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RFID vs. Barcode: Which One Is Right for Your Organization?


When you are looking to implement a new supply chain solution for your warehouse, you will need to decide whether to use radio frequency identification (RFID) or barcodes. Knowing how each of these two solutions work, their capabilities and limitations can help you make a more informed decision.

Radio Frequency Identification (RFID)

RFID are chips that are placed on products to help identify them. The chips contain all the information about the product and how it is supposed to be used. Each chip is capable of holding a vast amount of data, which makes them ideal for everyday use. For example, the chips can provide information on where a particular item is within the system, its transit route and the contents or the item.

RFID chips are made from hardened plastic, are very durable, virtually indestructible and can be stamped on nearly all kinds of materials. The chips can withstand harsh weather conditions, including extremely high temperatures.

RFID chips do not have to be manually scanned through a line-of-site system. A scanning device can be at any place within a specified distance and will still get all the data from the chips. Most systems can read up to 800 chips per second.

RFID chips are embedded in a unique way, making it impossible to copy them. This is why the technology is used in security applications such as ID cards.

Below are important highlights about RFID chips:

i) RFIDs have a high read rate. More than 100 chips can be read simultaneously.

ii) RFIDs do not require a line of sight to be read. The items can be read regardless of the direction where they are oriented. The only condition is that the items should be within a specified distance.

iii) Human capital is not required to read RFID chips. When the system is set up, it is completely automated.

iv) RFIDs have read/write capability. The chips can be read, written or modified even after being placed on items.

v) RFIDs have higher security and are made from hardened plastic that can withstand harsh conditions. The chips can still be read even in harsh environments.

vi) RFIDs are difficult to replicate. Their data can be password-protected, encrypted or have a “kill” feature than can remove the data in case of tampering.

vii) RFIDs can be used to trigger various events (for example, starting alarms, opening doors, etc.).


Barcodes are popular in many organizations and were the standard identification for a long time. Barcodes contain information about the place of manufacture and ingredients of an item. The information is usually encoded in the barcode and can be read through a barcode reader. Barcodes are found in almost all products in grocery stores and retail shops.

Barcodes are usually printed on a sticker that is placed on each bin. If the sticker gets dirty, it can be difficult for the reader to interpret the code. However, barcodes are easy to replace. In case a barcode is damaged or too dirty to be read, you can easily print a new one and place it on the bin.

Barcodes require line-of-site readings. An item has to be passed through a barcode reader at every phase for its information to be read.

Below are some highlights of barcodes:

i) The read rate of barcodes is very low. The chips can only be read manually, one at a time.

ii) Barcodes require a line of sight to be read. The scanners must see each item directly in the scan. Moreover, the items have to be oriented in a specific manner.

iii) Human output is required to read barcodes. Employees are required to scan each barcode.

iv) Barcodes cannot be modified or edited when stamped on an item.

v) Barcodes are not as durable as RFIDs. They can easily get damaged, removed and will fail to be read if they are greasy or dirty.

vi) The security of barcodes is low. The barcodes can be easily reproduced and even counterfeited.

vii) Barcodes cannot be used to trigger events.

When it comes to price, barcodes are cheaper than RFIDs. However, their implementation, required system scanners and manpower makes them expensive especially if you manufacture thousands of products.

Whitepaper: Principles of Inventory Costing


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