What Are RFID Tags & How Do They Work?

RFID Tag being placed on a package

RFID is a tracking system used in a variety of industries. The supply chain sector benefits from this reliable method, which has seen significant improvement over the past several years and is continuing to grow.

While many operations look to use RFID tags for tracking, these tools are not equally effective in all settings. It’s important to get a sense for the different types of tags, labels and technology available, as well as the applications that most benefit from their use.

Below, we provide a thorough overview of the basics of how RFID works, as well as insight into the specific applications and which types of RFID tags are the best fit.

What Is RFID?

The term “radio frequency identification” refers to an advanced form of wireless technology that uses radio waves to capture information. This approach allows users to automatically identify objects or individuals, making it a useful option for tracking and locating items for supply chain purposes.

Two primary components work together to power RFID solutions: readers and tags. Sometimes referred to as an interrogator, the RFID reader receives tag data, which includes integrated circuits (microchips) and antennae. These tags are then affixed to the items that they are intended to track.

How Do RFID Tags Work?

The antennae included in RFID tags are designed to receive waves and act as identifiers, while their circuits are meant for processing and storing critical information.

Once the tags have been attached to their intended objects or people, they use electronic chips to communicate with their connected readers. Unlike other technologies, these tags do not require line of sight visibility from the tag to the reader and the reader can scan multiple tags simultaneously. This transmitted data takes the form of radio waves, which are received by the RFID reader and converted into useful information. This then passes through a specially designed interface, with targeted computer systems and software programs providing data backup and analysis.

The tags’ pieces — the aforementioned circuits and antennae — are held together via a specially designed protective material. The type of material used can vary somewhat based on the application. While glass was originally one of the most common materials relied upon for these systems, today’s tags often feature plastic or silicone.

Types of Tags

Warehouse worker pulling label off of a boxOver the years, RFID tags have taken many forms. Initially, they were inductively coupled and made up of systems featuring metal coils, antennae, and glass. In an effort to reduce the cost, capacitively coupled tags were introduced. These replaced the original metal coils with conductive carbon ink.

While all tags share the same general function, they fall under the umbrella of several categories. Key classifications are made based on frequency and power supply.

Frequency Differences

Frequency bands play a critical role in tag selection. Four main categories fall within the Industrial, Scientific, And Medical (ISM) radio bands. Tags are generally chosen based on the materials that make up the objects being tracked. Metal and water content, in particular, tend to impact tags differently based on the frequency with which they operate.

The following are the main frequencies available for RFID systems:

  • Low-frequency (LF). While LF systems typically involve under 134.2 kHz, this band comprises of the vast frequency range of 30 kHz to 300 kHz. Data read rates tend to be slow for LF solutions, but these systems are uniquely useful for operating near metal or liquid. LF systems are also popular for access control and point-of-sale checkout.
  • High-frequency (HF). Featuring a read range of between one and three feet, high-frequency systems span between 3 and 30 MHz. Mostly, however, these systems operate at or near 13.56 MHz. Their applications tend to be limited within the supply chain industry, but they can be useful for other functions such as credit card security and ticketing.
  • Ultra-high-frequency (UHF). This broad portion of the radio frequency spectrum can span anywhere from 300 MHz to 3 GHz. In general, however, UHF systems operate somewhere between 860 and 960 MHz. UHF systems are typically the preferred option for logistics, as they boast an impressive read range.
  • Near field communication (NFC). Based on RFID protocol, NFC devices are capable of acting as both tags and readers. They generally operate on a system resembling HF solutions. They’re typically situated within close proximity of one another and are preferred for maintaining secure communications.

Active vs Passive RFID Tags

In addition to frequency classifications, these systems can be categorized as active or passive. These terms refer to the manner in which devices are powered.

Passive RFID tags do not contain their own power sources and, instead, rely on radio waves received from readers. Although less convenient in some circumstances, this lack of a power source can be beneficial in that it prevents contributions to radio noise. Passive devices also tend to cost less than their active counterparts.

Active RFID tags feature onboard power sources such as batteries. This grants them greater processing power, and often, impressive read ranges. They’re less useful with small items, however, and may require a greater financial commitment. Active tags are also distinguished by their inclusion of onboard transmitters, which are capable of sending energy directly to readers.

Semi-passive tags provide an excellent middle ground between active and passive solutions. Like active tags, they contain batteries. They do not, however, have onboard transmitters. Battery usage limits tag life, but semi-passive can still be an economical solution when active tags are not required.

Benefits of This Technology

RFID reader being used in a warehouseUsed correctly, RFID can provide a wide range of benefits, many of which promise to improve efficiency and profits within the supply chain sector. Key advantages are outlined below:

Real-Time Visibility

From personnel to assets, these systems offer a unique level of visibility difficult to achieve with other tracking options. Tracking in real-time maximizes traceability while providing improved access to critical data. This, in turn, can be used to make informed decisions promptly.

Increased Efficiency

These systems limit the need for manual entry, which is not only prone to human error, but also, notoriously inefficient. The data produced and transferred via this technology can quickly be received, analyzed, and stored. On a long-term basis, this can lead to significant savings in terms of both time and money.

Avoiding Losses For Business-Critical Assets

The increased accuracy limits the potential for loss when moving or otherwise handling business-critical assets. These losses often occur due to misrouting, which, under an efficient system with real-time visibility, is less likely to occur. RFID security solutions can also be deployed to reduce the risk of theft. 

What are RFID Tags Used For?

This type of technology has been versatile from the very beginning. Experts trace the technology’s history back to World War II, when identification friend or foe (IFF) systems paired plane-based transmitters with radar stations to broadcast signals determining whether aircraft were “friendly.”

Soon after, similar radio frequency systems took on anti-theft applications resembling the electronic article surveillance tags still used among retailers today. In the early 2000s, Wal-Mart attracted attention by implementing RFID for pallets in the United States. Eventually, a variety of retailers began to use it for warehousing and in stores.

Over the years, these systems have evolved considerably, as have their primary applications. These days, they are prolific within the supply chain industry. Common examples of RFID applications include:

  • Shipment verification. Things move quickly in a global marketplace. With shipments moving around the world, distribution centers and ports need to operate at optimal efficiency to ensure goods reach the correct destination. Manual tracking of inbound and outbound shipments can no longer keep pace with the speed of business or navigate disruptions.
  • Inventory management. Used to track inventory in real-time, RFID tags improve efficiency for stocking while also minimizing the potential for counting errors or even theft. These purposes are increasingly served by item-level tracking.
  • Asset tracking. The prompt data collection made possible by the tags makes these systems valuable for tracking high-value assets in an efficient and accurate manner.
  • Personnel tracking. While the tags are typically associated with inventory and assets, they can also be used to provide useful data about personnel. These systems enhance employee safety while also promoting greater productivity.
  • Access control. The technology promotes secure spaces by only granting access to authorized individuals. They can easily be customized to limit access based on a variety of parameters while keeping security costs manageable.
  • Supply chain management. The versatile nature of the tags allows them to deliver impressive oversight for a variety of supply chain functions and processes. These systems can be applied to resolve some of the supply chain industry’s most significant concerns, including working capital, operational costs, and compliance.

While the systems are uniquely versatile, they are not ideal for use in all supply chain applications. The tags may be uniquely durable and secure, but barcoding technology tends to be more affordable and easier to implement in some cases.

Furthermore, material limitations are less likely to come into play with barcodes, which generally do not become unreadable upon encountering specific types of items or their contents. Hence, the preference for barcodes in grocery stores, where metal carts would not yield accurate scans if RFID systems were incorporated.

Finding the Right Technology

With proper planning and implementation, RFID technology can provide an impressive tracking solution that stands up to both general wear and modern security concerns. This versatile solution can be applied in a variety of industries, where it holds the potential to drive both efficiency and innovation.

Used incorrectly, it may hold a limited return on investment. For this reason, deployment should be directed by a service provider with a thorough understanding of the technology — and the ability to customize it to fit specific purposes.

Peak Technologies’ RFID services provide a variety of advantages for supply chain systems. If you’re ready to move forward and learn more about the technology, discuss your options with one of our specialists today.


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The last few months have been incredibly exciting for our organization.  In early April, we changed ownership to Sole Source Capital, an experienced private equity company focused on the industrial services market and committed to our growth. With Sole Source’s support, we have added tremendous capabilities, resources, and industry expertise to the Peak portfolio through the acquisition of three companies in the last 60 days. 

Along with these exciting developments comes a renewed sense of commitment and purpose. To celebrate this exciting new chapter, we wanted to use this opportunity to reflect on our past, while looking forward to the future.  We are extremely pleased to announce that we have changed our company name to Peak Technologies, Inc. 

For many of our long-time customers, this is a return to the company name that had been in place since our founding in 1981.  When we merged with Ryzex in 2011, we combined our names to symbolize the union of two industry leaders.  But over the last few years, we have become ONE Peak, added additional capabilities, battled through a pandemic together, and feel that the time is now to re-brand the company as we look forward to the future. 

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