What Are the Disadvantages of Using RFID to Track Assets?

Are there any reasons why the technology shouldn't be used for that purpose?

—Don

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Don,

Well, that depends. Radio frequency identification technologies—there are a variety of systems available—are tools that you can use to solve multiple business problems or improve different tasks. Asking about the disadvantages of these tools is a bit like asking about the disadvantages of using a screwdriver. If you are trying to screw in a screw, there are few, but if you are trying to hammer in a nail, there are some big ones.

If you are trying to locate large assets in a huge factory, an active RFID-based real-time location system is probably going to be the right tool. The cost of the system might be seen as a disadvantage (tags cost $10 and up, depending on their capabilities). The labor involved in tagging and with replacing tags when a battery is depleted might be viewed as disadvantages, just as the cost of a screwdriver and the need to buy several different types and sizes of screwdrivers could be a disadvantage. But if the system solves production delays, reduces labor costs, lowers safety stocks and delivers a big return on investment, then it's worth it.

Similarly, a low-cost passive tag has costs associated with buying the tag and applying it to an item. A lot of companies get hung up on this and don't examine what the benefits are. I once appeared on a panel with an executive from the Grocery Manufacturers Association, who said, "You can't put a 20-cent tag on a case of shampoo that has a margin of $1. It eats up too much of your profit." I responded: "What if that 20-cent tag saves you an additional dollar and adds 80 cents to your margin." The person had never considered the other part of the equation and just looked at me dumbfounded.

Focusing on the disadvantages, in my view, is a mistake. Instead, I suggest you focus on the problem you are trying to solve or the benefit you are trying to solve and evaluate whether RFID technology is the right tool to solve that problem. The cost of the system, the limits of what it can do—you can't read a tag through steel walls, for example—are just part of an overall evaluation, just as you would balance the cost of a new table saw with the amount of time it would save you on a project and the cost of hiring a professional to do it.

Mark Roberti
Founder and Editor
RFID Journal