Business IT

How Does RFID Asset Tracking Work?

How Does RFID Asset Tracking Work?

by Pat Pharr - April 2, 2024

Does your business have all the critical information on assets it needs? While inventory management has chronically been a thorn in the side of many business sectors, essential technologies, like RFID asset tracking, are quickly changing how everyday employees and even leadership operate.

Asset tracking with RFID offers organizations better control over their assets, can reduce human errors, and even help mitigate security risks. But how does it all work? And, more importantly, what do businesses need to know about implementing an RFID asset tracking system and the benefits it can bring? Let’s explore all those topics and more.

How RFID Asset Tracking Works

Radio-frequency identification (RFID) asset tracking uses a system of electromagnetic readers that collect the information stored on tags attached to fixed or movable assets. This tracking system helps automate manual processes and can bring significant labor savings while reducing time spent tracking assets, related resources, and other related costs.
Businesses can track items by placing an RFID tag on the asset as well as store important information. This might include:

  • Asset name
  • Condition
  • Location
  • Maintenance needs
  • Other associated assets

But, an asset tracking system is more than just tags and readers. Here is a full breakdown of what the entire RFID asset tracking system might look like:

  • RFID Tags - These tags can be passive, active, or semi-passive. They store the asset’s data and send the RFID signal (depending on the tag type). 
  • Antenna - The RFID system antenna picks up the signal from the RFID tag and sends it to the RFID reader.
  • RFID Reader - Receives the data from the antenna and relays that information to the computer/software component of the system.
  • RFID Software/Database - The database stores the information from the RFID tag, using intuitive asset tracking software for ease of use. 

Active, Passive, and Semi-Passive RFID Tags

There are a few different types of RFID tags, each with a different configuration of how signals are sent and received from the tags. Here is a breakdown of each type:

  • Active Tags - These transmit their own signal and have the most extensive read range. Active tags include a built-in battery and an onboard transmitter to send signals. As such, they’re often more expensive but provide more detailed tracking information.
  • Passive Tags - Passive tags don’t include a battery. Because of this, they tend to be less expensive, have a limited range, and are best for assets in long-term storage.
  • Semi-Passive Tags - The best of both worlds, these tags contain a battery but not an onboard transmitter. However, range is still limited relative to an active RFID tag.

The Asset Tracking Process

So, how do all these components work together to help your business effectively track assets? To illustrate how this process works, let’s say we have an asset, Asset X, that will be arriving at Warehouse 1. Afterward, that asset will then move to Warehouse 2. Here is a brief overview of what this might look like:

  • RFID antennas will be installed at both warehouses.
  • A worker will place an RFID tag on Asset X.
  • Asset X comes in range of Warehouse 1’s antenna.
  • The antenna at Warehouse 1 picks up Asset X’s RFID signal.
  • The RFID readers at Warehouse 1, which often connect wirelessly, transmit Asset X’s information to the database/RFID software.
  • Once data is logged, Asset X is then loaded onto a truck for delivery to Warehouse 2.
  • Asset X then comes into range of Warehouse 2’s RFID antenna. 
  • The antenna at Warehouse 2 picks up Asset X’s signal and then transmits it to the RFID reader.
  • That data is then logged in the asset tracking database.

Benefits of Asset Tracking with RFID

While many types of asset tracking systems exist, RFID is one of the most popular. To help you better understand how an RFID asset tracking solution might benefit your business, here are a few benefits of leveraging this type of technology:

  • Real-Time Tracking - RFID technology is the perfect solution for real-time tracking, providing instant data on asset location and status as soon as a reader recognizes the signal.
  • Increased Efficiency - Automated tracking streamlines operations by reducing time needed for inventory checks and asset management.
  • Reduced Human Error - With minimal manual input, RFID tracking systems greatly reduce mistakes in asset management and lead to more accurate inventory tracking.
  • Improved Inventory Management - With precise, real-time data, firms can optimize inventory levels, reduce overstock, and enhance the accuracy of asset tracking.
  • Cost Saving - Efficient tracking systems leveraging RFID technology reduce operational costs as assets are utilized more efficiently and with minimal losses.
  • Enhanced Security - RFID can help secure assets by alerting team members to unauthorized movements or access, thus adding an extra layer of security.

Use Cases of RFID Asset Tracking

So, what does asset tracking with RFID look like in practice? What are some real-life examples of this kind of technology in action?

First, let’s explore the world of retail. Here, inventory management isn’t the only benefit of RFID tracking; it’s also a matter of protecting assets. With RFID, retailers can learn:

  • What’s been stolen
  • Who stole items
  • How they stole those items
  • When items were stolen
  • Who might be helping them
  • What items were stolen on past occasions

But this is more than just leveraging one security technology. At Macy’s, a large department store with over 500 locations across the U.S., RFID technology blends with video surveillance footage to solve crimes faster than ever before. It also means when cases are brought to prosecution, mountains of relevant evidence is available.

In healthcare, RFID technology can be employed in various ways to improve operations. One hospital, Adventist Health White Memorial in Los Angeles, uses RFID tags, alongside other technologies, to enhance operating room turnaround times from 27 minutes to 24, giving these healthcare facilities critical information on patients that can help them better manage their day-to-day operations.

Of course, the RFID system is only as good as its implementation. Interested businesses should not only explore their options but also learn about the common challenges found in asset-tracking technologies. While RFID systems might seem like the right choice, your team should learn about other asset-tracking systems before selecting the right one for your needs.

Find the Right RFID Asset Tracking Solution for Your Business

From small items to large equipment, RFID asset tracking provides critical data-driven insights into your business. Whether it’s the healthcare industry or a retail store, RFID tags are changing how we do business, and for the better. Not only does asset tracking with RFID provide deeper insight into where assets are, but it can also streamline existing manual processes and improve overall efficiency. 

But, the right asset tracking system matters. Businesses interested in exploring their RFID tracking options should connect with an experienced partner who will not only help set up an asset tracking system but also develop custom solutions that meet the exact needs of their business. 

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