Please describe some of the technology's shortcomings.
It would be difficult to explain the disadvantages of radio frequency identification, as RFID is merely a tool. Just as a hammer can be used to drive nails, RFID can be utilized to identify and track objects remotely. What are the disadvantages of a hammer? Well, if you are trying to drive nails, there aren't any. If you are trying to cut wood or tighten a bolt, however, it won't work at all.
So RFID is effective at what it is designed to do. It won't fix your supply chain or guarantee sales at your stores. But it will help you identify what objects you have and where they are located, and that information can help you fix your supply chain or have goods on the shelf when customers want to buy them.
Another tool that can be used to identify and track objects is, of course, a bar code. If you want to compare the strengths and weaknesses of these two tools, a bar code (the data carrier itself) is less expensive than an RFID transponder. That is the bar code's only real advantage. The cost of getting the data from the data carrier is higher with bar codes, because you usually need to employ workers to scan the bar code. With RFID, the data can often be captured without human intervention, and thus at a much lower cost.
RFID has shortcomings, just as bar codes do. You can't, for instance, read a hundred bar codes on items within a box. You can with RFID, but not if the tags are within a metal enclosure, since the RF waves will bounce off the metal. What's more, you can't always read tags with perfect accuracy since radio waves might be blocked or cancel each other out. Then again, bar codes aren't always readable either—they can become damaged and unable to be read, and humans often make errors when reading bar codes.
When companies evaluate which technologies to deploy, they must start with the problem. If you need to drive a nail, use a hammer. If you need to identify objects remotely so they can be tracked and the information can be used to create some business value, RFID might be the right tool for the job.
—Mark Roberti, Founder and Editor, RFID Journal