Radio frequency identification (RFID) is an advanced form of identification technology that can be used in many small business applications. This method of transferring data automatically identifies and tracks objects using tags containing electronic information.
Larger companies already use these smart tags instead of Universal Product Codes (UPC) as a preferred method of transmitting data in business applications such as supply chain logistics. But they can also help solve many challenges small businesses face.
Here are the basics of how radio frequency identification works, its benefits, and how you might be able to use it to help run your small business.
How the Technology Works
RFID essentially functions like a barcode, but instead of relying on a visual scan to transmit data, it uses radio waves and reads data on the tag containing electronically stored information. These ID tags transmit data much faster than a typical barcode and are part of a larger networked system that stores the information automatically.
For example, manufacturers use smart tags to track their products’ location in the supply chain, from the factory where they’re made to the customer’s hands and at any point in between. Tags are not only used in product tracking but are found in key fobs, building ID tags, contactless payment systems, social media marketing tools, and more.
Benefits and Advantages of RFID vs. Barcodes
Radio frequency ID tags run much more efficiently than barcodes because their data can be updated, changed, and locked, and business owners are able to monitor how quickly items are selling. The tags have read and write capabilities and, unlike barcodes, don’t stay static after they’re created.
Barcodes can’t send out any information, whereas smart tags are able to transmit information almost immediately and plug it directly in your computer database. Smart tags eliminate the need for companies to separately scan each barcode on every box of products to maintain inventory.
Small Business Applications
Many big companies and retailers now require their suppliers to tag shipments with radio frequency ID tags so all the corresponding data can be automatically recorded as soon as the items arrive. Small businesses can also use smart tags to help organize and monitor data, take inventory, and eliminate informational errors.
Tracking inventory with smart tags improves accuracy, decreases the need for manual labor and scanning, and helps eliminate proofing and correcting errors. Small businesses can use it as a tool for document management, server and equipment tracking in IT, renting equipment, reducing costly excess inventory, and eliminating time-consuming data entry. Using radio frequency ID helps small businesses monitor valuable assets and tracking high-turnover stock.
Many RFID providers will offer starter kits with a reader and a few tags for a few thousand dollars. If you’re thinking of buying one for your business, make sure the kit comes with installation and support.
Start by using it with a single application, such as asset tracking, and once you become accustomed to the technology you can expand from there. Then you can start adding accessories, such as printers, handheld readers, mounts, and antennas. Help your small business run more efficiently and eliminate data errors with smart tags.