Radio frequency identification (RFID) is a critical component of the modern supply chain. This wireless technology relies on radio waves to capture and convey essential information.

While RFID tags and barcodes hold a few basic similarities (such as the ability to store and convey data within a small, highly versatile format), their differences are worth noting — especially as they relate to the supply chain.

Perhaps most notably, barcodes require a clear line of sight in order to function optimally. RFID, however, relies on radio waves, which continue to function even when a line of sight is unavailable. RFID technology also tends to be more effective for simultaneously handling large numbers of tags and significant volumes of data.

If there’s a downside to RFID — as compared to barcodes — it’s that the technology is far more complex. For this reason, it’s essential to work with a consultant who thoroughly understands how this technology functions in various contexts. Only with proper implementation can RFID produce superior results for your business.

A basic understanding can also be helpful at the enterprise level. As such, we’ve provided a helpful guide to all things RFID in supply chain management. Keep reading to learn how RFID systems work and why they’re so valuable through integration, operations, purchasing, and distribution.

The Technology

RFID solutions rely on Electronic Product Codes (EPCs), which serve as unique identifiers. These are stored within microchips, which also contain radio antennas. Tags equipped with these microchips can be attached to individual items, pallets, or cases. Readers are then strategically positioned to beam radio waves that alert the tags.

As soon as readers obtain each tag’s EPC, they forward this data to software, which, in turn, sends the EPC to a database known as the Object Name Service (ONS). This automated networking service resembles the familiar Domain Name Service (DNS), which is known for directing computers to specific websites. The ONS, however, directs software known as middleware to servers that contain detailed data about the products in question.

Physical Markup Language (PML) is another key acronym in the RFID equation. Designed as a universal standard to describe a variety of items and locations, PML aims to standardize communications for commercial applications. In the context of the RFID reader and tags, PML is used by a server to store detailed product data, including where a particular item was produced. This, in turn, makes it possible to track down the source of problems such as defects or product tampering.

On the receiving side, advanced RFID solutions limit the need to examine packages while unloading. Rather, cargo lists are provided so that pallets and individual items can be routed to the appropriate locations. When shipments arrive, specific real-time updates promote effective inventory management.

RFID tags are invaluable throughout all stages of this process, but it’s important to remember that these operate within a larger, highly developed system. Readers and tags alone will not ensure success across the entire supply chain; rather, the strategic implementation of these alongside the appropriate software will promote the effective use of RFID in supply chain management.

Incorporating RFID Into the Supply Chain

The proper implementation of RFID is essential for everything from decision-making to inventory tracking and distribution — and these systems can be found within sectors ranging from e-commerce to healthcare.

The modern supply chain offers a myriad of opportunities to utilize RFID within its most significant categories: integration, operations, purchasing, and distribution. Below, we dive into details regarding each supply chain process (and its potential for RFID application).


In today’s fast-paced market, the supply chain is only as effective as the flow of communication that supports it. Accurate, up-to-date information must be immediately shared with suppliers, warehouses, and transportation providers to ensure seamless operation in all stages and environments.

RFID tags promote effective integration by swiftly capturing crucial details about materials and products in transit. Effectively designed RFID systems will then seamlessly transfer this data so that the appropriate supply chain partners and other parties can act on it when relevant.

Operations & Purchasing

Everyday supply chain operations play a huge role in determining how efficient — and ultimately, profitable — the supply chain can be. However, this can be difficult to track. RFID solutions address this challenge by providing real-time insights into everyday workflows. These resources can pinpoint where, exactly, bottlenecks occur. If not promptly identified and addressed, such issues hold the potential to cause major holdups.

Within the purchasing phase of the supply chain, RFID helps to track the flow of both raw and semi-finished materials. Equipped with RFID solutions, it’s easier to determine shipment status. This streamlines other warehouse management processes by limiting receiving stage holdups and other delays.

RFID is also critical for maximizing warehouse storage resources. The data gathered by these systems can ensure that all items are stored and retrieved in the most efficient manner possible, while also limiting the potential for warehouse-based inventory loss. Meanwhile, real-time data produces greater picking and inventory accuracy — an essential consideration given the high costs attributed to even modest error rates.

Distribution & Logistics

As products move from the point of origin to their final destinations, RFID systems offer numerous advantages for the distribution process. During this stage, a variety of unexpected issues can arise for distributors, threatening to cause costly delays that create a domino effect of inefficiency. These issues are more easily mitigated with help from RFID solutions.

A key example? Weather and road conditions. These threaten to derail even the most efficient operations. No amount of planning will keep shipments on track unless real-time information can be used to develop at-the-moment contingency plans. Also, as mentioned previously, data gathered with help from RFID can enable tracking, and therefore, provide swifter solutions for issues such as tampering.

Within warehouses and distribution centers, RFID solutions are just as vital for keeping workflows functioning at a desired pace. By boosting efficiency, these automated systems provide a cost-effective opportunity to improve profits. What’s more, enhanced supply chain visibility promotes greater accuracy. This is essential in today’s competitive market, as demanding businesses and consumers leave little room for error.

Implementing the Right RFID Solution

Are you determined to realize the benefits of RFID? These are far more accessible upon implementing a custom solution tailored based on the realities of your industry. As we’ve discussed, the technology definitely matters — but how, specifically, it’s used within a particular supply chain is especially important.

Our team at Peak Technologies can be a valued resource as you determine how to make the most of RFID in supply chain management. We offer targeted RFID services designed to enable real-time visibility through all stages of the supply chain. Contact our RFID experts today to learn how we can help.