Should you use RFID for stock management in your warehouse?

With today’s fast pace retail, warehouse management is becoming more and more challenging. Without sufficient insight into inventory, supply chain, and processes, stores might lose sales due to missing items in the warehouse. The lack of information affects the overall customer experience – if a customer wishes to buy a product of a certain size or colour and the item is out of stock, the store not only loses sales but also customer satisfaction.  This is why proper stock control is essential for modern-day businesses.

We have talked about why it is important to use inventory management software to keep count of stock when selling on multiple platforms, and we have talked about the challenges when it comes to keeping track of stock. A warehouse is composed of multiple elements that need to work together in order for you to precisely know what items you have in stock or how many should you order in the future. We have mostly talked about the software side of things, but now let’s have a look at the hardware a bit, and when it comes to knowing how many items you have in the warehouse the first thing that should come into your mind is RFID technology.

What is RFID technology?

RFID technology ( Radio Frequency Identification) refers to the digital data encoded in smart tags captured by a reader through radio waves.

RFID technology has revolutionized stock control and inventory management. RFID for stock management provides a fast, easy and accurate way of tracking stock, that can help improve customer satisfaction and increase sales.


Why is it advised to use RFID for stock management?

RFID stock management gives the user real-time and detailed information about the inventory levels, as well as detailed information of stock – such as quantity, models, colour, sizes. Since all the items are tracked using RFID tags, it can eliminate stocking issues and improve security in your retail store.

It helps with inventory visibility and boosting productivity

The simultaneous scanning of products with an RFID reader drastically lower the time spent doing inventories which brings a rise in productivity and less manual work for the staff. Instead of tracking stock they have time to focus on other aspects of the business such as sales, customer service. By using a handheld RFID reader, one person can do stock tracking by scanning multiple items in only a few minutes. This means that stock takes can be done on a daily basis.

RFID for inventory management also reduces the labor costs by 50% – 80%. Inventory check-in, counting and shipment verification can be done very quickly and automatically in a few scans without the need for multiple employees to process them. These savings must be weighed against the cost of investing in RFID inventory scanning solutions.

You can use RFID to track returnable assets – this can come in handy for companies that utilize returnable fleet assets such as containers and pallets. Utilizing RFID chips can help you track these assets through the entire supply chain loop and provide increased visibility on inventory locations. This has a proven benefit of increasing the returns rate if these assets and reducing theft or neglect.

We have talked about the benefits of using RFID technology for Inventory Management, but let’s have a look at the cons:

You won’t be able to use cellphones as scanners – even though they are fixed and remote RFID scanners available, it is not possible to use a phone to scan them – as you would do with barcodes. This is limiting as it requires drivers or employees in the field to use specific RFID scanners – and phones cannot be used as a backup if the provided readers fail.

And there are also the costs involved- RFID tags cost significantly more than barcode labels – in addition, they utilize specific readers that must be purchased from the limited number RFID equipment manufacturers – this can add significant costs when scaling these solutions with the requirement for additional scanners and RFID tags.


Overall it is important for you to know whether your business needs an RFID scanning system implemented or if you can continue managing your products using barcodes and barcode scanners.

In general, the benefits seem to outweigh the drawbacks when it comes to closed-loop systems – for almost every application, RFID has a specific advantage over other technologies and manual processes. It should be noted that RFID does have its disadvantages when it comes to some applications – mainly because it’s short-range technology and would not work for tracking a ship at sea or a truck on a highway for instance. Once your warehouse is filled with RFID tagged items, you can cycle count in a fraction of the time compared to traditional methods.