracy by up to 13% as compared to traditional inventory tracking. In the retail industry, where maintaining inventory accuracy is a challenge, implementing a more automated system provides some benefits. Sometimes in a warehouse, the implementation costs may outweigh the benefits. 



  • Last updated on Sep 29, 2022