Asset Management

How Does an RFID Asset Tracking System Work?

February 28, 2023 • 5 min read

Most businesses rely on an asset tagging system to identify, track and manage their inventory. For some businesses, a barcode or a QR code label is the perfect solution. Other companies, for various reasons, decide on an RFID asset tracking system. 

In this article, we’ll define RFID asset tracking, explain how RFID asset tracking works, touch on less expensive alternatives to RFID technology, and reveal how your business can better manage its assets with or without RFID tags.


What is RFID asset tracking?

An RFID asset tracking system streamlines and automates some aspects of asset management, including locating individual assets. This is made possible by RFID (radio frequency identification) technology, both in the form of an RFID tag attached to an asset and via RFID management software. 

RFID asset management systems help businesses track individual pieces of inventory that are affixed with RFID tags. RFID tags are automatically read and recognized by fixed RFID scanners placed strategically throughout warehouses or other locations. Alternatively, RFID tags can also be read by handheld scanners, including those on smartphones or tablets. 

Related: RFID vs. Barcodes for Inventory Management


How does RFID asset tracking work?

RFID asset tracking technology relies on radio waves to identify, monitor, and track products as they move from place to place. Since RFID tags are always “pulsing,” RFID readers instantly read and capture data, helping businesses track large amounts of inventory quickly.

All RFID systems require businesses to purchase the following:

  1. RFID tracking software and a computer or other device to run that software on
  2. RFID readers
  3. Antennas
  4. RFID tags (can be passive, semi-passive, or active, depending on business needs)

Once businesses have all the equipment, tools, and software they need to get started, they’ll set up an RFID asset tracking system. In general, the process goes like this:

  1. Relevant data is synced to an RFID tag, then affixed to the corresponding asset
  2. A nearby antenna recognizes the signal pulsing from that RFID tag
  3. An RFID reader—which is wireless but linked to the antenna or held by an employee—reads the tag’s data
  4. That data is sent to the asset tracking software, where an employee can manage, review, or edit the information 

About RFID Tags

There are three different types of RFID tags: active, passive, and semi-passive. 

Active tags are battery-powered, expensive, and constantly emit signals. They are great for tracking vehicles, tolling cars on highways, and other important, time-sensitive activities. 

Passive RFID tags are powered by readers or antennas, not batteries. They are small, lightweight, and less expensive than active RFID tags, and they are most commonly used for inventory management. 

Finally, semi-passive RFID tags are somewhere between active and passive. They are often used to monitor environments rather than to track inventory. 

Related: What’s the Difference Between RFID and NFC?


Benefits of RFID asset tracking

Like any automated asset tracking system, RFID technology can help your business save time, money, and stress but increasing visibility, reducing labor costs, and reducing the risk of inventory shrinkage. By implementing an asset tracking system and knowing where assets are, what condition they’re in, and where they’ve been, your business will enjoy greater control and understanding of its assets and their value over time.

Your business will also reduce reliance on manual asset tracking systems like asset lists and asset tracking spreadsheets, which are challenging to scale and prone to human error. Instead, your business can redirect both time and money to other efforts, including customer service, marketing, and business growth.

Related: What is a Fixed Asset?


Alternatives to RFID

While RFID asset tracking systems are the right choice for some businesses, less expensive inventory management software solutions offer many of the same features and benefits. Certain inventory software solutions can help your business track assets and inventory just as efficiently as RFID technology, but using barcodes and QR codes.

Unlike RFID tracking systems, your business won’t need to reconfigure its warehouse to implement a barcode or QR code system. Instead, your business can simply connect the barcodes and QR codes already on its inventory to an inventory app and instantly create an automated asset tracking system. If assets (or inventory) do not already have barcodes or QR codes affixed to them, inventory apps like Sortly allow customers to rapidly generate and print barcodes and QR codes using label paper and regular printers. 

No matter how your business decides to tag and track assets, it’ll need some form of asset management strategy in place. When selecting an asset tracking solution, look for one that’s flexible, scalable, and ready to grow with your company. You may also want to look for a solution that every person on your team can use, whether tech-savvy or not, and whether working on-site or remotely. 

Related: What’s Better for Inventory Management: Barcodes or QR Codes?

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About Sortly

Sortly is a top-rated asset tracking solution that helps businesses of every shape and size track assets. With lightning-fast automation features such as barcode and QR code scanning, the ability to quickly generate and print custom barcodes and QR codes, plus customizable reports, personalized alerts and reminders, and more, there’s no shortage of ways Sortly can help your business keep tabs on your assets.

All your business needs to get started is a desktop computer, a smartphone, or a tablet. In minutes, you can create a visual, highly-detailed, intuitive database of every asset and piece of inventory your business owns. Sync barcodes and QR codes, upload attachments and images, and include all the item details you’ll ever need, such as condition, location, and value. Sortly can integrate with external handheld scanners, or you can simply use the built-in barcode and QR code scanner to manage all your assets and inventory.

Wondering whether Sortly’s asset tracking system is right for your business? Try a free, two-week trial of our best features today.