RFID in supply chain visibility. How it works in a warehouse?

RFID in supply chain visibility. How it works in a warehouse?

Natalia Figas
January 27, 2021  | 4 min read

Created during WWII, spies' technology was supposed to revolutionise supply chain visibility 50 years after the war. But has the revolution of RFID already started for real?

Radio Frequency Identification tags have many application areas. For instance, libraries, hospitals, T&L, access control, sports or even animal tracking.

Simple, cheap and effective technology gained its momentum in 2000s when companies saw the value of RFID.

Headlines hailed this technology as the future of supply chain visibility. However, has RFID evolved? And how does it work in the case of supply chain visibility?

First, let us find out what an RFID system is and how it works.


What is RFID, and how does it work?

For Radio Frequency Identification to work appropriately, two components are needed: a tag to identify a tracked object and a reader that sends radio waves to recognise objects automatically.

Well, it is a bit simplified. This is how passive RFID works – reader sends RF waves to power up a tag. There is also active RFID, where beacons are powered up with internal battery and transmit signal on their own.



The object can be anything:

  • books in the library,
  • any product from the store shelf,
  • inventory in the warehouse,
  • or a car.

Simply attach a tag to an object.

We have three types of tags depending on the power supply:

  1. active (have their power source),
  2. passive (powered by reader energy),
  3. semi-passive.

Depending on how the data is saved, we can distinguish:

  • ROM – read-only – such tags detect presence of the object they are attached to,
  • WORM – write once – a blank tag can be written once and read many times,
  • EPROM – rewrite and read.

Tag types are related to the distance covered by RFID technology. We will explain this in a moment.

However, each of them consists of the same components:

  • transponder (receives radio waves and respond to them),
  • rectifier circuit (stores the energy from a reader and powers the controller and memory inside the tag),
  • controller,
  • memory.



For the reader to identify the object, a tag must be within the transmitted radio waves range. The tag will then send a feedback signal to the reader.

Readers are produced in various sizes and forms: from small handheld scanners to big gates we know from stores.

The readers are made of three components:

  • RF signal generator (for generating radio waves),
  • receiver/signal detector (for receiving feedback from tags) and,
  • microcontroller (to process the information by the connected computer).


How far does the RFID technology work?

Tags operate at three frequencies:

  • Low Frequency (LF, 125 kHz or 150 kHz)
  • High Frequency (HF, 13.56 MHz)
  • Ultra-High Frequency (UHF, 865-868 MHz in Europe)

So, the LF tags will work in up to 10 cm, HF up to 1 m, and UHF up to 10 m. More details here.


RFID system vs barcode system

This solution may resemble barcodes technology, but unlike barcodes, the RFID tags do not have to be in the line of sight.

The second significant difference is the ability to identify multiple objects simultaneously rather than one at a time.

This information will help us understand why RFID is so well suited to improve supply chain visibility.


How the use of RFID improves the supply chain visibility

There are many examples of the usage of RFID improving the supply chain visibility.


Packing goods - cosmetics example

To illustrate the usefulness of RFID technology, let's look at the example of cosmetics packaging.

Large warehouses often complete orders consisting of various cosmetic products. The warehouses must:

  1. complete the order - in the right time and consisting of the right cosmetic products;
  2. choose a package with appropriate dimensions - to limit shipments in too large boxes;
  3. send the order at the right time to the appropriate collection point - this can be, for example, a parcel locker or delivery to the customer's home.

RFID tags enable precise identification of appropriate cosmetics already at the order completion level. Each product is located in the warehouse with an accuracy of up to 3 meters, thanks to which the time spent on searching for goods is kept to a minimum.

All ordered cosmetics are assigned to the container, which also has its RFID tag.

After completing the order, the system can mark the order as completed.

Now it's time to pack the goods.

To avoid financial loss caused by shipping orders in too large or too many packages, RFID tags on the packages help select the package's size.

When the order is complete and well packed, it can be redirected to shipment - by encoding information about the shipment date and destination on RFID tags.


Benefits for business and supply chain visibility

Besides significant business benefits, meaning:

  • minimising the order completion time,
  • eliminating errors while collecting goods,
  • and saving money thanks to the precise selection of packaging...

...in terms of supply chain visibility, the warehouse has strict control over the flow and quantity of goods and orders.

RFID technology also enables warehouse managers to register inventory much more efficiently than by reading box numbers and recording them manually.

Another example could be a case when goods are shipped between many internal locations (e.g., warehouses) and we could track their location (checkpoints) using tags and gates.


A scale is a problem

Countless volumes of products are sold around the world every day. The scale of sales becomes so large that one should look for new innovative ideas to improve logistics processes.

Even with RFID technology, discrepancies can arise between the inventory data and the actual inventory.

Fortunately, progress comes to the rescue.


Locating accuracy up to 19 cm. Drones and RFID

In 2017, MIT scientists combined RFID with aerial drones. The developed RFly system allowed to eliminate errors during the inventory of goods.

Drones armed with RFID readers capture the signal emitted from the tags from a distance of even several dozen meters.

RFly system still has its imperfections, but it is a perfect example of how that technology can continue to evolve to improve the management and supply chain visibility.


Custom solutions tailored to your business

Skyrise.tech helps companies to spot, analyse and solve problems related to visibility in supply chains. With our expertise, you can create a system that resonates with your business and unique challenges.

To contact us, fill the form available here.



RFID is a simple and effective technology. An uncomplicated operation scheme (tag + reader), low infrastructure costs, and measurable benefits contributed to RFID systems' popularisation.

An example of the use of technology in a warehouse perfectly illustrates the possibilities that RFID offers to improve the supply chain's visibility. The most important of them is strict control over the processes and flows of goods.