RFID System: What are its Advantages and Disadvantages?

One of the biggest challenges that many businesses face is tracking inventory. Tracking using a manual process is a nightmare, even though several companies still do it. But for large-scale operations that trade or produce millions of bucks of stock, ending up short in inventory can mean hundreds of thousands of lost money every year. Companies can't bear to risk having unaccounted stock due to old-fashioned or less than effective tracking processes. With the numerous advantages that RFID offers, it also has some disadvantages, which we will cover in this article. But first, let's learn what RFID is.  

What is an RFID System?

Radio-frequency identification (RFID) comprises tags attached to the material, containers, etc. and readers placed in the entrances of a plant in which goods flow to and from. Electromagnetic fields are utilised to automatically identify and trace the items that contain such RFID tags. Depending on the type of tag, an RFID tag can usually hold up to 8K of data which is more than what barcodes can store, giving an opportunity for users to a lot of valuable, historical information. RFID system relates to a technology whereby a reader obtains digital data encoded in smart labels or RFID tags via radio waves.

RFID is employed across various industry sectors such as construction, engineering, chemical industries, manufacturing, retail, logistics, etc. The many perks of RFID systems make it possible to formulate a solid business state for its use within different enterprises and applications. 


The most significant advantage of RFID is its clarity to the operation, with accurate and reliable tracking of goods that move in and out of the facility. 

  • Automating Inventory Control

Real-time digital data is captured automatically – and correctly. It's been recorded that RFID Systems can improve inventory accuracy to approximately 95 per cent.

  • Eliminating Errors

It's practically impossible to create a mistake since the reader does all the work; all that a human has to do is pass through with tagged goods/ materials, and the reader will track its location.

  • Reducing Labour Costs

The time wasted while searching for inventory is eliminated when you implement an RFID solution into your business. This also means cycle counts are less and can be conducted faster with higher accuracy.

  • Controlling Theft

RFID Systems add a whole new level of visibility and transparency to the supply chain by precisely identifying when goods leave one location and enter another. 


Depending on the application demands, there may be times when a barcode data collection system could be a better fit than an RFID solution. 

  • Barcode labels can be very low-priced (a matter of a few bucks per label), whereas RFID tags can run to a greater extent, all dependent upon the type of tags you require. RFID readers also cost a bit more in price than barcode scanners.

  • Depending on the nature of the material your RFID tags may come in contact with, for example, metal or liquids, the tags could get deactivated and unable to transfer data.

  • Deployment can be very complex, with costs linked with that complexity. Knowing what is required and expected may help determine the feasibility of the implementation of RFID systems. 

More and more enterprises are taking support of the benefits an RFID system can bring to a business that constantly copes with inventory location, employee theft, overhead and inventory tracking. Before making any choices, find an RFID-savvy provider that can offer several options to conclude which route would be best for your business needs. Schneider Electric India provides quality options for electrical protection and advanced system solutions. To find out more about such solutions, visit their website today! 


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  1. author
    27 Aug 2019
    Tomas Mandy

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    1. author
      27 Aug 2019
      Britney Millner

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  2. author
    27 Aug 2019
    Simon Downey

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