RFID (Radio Frequency Identifier) is a passive device consisting of a chip containing a unique ID number and an antenna. It has no source of power. When a scanner is aimed at it, it reflects the ID number back to the scanner. Ideally, you could pass a pallet load of products through a scanner (which can be hand-held or look like a gate, similar to the gate you walk through at airport security) and the scanner will register each product automatically. Unfortunately, because some products can block each others’ signals, scan rates are not 100%. Arranging tags on products and products on pallets for maximum scanability is called RFID Feng Shui. RFID tags are flat and usually flexible. They have been made as small as the head of a pin and are often about the size of a business card or bookmark. The price of RFID tags is coming down and in general is under ten cents (USD). To use RFID tags, the entire supply chain must understand the tag system and be able to use the data generated. This often doubles the price of the tag.

GS1, the consortium behind the bar code, has been an initial driver of RFID systems, using their EPCGlobal standard, for which they charge a royalty. Their system is used in over 90 countries worldwide and ties into many existing supply chains. Because some companies don’t want to pay the royalties, there is an abundance of new, ad hoc RFID formats, mostly coming out of China. At present, there are few or no standards for these systems.

A new kind of powered tag is called a RUBEE tag. RUBEE tags have batteries that can last for years and can hold data and communicate with each other. They are much more expensive and are at present only used on critical items, like transplant organs. They hold a lot of promise, as they can form mesh networks and supply vast amounts of information about a given physical situation.

There are two big problems slowing the adoption of RFIDs:

1. Scan rates are nowhere near 100%. If all products don’t scan, you have to go scan them by hand, drastically reducing efficiency. For individual products coming down a line, scan rates are very good. For products packed together or in containers, scan rates are so low that many supply chains refuse to adopt them for fear they will be too expensive.

2. Manufacturers have no incentive to apply them. Manufacturers see RFIDs as an extra cost they bear but they don’t benefit. The entire supply chain benefits, but they have to convince manufacturers to apply the tags. Most successful programs are a result of mandates by large retailers like WalMart and Tesco.

To date, most RFID systems are working at the pallet level, rather than at the product or SKU level. That should change as prices come down and scan rates go up.

RFIDs are not just for products. They are used as tickets, baggage tags, passport IDs, tracking packages, and many other things. The general category is called contactless ID and involves many technologies solving many different problems.


Pallet-level RFID systems are paying off. As more companies adopt pallet and rack-level RFID systems, the prices come down and the software improves. Eventually, these projects will pave the way to item-level RFIDs. 

Fully Semantic

Here are some of the companies and groups helping build this future:

– need companies here!

External Links

Discover RFID (by GS1)

WikiPedia – RFID

WikiPedia – RUBEE

Related Terms

Spime, bar code, contactless ID