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RFID stands for “radio frequency identification,” and refers to a technology that uses radio waves to transmit information short distances. An RFID asset tracking system uses a combination of tags that send radio waves and readers that pick them up, allowing businesses to track all their assets. The best asset tracking companies offer key efficiency and security benefits for any organization with physical assets.
These systems make the most sense for a business that has small, movable, and expensive assets, because large assets may require GPS trackers, and cheap or fixed assets can be tracked with barcodes that don’t transmit data at all. Medical supplies, laptops, and office chairs are all examples of assets that may require RFID tags.
RFID asset tracking helps businesses manage all their assets from one central location, boosting visibility in the long term as well as the short. Here, we’ll cover how RFID works, what sets it apart from GPS and barcode tracking, and how much it might cost to get started.
What Is RFID Asset Tracking?
RFID asset tracking utilizes a system of radio frequency identification tags to aid with the monitoring of business equipment as well as other assets valuable to companies. This could be anything from computers to livestock.
RFID tags can be placed on assets and information about those assets can be transmitted via radio waves to RFID readers, which are usually based at stationary locations. Then, this data can be stored on a computer system.
RFID systems can track the location of assets, but also other important information like the condition of the objects and their maintenance needs, because this data can be written to RFID tags. Some environmental monitoring can also be carried out with the help of RFID – for example, tracking medical equipment used to identify contamination in controlled pharmaceutical environments.
In this guide:
- How Does RFID Asset Tracking Work?
- Active, Passive and Semi-Passive Asset Tracking
- RFID Asset Tracking vs Barcode Asset Tracking
- RFID Asset Tracking vs GPS Asset Tracking
- How Much Does RFID Asset Tracking Cost?
- Benefits of RFID vs Barcode & GPS
- Disadvantages of RFID
- The Best Asset Tracking Software
- Find the Best Asset Tracking for Your Business
- Frequently Asked Questions
How Does RFID Asset Tracking Work?
Radio-frequency identification (RFID) asset tracking uses a system of RFID tags and electromagnetic readers to collect data from fixed assets or movable assets. RFID tracking involves attaching an RFID tag loaded with data, including name, condition, amount, and location, to relevant assets. The RFID reader captures the stored data through pulsating radio waves sent from the tag.
What do you need for RFID tracking?
To create a functioning asset tracking system, you’ll need four pieces of equipment: RFID tags, an RFID reader, an antenna, and a computer database.
- RFID tags are placed on and identify your assets. RFID tags can be active, passive, or semi-passive, which dictates how signals are sent and received (more on this later). They store data like an asset’s electronic product code, as well as maintenance needs and history (depending on the type of tag).
- An antenna will pick up signals sent by the RFID tags attached to your assets.
- An RFID reader will receive the data from your RFID tags via the antenna and send it to your computer.
- A computer database will securely store all the data it is sent from the reader.
The RFID tracking process
To better understand the RFID tracking process, let’s pretend you’d like to track an asset called Asset1. It’ll be arriving at Warehouse A, and then moved to Warehouse B afterwards. Broadly, this is what the process would entail:
- An antenna and an RFID reader are set up at both Warehouse A and Warehouse B.
- An RFID tag is attached to Asset1.
- Asset1 comes into the range of Warehouse A.
- The antenna at Warehouse A picks up Asset1’s RFID tag signal.
- The RFID Reader at Warehouse A, which is wirelessly connected to an antenna, transmits Asset1’s data to your computer.
- The data is logged in your tracking database.
- Asset1 is then loaded onto a truck inside Warehouse A and sent to Warehouse B.
- Asset1 comes into the range of Warehouse B.
- The antenna at Warehouse B picks up Asset1’s RFID tag signal.
- The RFID Reader at Warehouse B, which is wirelessly connected to an antenna, will transmit Asset1’s data to your computer.
- The data is logged in your tracking database.
Despite the existence of other methods for tracking stock and assets, many companies still use RFID for tracking – in fact, it’s experienced a bit of a renaissance in retail. RFID is increasingly being used to track shipments, thanks to the security benefits of the data it offers. As of February 2024, Walmart requires all suppliers to ship certain product categories using RFID.
USDA regulation was even introduced recently, and if passed, would mandate RFID tags for all cattle that are transported across state lines.
Active, Passive, and Semi-Passive RFID tracking
RFID asset tracking comes in three main categories: passive, semi-passive, and active. These categories refer to how the RFID tags transmit data, and how close you have to be to pick up their signals.
- Active tags use a built-in battery and onboard transmitter to send out intermittent electromagnetic signals.
- Passive tags send or ‘reflect’ back a signal that a passive RFID reader initially sends to them.
- Semi-Passive tags have a battery, so have the power reserves for additional features, but no onboard transmitter.
Active RFID tags transmit their own signals and have the largest read range out of the three types of tags, so they are the best choice for real-time tracking. They are often designed to host additional features – however, they’re typically the most expensive type.
Passive RFID asset tracking requires a little more skill than active or semi-passive tracking, due to the passive tags’ more limited range and the fact they have no battery. They are one of the better options for items that are stored for extended periods, and only need to be tracked for a short period. They’re cheaper than semi-passive or active tags too.
Semi-passive RFID tags are a great option if you need additional features in your tracking infrastructure, such as environmental monitoring. The fact that this tag doesn’t have an onboard transmitter to transmit its own signal independent of an RFID reader, however, means the range is still limited when compared to an active tag.
None of these three types of RFID tracking requires a line-of-sight scanner that barcode tracking systems use, making RFID a much faster and simpler tracking process than barcode tracking.
An RFID reader can log multiple tags at a time, allowing workers to audit an entire room of assets in a few seconds. All three types of RFID tracking can be quickly completed by the typical employee, removing the time and cost of skilled labor required for physical inventory tracking. This is why an increasing number of companies are using asset tracking systems, and the asset tracking market is set to be worth $34.82 billion by 2026.
Active RFID Tags
An active RFID tracking system is composed of three parts: A tag, that tag’s antenna, and a reader. Signals are sent outward from the antenna of the battery-powered tag and will be received by the reader if it is within the read range, which is usually 50-100 feet but can be as far as 600 feet.
Some active RFID tags are called “transponders.” In order to better conserve battery life, these tags will only send a signal if first triggered by a signal from a reader. Other active RFID tags will constantly send a signal at set intervals, and are termed “beacons.”
Active trackers have higher memory capacities and can store more information, but will only last between three and five years before their batteries must be replaced. They are typically fist-sized or smaller, with a surface of plastic or rubber.
While active and passive tags can be used in a variety of environments, active tags are ideal for higher-value assets. They are also better for travel between facilities, as the tags’ wider range and active signal provides more data and makes them easier to find. The data also tracks asset conditions, which helps with preventative maintenance.
An example of an active asset tracking tag. Image source: Wikimedia
Passive RFID Tags
A passive RFID tracking system is composed of the same three parts as an active one: A tag like the one pictured below), the tag antenna, and a reader. However, a passive tag won’t send its own signal – it must first be scanned by a signal sent from a handheld reader. The reader sends energy to the tag’s antenna, which turns the energy into radio frequency (RF) waves and sends a signal, called “backscatter,” back to the reader.
Passive tags can come in a wide range of sizes and materials; some can handle extreme temperatures and weather, while others cannot. They might be physical tags, they might be embedded in equipment, or they might look like a label and be called an ‘inlay’ – whatever the case, a passive RFID will last for decades before eventually breaking down from wear.
An example of a small passive asset tracking tag. Image source: Wikimedia
Semi-Passive RFID Tags
Semi-passive RFID tags have built-in batteries and are sometimes referred to as battery-assisted passive RFID tags. They’re more similar in size to passive RFID tags, but have a longer read range thanks to their batteries.
Semi-passive RFID tags are a great option if you need additional features that passive RFID tags can’t host. The fact that it doesn’t have an onboard transmitter to transmit its own signal independent of an RFID reader, however, means the range is still limited when compared to an active tag.
An example of a semi-passive asset tracking tag. Image source: Easy2log
Active vs Passive vs Semi-Passive RFID Asset Tracking
The main difference between passive and active RFID tags is that active tags have a built-in power source and can automatically broadcast their location to a reader, while passive tags have no power and can only respond to a reader’s signal.
Here’s a quick table to provide a clear comparison of the pros and cons offered by active and passive RFID asset tracking systems.
RFID Tracking vs Barcode Tracking
Both RFID and barcodes offer a way to automate asset data collection. Barcode asset tracking systems, as you might be able to guess, use barcode labels on assets. Each label must be directly scanned by a laser reader in order to be entered into the system.
The two systems come with their own pros and cons. Barcodes are generally best for inexpensive, small items that are frequently moved or sold, which is why this system is common in grocery stores or pharmacies. RFID tags are better for owned assets, however, and allow for faster and more secure auditing of existing items. By one count, RFID tag reading is faster than barcode scanning by a factor of 20.
Asset tracking is easier with RFID: An RFID reader can log multiple assets at once from anywhere, provided they are within the read range, while a barcode must be within the line of sight of the laser beam itself, and can therefore only be scanned one at a time. RFID is also more secure, since barcodes can be replicated more easily. While barcodes are cheaper – unlike RFID tags, barcodes can be printed onto blank labels – RFID tags are more durable, and offer greater value for their cost.
| RFID | Barcode | |
|---|---|---|
| Technology | Electromagnetic | Laser |
| Average cost per tag | $0.25-$50 | $0.01-$0.05 |
| Read range | Anywhere within limit | Line of sight |
| Range limit | 10-600 ft. | 2 in.-2 ft. |
| Read speed | Multiple | One at a time |
| Life span | 3-25 years | 1 year |
| Memory capacity | Varies | None |
GPS offers an even more powerful version of asset monitoring than active RFID tags. The major difference in the benefits offered by RFID and GPS is the frequency, amount, and type of data each one can log. RFID can send data, but only when logged by a handheld reader; meanwhile, a GPS can bounce signals off a satellite, delivering them directly to its software anywhere in the world as frequently as every five seconds.
GPS hardware units (pictured below) are slightly larger than active RFID tags. These units can be plugged into a vehicle or directly wired to its engine, which allows them to track engine status, log when the ignition turns on and off, and calculate how many hours it has been in operation. Many GPS trackers can send automatic text or email alerts to managers, letting them know details like when a driver takes a turn too hard, or passes outside of a certain geographic region.
An example of GPS tracking hardware device. Image source: Orbcomm
While RFID is used for keeping track of fixed and movable assets, GPS is specifically oriented towards large, high-value movable assets, from construction equipment to forklifts and other vehicles. Since GPS trackers can tell managers where their assets are in real-time, managers can be sure of exactly where their assets are, rather than just checking in at individual locations, as they do with RFID tracking systems.
| RFID | GPS | |
|---|---|---|
| Technology | Electromagnetic | Electromagnetic |
| Average cost per device | $0.25-$50 | $100-$300 |
| Range limit | 10-600 ft. | None |
| Sends notifications | ✗ | ✔ |
| Life span | 3-25 years | 10-25 years |
| Memory capacity | Lower | Higher |
| Best environment | Multiple facilities | Entire regions |
How Much Does RFID Asset Tracking Cost?
RFID tags’ costs vary hugely; passive tags typically cost between 25 cents and five dollars each, while active tags cost between twenty-five and one hundred dollars. In addition, handheld RFID readers can be pricey – often starting at $1,000-$2,000 – while the software service that gathers, analyzes, and displays the collected RFID data may be another $35-$75 per month.
You can visit Tech.co’s guide to asset tracking costs for more detail, or look at our guide to the (limited) free asset tracking options available.
Or, if you’re ready to start looking at the available top asset tracking vendors, you can get accurate price quotes by filling out our simple one-minute quotes form.
Benefits of RFID
Asset trackers collect data that aids in asset lifecycle management. However, the type of tracking solution that’s best for you will vary depending on your needs. Here are the main reasons why RFID may be the one that works for you.
Benefits of RFID for Asset Tracking:
- Increased Accuracy: RFID drastically improves inventory accuracy, from an average of 65 percent to more than 95 percent.
- Streamlined Receiving Time: RFID technology can lead to a 90% improvement in receiving time, and generally, it reduces labor time significantly.
- Improved health and safety: Information about safety checks can be uploaded to RFID tags, and the use of assets that have failed or missed inspections can be limited.
- Quality Assurance: RFID can ensure a level of consistent quality is maintained, regardless of where your assets are.
- Better Data Accuracy: RFID systems will minimize errors that would usually creep into non-automated asset management because it decreases the chance of mistakes made by humans, such as duplicating data.
- Better Data Visibility: Contemporary RFID systems are cloud-based; everyone who needs to see the data now can.
Benefits of RFID over Barcode Tracking:
- Less Limited: Barcodes require line-of-sight access to every barcode, on every item. You don’t have to be in the line of sight whilst using RFID, which uses electromagnetic radio waves instead.
- Quicker: A barcode machine can only scan one item or asset at a time, whereas RFID tags can be detected and read simultaneously.
- Increased Durability: You can’t rip an RFID tag, nor will it become wrinkled and subsequently unreadable. Overall, they’re much more durable and can withstand much harsher weather conditions, for instance.
- More Information: You can store more data in an RFID tag than you can in a barcode.
Benefits of RFID over GPS:
- Space: RFID tags are generally less bulky than GPS trackers, and are thus better for tracking smaller items like baggage.
- Power: GPS trackers generally require more power than RFID tags.
- Cost: GPS trackers generally cost more than RFID tags which, if bought in bulk, often cost just a few cents per tag.
However, it’s worth repeating that GPS tracking systems provide the ability for companies to track high-value items across much, much larger distances, rather than between individual locations. Although bulkier and more expensive, they have the ability to transmit much more information over larger distances, and can even send notifications.
How Far Away Can RFID Tags Be Detected?
The longer-range “active” RFID tags have built-in batteries and can transmit their own signals rather than “reflecting” an RFID reader signal via an antenna, as passive RFID tags do. As a result, active RFID tags can transmit signals farther than any other type of tag, reaching as far as 600 feet.
That said, passive RFID tags are more common and these can typically only be read reliably from about 10 feet away. They’re designed to be approached by a worker with a handheld scanner. If you need to track your assets more proactively, a GPS tracking solution will do the job best.
Disadvantages of RFID
RFID isn’t for every situation. The limits of the technology can lead to security or cost concerns, depending on the industry and circumstances. Here, our research team has laid out the top potential downsides to consider.
- Higher cost: RFID asset trackers are more expensive than barcode scanning systems, and in some cases are ten times more costly.
- Lost signals: Some materials can reduce an RFID signal – metals and liquids in particular may impact the signal.
- Short range: Typical passive RFID tags can send data about 10 feet, but their range can be as short as two feet depending on the type of tag or weather conditions.
- Limited storage space: RFID tags required less power than GPS, but that’s because they’ll store less data overall. This is limiting for operations that need more visibility.
- Security can’t stop third-parties: Anyone with a compatible tag-reading device will be able to scan your asset tags. If your assets are left in public, your data might leak to third parties.
In short, RFID tags are limited by nature. Some operations just need a no-frills solution, and if you need a stronger tracker to net a better asset tracking ROI, there’s always the (pricier) GPS option to fall back on.
Where to Get Started With Asset Tracking Software
Here, we’ve put a table together detailing the best asset tracking software currently available. The best asset tracking tech is currently provided by Verizon, which can keep you up to date with location, status, and other useful information about your assets, and you can get notifications sent straight to whichever device you’d like.
Companies such as Verizon and Samsara offer GPS asset tracking rather than RFID, which is generally considered a power powerful solution with no read range limit, longer equipment life spans, and a higher memory capacity (and in turn the ability to transmit more data).
Verizon will provide you with all the hardware your business needs to set up a GPS tracking system and you won’t need to buy any of this separately. It’s not a hard system to get the hang of, and it’s best suited to small-to-medium-sized businesses.
| Best for: | Free version | Paid version | Pros | Cons | ||||
|---|---|---|---|---|---|---|---|---|
 |  |  |  |  |  |  |  |  |
| Hilti | CloudHawk | |||||||
| Larger companies | Features | Office equipment | Diverse operations | Centralized paperwork | Moveable assets | Simple installation | Companies with heavy equipment | Small companies with fixed assets |
| Free demo | No | 14-day free trial | Demo | None | Demo available | None | Demo | Demo |
| Price on request | Price on request | Price on request | Price on request | Price on request | Price on request | Starts at: $1,295/user/year | ||
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Learn more about the Best Asset Tracking Companies.
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At Tech.co we have years of expertise in our areas, and whether you’re looking for asset tracking or the best website builders, you can trust our opinion. Find out more about how we carry out our research.
How to Choose the Best Asset Tracking System for Your Business
When deciding which type of asset tracking is the right fit for you, you might first want to look into what type of system is commonly used in your particular industry. When deciding for yourself, though, the primary factors to consider are the type of asset to be tracked, and the type of data you need to collect about your assets.
If your assets are small and inexpensive, and you need to track their location only at specific intervals, barcode asset tracking might be the best option for you. It will cost the least, and you probably won’t run into any of its limitations. But if the system’s too ungainly, passive RFID tracking might be a better bet.
If you have larger, more expensive, and frequently moved assets, active RFID tracking might the best system, as it can help your workers easily and quickly log data from assets as they enter a new warehouse. If you run a fleet of vehicles or other high-value equipment, GPS tracking can let you know where each asset is at all times, and can collect plenty of additional data regarding engine status or corrective maintenance needs to boot.
Still unsure? Fill out our asset tracking comparison form and we can help match your needs to the best asset tracking supplier for your business. We’ll even provide tailored price quotes to inform your choice.
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