Are You Tuned into Radio Frequency Identification?

<Originally published - June 15, 2007

Radio frequency identification (RFID) has been around for over 60 years, so why does it have such negative connotations? Many misconceptions and horror stories of organizations' failed implementations have been plastered all over the press, which has contributed to the negative perceptions of this re-emerging technology. Yet these failures are often due to a lack of the correct technology, deficient IT knowledge, budgetary constraints, unqualified business partners, and a general misunderstanding of the overall effectiveness of RFID technology and how it relates to an organization's business.

Navigating through a complicated new system that requires its own hardware, software, and infrastructure is a daunting mission. Given the complexities of evolving standards, converting today's bar codes into tomorrow's electronic product codes (EPCs), and the prospects of how all of this changes the way a company functions, it is understandable why organizations may take a long look before making the leap to RFID.

This article examines RFID mechanics, tag types, uses, and whether RFID is a fit for your organization or not.

RFID 101

RFID Components

Before getting started, organizations should understand the components of an RFID system, the mechanics of the technology, and tag types and their characteristics to decide if RFID is a worthwhile investment for their business.

An RFID system generally consists of tags, encoders, readers, and a host computer. These represent the minimum requirements for a functional RFID system to operate. Each component of the system will be defined, and an explanation of each one's use will be explored below.

RFID Mechanics

Within RFID, everything starts with the tag. The tag has a computer chip that is programmed with information that uniquely identifies each item. Information is exchanged when the tag is activated.

Tags and readers each contain antennae because of the radio interaction they require. The antenna attaches to the integrated circuit (IC) to absorb and emit signals. RFID is a means of uniquely identifying an object through a radio link. A reader, also called an interrogator or “master,” communicates with a tag, called a transponder or “slave.” Each item has a unique identification code. Data between the tags and the readers are exchanged via radio waves, and no direct line of sight is required for this transaction to occur. The reader requests data from the tag or processes the signal being emitted by the tag, decodes the transmission, and transfers the data back to the computer system. The type of tag determines how the tag will respond to the reader. The computer may do various tasks to process the data, such as record the reading, look up the tag ID in a database to direct further action, or direct the interrogator to write additional information to the tag.

Figure 1 depicts boxes moving through the RFID portal. The electrical field emitted by the reader energizes the tag to trigger a read of information from the tag. The arrows indicate the flow of data among the readers, the antennae, and the server. In this example, the boxes pass through the portal (antennae), and the data captured from the tags are transmitted to the reader, and then to the host computer for processing. Information is exchanged when the tag is activated, either by the energy emitted from the portal or, in the case of an active tag, by a battery within the tag that emits energy for the antenna to read.

Figure 1. Flow of RFID information

Tag Types and Characteristics

The tags are key components of any RFID system. Understanding the properties, capabilities, and limitations of each tag type will assist in the solution design. The tags currently in use within the industry are listed in Table 1, which identifies the five different types of tags and lists their advantages, disadvantages, and common applications.

Tag Type Advantages Disadvantages Application
Active Greater read range, greater memory capacity, and continuous signal Required battery maintenance, larger battery size, and cost Used with high-value asset tracking
Semi-passive Greater read range and longer battery life Battery wear and expense Reusable containers and asset tracking
Passive read/write Longer life, multiple form factors, erasable, and programmable Time and expense to program Case and pallet applications—approved for use with Wal-Mart
Passive WORM Suited for item identification and controllable at the packaging source Limited to a few rewrites, existing data replaceable with new data Case and pallet applications—approved for use with Wal-Mart
Passive read only Simplest approach Identification only, no tracking updates Case and pallet applications—approved for use with Wal-Mart

Table 1. Tag types

Active Tags

Active tags usually contain their own power sources; they are heavier and have a large data storage capacity (upward of 1 megabyte). Given these attributes, active tags generally cost more than other tags and typically support more complicated read applications. Uses for active tags differ by applications. Active tags will alert the interrogator that further action is needed. This function enables the company to track the location of an item, as well as which stage of the process that item has reached and what the required action to execute should be.

The advantages of an active tag are its longer read ranges, greater memory capacity, and its emission of a continuous signal. Disadvantages include the need to replace batteries within the tag (depending on frequency of use), the need for a battery size generally larger than that of other tag types, the cost of the physical tag, and the cost to maintain the battery within the tag.

An example of where an active tag may be implemented is in the tracking of high-value assets within an organization. Another example of an active tag application is its giving of operational instructions when it arrives at a particular station within the manufacturing process. The tag has the ability to trigger a subsequent operation, like the activation of a robotic arm, for example, and the information is updated and appended to each step within the process.

Passive Tags

Passive tags are generally less expensive than active tags because they have no internal power source. They also have limited data storage capacity (typically 32 to 128 bits), are read only, and have a limited read range (up to 3 meters). The tags themselves hold very little data, but they can serve to identify an object from a database containing large amounts of information.

The main advantage of a passive tag is its reasonable cost—approximately 20 to 30 cents per tag. Key disadvantages include its limited read range, its lack of a tracking update feature, and its inability to be rewritten.

Typical uses of a passive tag include pallet and case level identification, as found in the retail mandates of Wal-Mart and the US Department of Defense (DoD), for example. A tag can be attached to a product that can be tracked at each stage of production. The conveyor system can then identify the item and receive routing information to be sent to the correct loading dock without human intervention.

Semi-Passive Tags

The semi-passive tag has many of the characteristics of a passive tag (small, lightweight, limited memory), but it also has a battery backup to extend its answer range. Common uses include shop floor containers, pallets, kitting, and just-in-time applications.

The advantages of semi-passive tags include a longer read range and battery life, while the disadvantages include additional expense and maintenance of the battery.

Generation 2 Tags

Within the RFID market, a lack of standards has resulted in manufacturers having different operating guidelines for tags, readers, and antennae. EPCglobal, an RFID unifying body, has established standards for vendors to adhere to in the design of infrastructure, but this has caused hardware and software to be incompatible between companies, and has made collaboration with suppliers nearly impossible.

Universal, standard design, and adherence to this standard, has resulted in increased adoption within the industry. Consequently, read rates have increased dramatically. EPCglobal's standard operating specifications consist of tag, antenna, and reader standards (please visit for specifications).

Adherence to this standard is easing RFID implementations. The interoperability of multi-protocol readers and consistency of tag manufacturing processes have provided more consistent read rates and have allowed different types of tags to be used with different readers that aid collaboration efforts.

A distinct advantage of RFID is its automation of processes. Generation 2 (Gen 2) tags, with their stable operations in read rates and information exchange, allow ease of operation. With extra stability, great gains in processing speed can be made using automated sorting and material-handling by limiting or, in some cases, eliminating human intervention. Gen 2 allows the dozens of individual objects within a group to be uniquely identified at the same time because backscatter is controlled, which has been a problem in the past. Backscatter control results in very stable reads by allowing multiple objects to be differentiated within the electrical scanning field.

Organizational Fit

Does RFID fit the organization or not?

Before venturing down the RFID path, organizations should determine the suitability of RFID for their operations. In determining fit, organizations should evaluate existing applications as well as future requirements to anticipate potential stresses in their warehousing and distribution areas. Constraints that hinder business efficiency can cause the organization to consider RFID as a solution to some of its problems.

If any of the circumstances below (which represent key issues when assessing the suitability of RFID) describe the business conditions that an organization faces, RFID may be the solution:

  • Processing speed is essential or could provide a competitive advantage.
  • Dealings are in high-value assets that need to be protected.
  • Bar codes cannot physically survive operational processes.
  • Areas of a facility need to be protected from unauthorized access.
  • More unique information is needed on each item than a bar code can contain.
  • Highly automated, minimizing human intervention is needed for greater efficiency.
  • There are benefits from knowing where products are at all times in the supply chain, in real time (inventory visibility).
  • Sharing information with business partners is difficult.

Some of the common warehouse operations listed above are often where bottlenecks occur or where restraints can be seen; an RFID system can alleviate and remove these obstacles. If the response to two or more of these circumstances is “yes,” then an RFID implementation should be considered. Although organizations in the same industry have very different business processes, RFID can aid in the argument to maximize efficiency.


Although prices have dropped recently due to an increase in tag production, the costs of RFID implementations are still a prohibitive issue. The case for RFID should be considered from a total cost of ownership (TCO) perspective while accounting for organizational growth, the competitive advantages of inventory visibility, better customer service due to increased product tracking, and the ability to limit “out of stock” conditions.

Other avenues for inventory visibility that can compete with RFID are also emerging, such as wireless fidelity (WIFI) and global positioning system (GPS). An organization should consider the cost of hardware, middleware (edgeware), printers, as well as the cost of the tags themselves, in relation to the benefits and the cost of the items that are being tracked.

For more information and to start your own custom solution comparison, please visit

TEC's Supply Chain Management Evaluation Center

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