RFID Asset Tracking

RFID asset tracking systems use radio frequency identification tags and readers to automatically monitor names, locations, and other details about valuable business equipment. Asset tracking systems can dramatically improve efficiency and security for any business with physical assets.

As well as saving time and money, RFID asset tracking can deter equipment theft, increase security, reduce instances of lost or misplaced items, and centralize data history about items' location and use. Find out more using our dedicated asset tracking quote tool.

Of the three main types of asset tracking — RFID, barcode, and GPS — RFID asset tracking systems are particularly useful for operations with small but expensive movable items, which might be moved around a single facility or between multiple ones. Fax machines, medical supplies, laptops, and office chairs might all qualify.

Here, we'll explain how RFID asset tracking systems function, how they compare to barcode or GPS tracking systems, and what to look for when picking out the best RFID tracker for your business needs.

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
• Benefits of RFID vs Barcode & GPS
• The Best Asset Tracking Software
• Find the Best Asset Tracking for your Business
• Frequently Asked Questions

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 data can be written to RFID tags. For example, aspects of 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.

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 or movable assets.

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 afterward. Broadly, this is what the process would entail:

1.  An antenna and an RFID reader are set up at both Warehouse A and Warehouse B.
2. An RFID tag is attached to Asset1.
3. Asset1 comes into the range of Warehouse A.
4. The antenna at Warehouse A picks up Asset1's RFID tag signal.
5. The RFID Reader at Warehouse A, which is wirelessly connected to an antenna, transmits Asset1's data to your computer.
6. The data is logged in your tracking database.
7. Asset1 is then loaded onto a lorry inside Warehouse A and sent to Warehouse B.
8. Asset1 comes into the range of Warehouse B.
9. The antenna at Warehouse B picks up Asset1's RFID tag signal.
10. The RFID Reader at Warehouse B, which is wirelessly connected to an antenna, will transmit Asset1's data to your computer.
11. 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.

Lululemon, which makes athletics goods, uses RFID tags in its 600 worldwide stores and reports a 98 percent inventory accuracy. According to McKinsey, lululemon utilized this location information to manage inventory levels as demand changed during the pandemic.

Last year, Amazon started using RFID technology in its Amazon Go stores so that people can pay for goods without any checkout mechanism or cashiers.

Active, Passive, and Semi-Passive RFID tracking

RFID asset tracking comes in three main categories: passive, semi-passive, and active (more on this further down in the article). 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, so have the largest read range out of the three types of tags, so are the best choice for things like real-time tracking. They are often designed to host additional features like this, 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. It's one of the better options for things that are stored for extended periods of time, or 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 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.

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.

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.

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.

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 Tracking vs GPS Tracking

GPS offers an even more powerful version of asset tracking 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.

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.