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How Does RFID in Manufacturing Work? (Simple Guide)

James McKellar July 29, 2021 7 min read

Over the last decade or so, the growth of RFID technology has been exponential, from the wider availability of the technology to the better reliability, to prices decreasing there has been a big shift.

RFID is used in a plethora of industries and different scenarios, for example, RFID is commonly used as part of an access control system or even for short range identification.

This guide will aim to shed some light on Radio Frequency in Manufacturing and give you a better understanding of how it works, some of the benefits and how it can be implemented.

In summary, we will be covering the following in this guide:

  • RFID in Manufacturing Basics
  • Features of RFID in Manufacturing
  • How RFID in Manufacturing works
  • RFID in Manufacturing Benefits 
  • Industries for RFID in Manufacturing
  • Summary

What is RFID in Manufacturing?

Radio Frequency Identification (RFID) has seen a host of uses from security systems to replacing tickets at theme parks. RFID technology is popular across the globe and has seen everyone from local businesses to multi-national companies explore its implementation.

When we are referring to RFID in manufacturing we are talking about the use of radio signals to help various areas, from supply chain to inventory management, to production.

RFID tags can store a broad assortment of data that can be used in several ways within manufacturing and can help streamline and optimise the whole production process. 

The manufacturing process can be made more flexible within a range of different categories, famously the automotive industry uses a lot of RFID to improve the whole operational side.

In the next few sections, we will explore RFIDs role in manufacturing in a little more detail, looking at the actual areas it can target and improve.

Key Components of RFID in Manufacturing

A lot of people compare RFID and NFC technologies as both rely on short range communication between two devices to share data. 

NFC has been popularised mostly by its usage in mobile payments and contactless cards, whereas RFID has been more widely used for a variety of projects, devices, and companies.

As there are a lot of ways RFID in Manufacturing can be implemented, we will be broadly looking at the key components that are typically used when incorporating this technology into an industrial setting.


These are the way the device or asset will communicate with the system. RFID Tags can be either active or passive, the former has a battery so is always on or ‘active’ whereas passive is only powered up when it is scanned.

To put RFID Tags into context, when a shipment is sent off, you can quickly scan all of the assets upon exit and entry at the other end, saving time and resources.

RFID Reader

Often referred to as the Radio Frequency Identification Scanner or scanner for short, this is how the information is read and communicated with the system.

Each RFID Tag has its own unique identification, like a form of barcode, that can be batch read and allow everything from inventory management to logistics to manufacture, to run more smoothly.

RFID System or Database

Regardless of your setup, Radio Frequency Identification works the same way, via radio waves communicated from one device (or tag) to a database via a scanner or reader.

The RFID system stores and manages the data provided by the unique codes from the RFID Tags. From this database, you can oversee all of the tag information, update data and track patterns or identify anomalies.


How Does RFID in Manufacturing Work?

As there is a myriad of uses for RFID in Manufacturing, we are going to cover some of the core areas within the technology that is implemented throughout the process. 

This will give you a better grasp of how important this technology has become in a modern day manufacturing operation.

Plant Security 

Radio Frequency Identification can be used in security for manufacturing too, for a wealth of different things, most people may think of people access control. For instance, RFID can be used in place of passwords to identify different staff members.

Taking this one step further, if an error occurs you can track the problem back to the source and find out who or what was responsible for the issue.

Inventory Management 

RFID in Manufacturing can also play a vital role in inventory management. Being able to quickly and accurately scan your inventory not only saves time and effort but can have additional benefits.

Understanding your inventory will give you a better grasp of your WIP (Work in Progress) and help you manage your stock or parts easier. Leading to the reduction in wastage and keep WIP running smoothly.

Quality Control

Using RFID technology can ensure that quality is maintained in harsh and challenging environments, certain tags can be used to track changes and any damage occurring.

Data can be fed back to the system throughout the manufacturing process and highlight any flaws or changes in state.

Production Execution

Having the ability to access real time product execution information allows a factory to speed up its processes and limit downtime. 

RFID Tags allow you to determine, manage, and modify production steps to each unique project. If you are a company that undertakes a lot of custom jobs this can give your machinery or workers the information efficiently.

Equipment Optimisation 

Being able to improve your equipment’s efficiency is one of the ways that RFID works in manufacturing. Knowing when your equipment or machinery needs to be repaired or is operating at a sub par level helps control this.

Utilising RFID Tags you can collect data about your machinery’s health and status, which will help reduce or even eliminate downtime.

Logistics and Tracking 

At the end of the manufacturing process is the transport and eventual sale or usage of the items, RFID technology is equally important at this stage too.

RFID tags can be used to keep track of assets and provide additional information about the logistical side of the manufacturing process.


What are the Benefits of RFID in Manufacturing?

In this section, we will briefly look over some of the benefits of RFID in Manufacturing. We will aim to cover broad benefits which should benefit the majority of manufacturers and try not to be too niche. 

Operational Benefits

Inventory Counting 

It does not matter what area of manufacturing you are working in, having to do stock or inventory checks is tedious and frankly, the traditional method can be a waste of time.

Having a way to efficiently and automatically scan a whole room or section of a warehouse is significantly easier and allows time to be spent on other tasks.


Supply Chain Visibility  

Having an increased level of visibility in the whole supply chain has its own series of benefits, helping with resource management, reducing shipping errors, and planning.

One of the major issues traditionally with supply chains is the fact that huge portions of it can be shrouded in mystery and present issues along the way, RFID technology helps alleviate those issues.


Asset Tracking

Everything from the smallest part to a completed car can be tracked. As long as an RFID Tag is placed on or within the asset, it can be tracked and managed with ease.

To contextualise, knowing exactly how many of something you have will allow you to manage reordering or shipments much more effectively.


General Benefits 

Reduces Errors

This can be several errors, by creating a more visible chain from start to finish you can identify patterns or highlight issues, pinpointing where they occurred. 

For instance, shipping volume errors can be eliminated by knowing the exact amount of assets being sent.


Controlled Environment 

The new information provided by the addition of RFID in Manufacturing creates a much more controlled environment and makes management much simpler.

Putting this into a real life scenario, you will now have access to data such as instant inventory checks, or if there has been a production error. 


New Layer of Security 

Having a system that can streamline operations and double up as a form of security is the perfect example of ‘two birds, one stone’.

With stricter control on your products and raw materials, you can limit internal and external threats, in addition to tracking your assets to their destination.


The RFID in Manufacturing Industry

Wherever you are on the supply chain, Radio Frequency Identification can provide benefits and its popularity has increased because of its variety of uses.

Ideally, by this point, you have seen the tip of the iceberg that is RFID in Manufacturing, and how broad and widespread its usage is within the industry as a whole.

RFID technology has been evolving and shaping how we view the supply chain as a whole and will only continue to profoundly impact manufacturing.

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It seems that people and vehicle access control is an incredibly complex world using hard to understand technology, yet it impacts so many of the environments we interact with on a daily basis.

We are here to fill in the disconnect. We'll break down access control, the benefits, and drawbacks as well, including expert insight based on over 30 years experience in the industry operating as an independent British company. Our goal is to give you ALL the information so you know what's right for you.

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James McKellar

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