What Is RFID Asset Tracking & How Does It Work?

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Prompted by the technological boom of the Internet of Things (IoT), Radio-Frequency Identification (RFID) has become a must-have tracking technology for organisations that rely heavily on their assets.

From tracking airline luggage to improving security in retail stores, the ability to connect physical assets to data collection tools such as Asset Tracking Software has proved nothing short of revolutionary.

In the last 20 years, worldwide adoption of asset tracking solutions has peaked throughout the business world. With Manufacturing, Logistics, Retail, and Healthcare sectors leading the charge, it’s no wonder why the global asset tracking market share is estimated to be worth $36.3 billion by 2025.

As companies continue to strive for complete management of their revenue-critical assets, RFID asset tracking has proven itself as a ‘go-to’ technology. With benefits that include reduced labour time and real-time location tracking, it’s no surprise.

In this complete guide to RFID tracking, we’ll cover:

What is RFID Asset tracking

What Is RFID Asset Tracking?

As a business that relies on the availability of its high-value assets to generate revenue, you’ll understand the importance of asset tracking and effective inventory management. Whether that be stock, tools, IT devices, vehicles, or even employees.

Although there are various options available to ease the process of monitoring and tracking assets, there is one tracking technology that offers complete efficiency in the most cost-effective manner; RFID.

In its simplest form, RFID asset tracking is a way of automating the management and locating process of physical assets. It works by loading an RFID tag with data and attaching it to a relevant asset. This data can include anything from name, condition, amount, and location.

Through an RFID tag’s repeatedly pulsating radio waves, an RFID reader is able to capture the stored data. Eventually collecting it in a sophisticated asset tracking system where the data can be monitored and actioned.

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The ability to automate your tracking and monitoring processes aims to put an end to the highly error-prone methods of pen-and-paper and excel spreadsheets. Among other benefits such as:

  • Tracking multiple assets at any one time
  • Eliminating human intervention
  • Collecting data in real-time
  • Improving asset visibility
  • Locating lost or misplaced assets
  • Maximising accuracy of inventory

A Brief History of Tracking With RFID

Utilising Radio-frequency identification for the process of tracking physical ‘things’ is not a new concept. In fact, the first working RFID tracking system can be traced back to the Second World War when it was used to track and identify enemy aircraft.

Over the next 80 years, RFID technology evolved; a patent for the first RFID tag was drawn up in 1973, the first Ultra-High Frequency (UHF) reader was invented by IBM in the 1990s, and by 2004 the American retail juggernaut Walmart had spent near to $500 million on its RIFD programs.

The latter alerting all asset-heavy consumer-focused organisations to capitalise on RFID technology.

The benefits of RFID asset tracking

Since its relatively new beginnings, RFID asset tracking has been deployed across multiple industries and businesses. From manufacturing plants and school facilities to retail stores and warehouses, it’s tracking capabilities can be seen everywhere:

  • UK clothes retailer, River Island, increased their stock accuracy from 70% to 98% by deploying RFID tags across all of its stores
  • The Canadian airline company, Air Canada, saves millions of dollars each year by tracking food carts used in airports around the world
  • Club Car, a manufacturer of golf carts, used RFID tracking to reduce the assembly time of each vehicle from 88 minutes to 46 minutes
  • Canus, a skincare production company, utilises RFID temperature sensors to monitor the condition of products when in transit

How Does RFID Asset Tracking Work?

Whether being used in agriculture to track livestock or in a warehouse to monitor a manufacturer’s supply chain, the basic principles of how an RFID tracking system works is very much the same. First, you’ll require the correct tools:

  • RFID Tags (Passive, Active, or Semi-Passive)
  • An Antenna
  • An RFID Reader
  • A computer database equipped with Asset Tracking Software

How Does RFID Asset tracking Work

Once the right equipment is in place, the RFID asset tracking process can be broken down into four stages:

  1. Data is stored on an RFID tag, with a unique Electronic Product Code (EPC), and is attached to an asset
  2. An antenna identifies the signal of a nearby RFID tag
  3. An RFID reader is connected wirelessly to the antenna and receives the data that is stored on the RFID tag
  4. The RFID reader then transmits the data to an asset tracking database where it is stored, evaluated, and actioned

Depending on how you choose to deploy your RFID asset tracking system, the initial process is relatively straight forward. However, there are varying factors that need to be considered when opting for the right hardware.

What Are the Different Types of RFID Tags for Asset Tracking?

When it comes to choosing RFID tags for your asset tracking system there are three options; Active, Passive, and Semi-Passive. Each tag operates differently and can either benefit or hinder your tracking processes.
Types of RFID tags for asset tracking

What Are Active RFID Tags?

  • Battery-powered tags that continuously transmit a signal
  • Commonly used in processes to track assets in real-time such as vehicle tracking and tolling
  • Depending on the tag’s frequency, Active RFID tags have a signal range of up to 15 meters
  • Are generally more expensive than Passive RFID tags

What Are Passive RFID Tags?

  • Has no internal power source and is powered by an RFID reader or antenna
  • Commonly used for tracking inventory, supply chain management, and access control
  • Has a lower signal range than Active RFID tags
  • Small and lightweight
  • Has a longer life expectancy than Active RFID tags
  • An inexpensive option starting at an average price of just $0.08 per tag

What Are Semi-Passive RFID Tags?

  • Features an internal battery as well as an antenna and RFID chip
  • Has a low signal range when compared to an Active RFID tag
  • The inclusion of a battery allows for additional features such as real-time tracking and sensors
  • Used within close distance of an RFID reader
  • Commonly used for environment and condition monitoring such as temperature-controlled transit

What Are the Different Levels of Frequency for RFID?

Another factor to consider regarding an RFID asset tracking system is the frequency output of RFID tags. As frequency output can alter the size, cost, and communication quality between tags and readers, it’s important to know which is best for your tracking requirements.

Low Frequency

  • Have a frequency range between 125-134 kHz
  • Has a long-wavelength that allows signals to better penetrate solid materials and high water content
  • Has a signal range that is typically limited to up to 10cm

High Frequency

  • Operates at a frequency of 13.65 MHz
  • Good at penetrating metal objects and medium-to-high water content
  • The signal range is short and is typically limited to 1 meter
  • Commonly used for tracking small assets and inventory

Ultra-High Frequency

  • Operates at a frequency of 433 and 860-960 MHz
  • Offers a greater read-range of up to 15 meters
  • Provides faster data transfer speeds than Low and High-frequency RFID tags
  • Shorter wavelengths make it unlikely to pass signals through metal or water
  • Commonly used to transmit data on more than one asset at once with fast data transfer speeds

What Are the Benefits of Using RFID to Track Assets?

A rise in consumer and stakeholder demands has solidified the need for asset-heavy businesses to deploy effective asset tracking solutions. No matter what size, type, or industry your business is categorised in, all objectives are relatively similar when it comes to the management of assets. You need a tracking system that is going to:

  • Reduce costs
  • Increase asset visibility
  • Maximise workplace efficiency
  • Improve customer experience

Not only does an RFID asset tracking system provide the tools to meet these expectations, but it can also benefit other areas of your asset tracking operations.

Three key benefits of RFID tracking include:

  1. Reduces Costs and Labour Time Through Automation

    The use of RFID for tracking assets, whether in transit or in warehouses, allows businesses to automatically monitor the movement of goods.

    The data collection process is also automated, allowing businesses to receive accurate updates in real-time straight to an asset tracking system. From here, asset managers can monitor stock levels, track the supply chain, and even identify costly delays in operations.

    This eliminates the need for manual tracking methods such as spreadsheets, which effectively reduce employee labour time and human intervention.

  2. Provides a Good Return On Investment (ROI)

    The relatively cheap set of tools needed to deploy an effective RFID asset tracking system allows accessibility for businesses of all revenues. Enabling not only enterprises with multiple sites and warehouses to install an RFID, but Small and Medium Business (SMBs) too.

    Compared to other forms of asset tracking, RFID is a long-lasting and cost-efficient tracking solution. So much so, that the cheap running costs have enabled businesses in the Manufacturing, Logistics, and Retail sectors to achieve an ROI of up to 200%.

    Consider that the average price of a Passive RFID tag starts at just $0.08. As well as how modern smartphones are equipped with RFID reader capabilities, eliminating the need to purchase an expensive device. Not to mention the durability of a plastic tag that can be used over-and-over again.

  3. Reduces Loss and Theft of Assets With a Real-Time Locating System (RTLS)

    The cost of replacing assets that have either been lost, misplaced, or stolen can be damaging to a business’s bottom line. This is a common expense across most asset-heavy industries; the American Auto industry replaces lost reusable packaging at a cost of $750 million a year, whereas job site theft costs Construction companies $1 billion annually.

    Not to mention the 24 million articles of luggage that were lost in 2016 due to poor location tracking.

    By implementing multiple RFID readers and antennas, businesses are able to triangulate the exact whereabouts of their assets. Resulting in real-time and accurate location data.

    As well as reducing replacement costs, an RTLS also helps to reduce the manual process of locating assets and wasting hours. With nurses spending an average of 6000 hours per month searching for equipment, its no wonder why the Healthcare industry is a leading-adopter in the asset tracking market.

RFID Vs. Barcode: Which Technology Is Best for Tracking Assets

Before the rise of radio-frequency identification, Barcode was the default technology for managing assets and tracking inventory. With Barcodes asset tracking systems being easy, cheap, and accurate, it’s no wonder why they’re so popular. But, there are some drawbacks to using Barcodes to track assets:

  • Barcodes need to be in a visible line-of-sight when scanned
  • They’re not durable and can be easily damaged
  • You are only able to scan one Barcode label at a time
  • You can only store a small amount of data on a barcode (1D barcodes can hold just 8-25 characters worth of data)
  • They have a read-only functionality

RFID Vs. Barcode

There are three key areas in which the use of RFID asset tracking trumps the use of Barcodes:

  1. Speed

    The process of scanning a Barcode and collecting its data doesn’t seem like a lengthy task. But, when compared to RFID, it is. Not only can an RFID reader collect data from 40 RFID tags within the same time it takes to scan one Barcode, but it can also scan multiple tags at any one time.

  2. Accuracy

    Although the accuracy levels of both tracking technologies are subjective, RFID typically comes out on top. This is most notable in the process of reading tracking tags. Data from multiple RFID tags can be collected and stored instantly without being in line-of-sight. Whereas barcodes need to be manually scanned one-by-one, increasing the risk of missing a tag and causing errors.

  3. Function

    Quite simply, the extra data storage and longer signal range of RFID tags outperform that of a Barcode, which can only communicate a small amount of data when in close contact with a Barcode reader. Although Barcodes are favoured in businesses with smaller inventories that have less of a reliance regarding automation, they’re not the ideal tracking solution for operations such as monitoring a manufacturing supply chain.

Innovative Uses of RFID Asset Tracking

As well as featuring heavily in the stock tracking processes of retail shops, the locating of educational assets in schools, and transit temperature monitoring for logistics quality control, RFID technology has been used in a wide range of scenarios.

In fact, RFID tracking technology is already used in lots of industries. Including:

  • Industry and logistics
  • Location and condition monitoring
  • Fuelling automation
  • Animal identification
  • Smart buildings
  • Military
  • Pharmaceutical industry and healthcare
  • Marketing
  • IT and technology tracking

Two of the most innovative uses of RFID asset tracking in recent times include:

Using RFID In Supply Chain Management

As a crucial part of the eCommerce sector, supply chain management is the heartbeat of how goods flow from warehouses to customers. For a company to have a successful supply chain operation, they need to know everything about the inventory they have and the process of how goods pass in-and-out of their warehouse.
Deploying RFID into a supply chain can help by:

  • Collecting data regarding historical sales and transactions
  • Monitoring real-time updates regarding stock level, location, and condition
  • Improving security and reducing assets being lost or stolen

Incredibly, in 2017, 69% of companies worldwide admitted to having no clear visibility of their supply chain.

Using RFID In Hospitals and In the Fight Against COVID-19

The use of RFID asset tracking in healthcare facilities has been widespread for many years, helping nurses and doctors locate equipment and track inventory. In fact, it’s estimated that hospitals can achieve an ROI of 275% with an effective asset tracking system installed.

In more current times, RFID technology is being used for good in the battle against the 2020 COVID-19 virus outbreak. The microchips found in RFID tags, enable hospitals and other healthcare facilities to:

  • Authenticate COVID-19 test kits and vaccine tests
  • Monitor and track Personal Protective Equipment (PPE) inventory
  • Track the journey of plasma used in vaccine trials
  • Ensure hospital staff are following hand-washing protocols with RAIN RFID sensor technology

Other Types of Asset Tracking Technology to Consider

With a proven track record of lifting inventory accuracy to 95% or better, and with 8 billion tags being purchased in 2017 alone, RFID is a renowned asset tracking technology. But, there are other forms to consider when it comes to tracking assets:

Barcode and QR Code Labelling

Used to track inventory in stock rooms and warehouses, Barcode labelling has been a popular choice for businesses since the 1970s. They’re cheap to purchase, can be printed at home, and are easy to use – with no data programming knowledge needed. Barcodes have to be in a visible line-of-sight for a reader to scan and can only store a very small amount of data.

GPS Tracking

GPS (Global Positioning System) allows business owners and asset managers to actively track assets while in transit. By communicating with satellites, a GPS tracker is able to gain accurate real-time location data.

Although GPS systems are expensive and not ideal for indoor tracking, they’re effective for fleet management, logistics, and transport organisations.

Also Read: How GPS Fleet Tracking Can Improve Fleet Management »