What is RFID Tracking?

RFID scanner

Is radio frequency identification (RFID) the right tracking system for your business?

RFID ScannerNever lose track of your assets with an RFID tracking system

RFID tracking is a way to help you keep track of tools. You can either invest in it as a separate system, or part of a larger asset tracking system .

If you took a moment to think about the amount of time your team spend looking for lost or misplaced tools, you’d probably be a little concerned. Let’s put this in some context.

Say your business consists of a team of ten workers, and each member of the team spends half an hour a day looking for a misplaced tool – that’s five hours of work a day, wasted.

RFID tool tracking puts a stop to time-wasting. Instead of signing tools in and out in a diary or spreadsheet, RFID tracking uses radio frequency to detect which tools are in the room, and which ones aren’t.

This data is then automatically synchronized with a software database on your computer or smart device, so when it comes to finding tools that you’ve misplaced, it’s simply a case of looking up their location on the system.

How Does RFID Tool Tracking Work?

RFID tracking is a pretty simple concept. It’s a system that’s made up of three things:

  1. A tag that emits radio waves
  2. A reader that detects radio waves
  3. Software


The best asset tracking software comes with RFID tags, which in themselves come in all shapes, sizes and materials. This makes RFID tool tracking suitable for lots of different types of tool. The type you need will depend on the tool you’re looking to track. These are some examples of the different types of RFID tags:

  • Standard tags, suitable for most tools
  • RFID tags for metal tools
  • Extreme tags for harsh environments
  • Flexible tags for uneven tool surfaces
  • Pallet RFID tags for attaching to wooden surfaces

In addition to the shape, size and material of the tag, you also need to consider how the tag works. For example, some RFID tags emit a radio frequency thanks to their own power source, while others rely on the frequency waves emitted by the RFID reader for energy. Here are the three different types:

  • Active
  • Passive
  • Semi-passive

Active RFID tags Active RFID tags use a battery to power the sensor and the electric circuit, and to produce a radio frequency. These are often the most expensive to purchase, and are therefore the least common choice.

Passive RFID tags Passive tags need to be in the vicinity of the RFID reader to work, as they do not have their own power source. They use energy from the waves emitted by the RFID to produce their own signal. These tags are the cheapest option.

Did You Know?

Passive tags can come in the form of key chains, cards and key fobs

Semi-passive RFID tags Semi-passive RFID tags also use energy from the waves emitted by the RFID scanner as their power source for producing a signal. While they do have their own battery, this is used to power the tag’s sensor and circuit.

RFID Readers

RFID scanners work by detecting the radio frequency that each tag emits. Unlike barcode scanners, RFID scanners are capable of reading multiple tags at the same time, which means they can pick up the signals of all the tags (or tools) in the room.

RFID Software

RFID software hosts a database that stores each of your tools and the tag attached to it. When the reader registers the tag on the tool, the information is sent wirelessly to the database on the software, where it’s registered present or not present.

What RFID Tool Tracking System do I Need?

You’ll probably require a combination of different tags, depending on the size and material of the tools that you’re looking to track.

This is where speaking to a tool tracking supplier will come in handy. We’ve partnered with a number of tool tracking suppliers to provide businesses with quotes and advice on asset tracking systems.

Simply fill in our form with a few details about your business and the best suppliers for your requirements will be in touch.

RFID Tool Tracking VS Barcode Scanning

The most common alternative to RFID tool tracking is barcode scanning. They’re very similar bits of kit, but which one is better?

Investing in a barcode scanning system would probably work out cheaper than investing in an RFID tool tracking system. But, as is often the case with the cheaper option, it’s never the best.

Take a look at the table below to see how RFID tool tracking compares with barcode scanning.

RFID Tool TrackingBarcode Scanning
Scan multiple items at a timeScan one item at a time
Field scanning detects code quicklyRequires exact line up with code to read it
Tags made from durable materialsBarcode labels made from flimsy materials
Can get fairly expensivePretty cost-effective
Suitable for medium and large businessesSuitable for small businesses

What are the Other Asset Tracking Options?

An asset tracking system is essential for any business that owns and uses lots of equipment. It doesn’t have to be tools; it can be electrical items, cleaning products and vehicles.

There are plenty of different asset tracking solutions out there, with RFID tracking being one of them. In addition to RFID tracking, there’s:

  • Barcode scanning
  • Bluetooth tracking
  • GPS tracking

Generally, barcode scanning and bluetooth scanning are best for smaller scale asset tracking operations. That could be in terms of the size of the business, or in terms of the tools that you want to track.

GPS tracking is used to track larger machinery; think JCBs, generators, cranes and tractors. Often, businesses that invest in GPS tracking also invest in geo-fencing – a type of technology that creates a virtual perimeter around your assets, and sounds an alarm if your asset travels outside the perimeter without your consent.

What we’re saying is that RFID tracking on it’s own often isn’t enough. Asset tracking isn’t a one-size-fits-all solution. It usually combines two or more asset tracking tools, which are headed up by a fully integrated software platform.

Want to Invest in an Asset Tracking System?

When there are so many elements to an asset tracking system, it’s best to receive advice from an expert. They’ll also be able to provide you with a bespoke quotation for an asset tracking system based on your business’s individual needs.

The quickest way to go about receiving quotes and advice is to fill in our short form. Enter a few details about your business, then the best suppliers for your requirements will be in touch. Easy!

Written by:
Duncan Lambden
Duncan (BA in English Textual Studies and Game Design) is one of Expert Market's local Software Experts. His articles focus on ecommerce platforms and business software that allows small businesses to improve their efficiency or reach, with an emphasis on invoice financing, project management, and customer relations.
Reviewed by:
Maïté Bouhali
Maite began her career with Expert Market nearly four years ago as a writer. She quickly developed a passion for the challenges faced by small businesses and now endeavours to help them make informed decisions for their future. In her current position as Business Software Editor, Maite works closely with writers to ensure that each article is informative, well-researched, engaging, and actionable for readers. With extensive knowledge of CRM, vehicle tracking devices, and fuel cards, she is meticulous in her review of each article and provides detailed feedback before publication. Whether you're seeking to stay informed on the latest trends in business software or need guidance in selecting the most appropriate software for your organisation's needs, Maite is here to help. With her sharp eye for detail and commitment to quality, she is dedicated to supporting businesses in achieving their goals.