What is RFID? How It Works and Its Applications

In the era of Industry 4.0, the ability to accurately and quickly track and manage goods, assets, and information has become increasingly important. RFID (Radio-Frequency Identification) has emerged as an excellent solution that plays a key role in automation, operational efficiency, and cost reduction, and it has proven its effectiveness in various industrial settings. This article explores what RFID is, how it works, and where it is being applied.

RFID (Radio-Frequency Identification) is a technology that automatically identifies target objects using radio waves (wireless frequency). When a tag (RFID Tag) responds to the electromagnetic field emitted by an RFID reader, it transmits its stored unique identification number or data to the reader. Thanks to this mechanism, the system can identify and track tagged objects and collect information even without direct contact or line of sight.

An RFID system consists of four main components, each performing a unique role in the identification and data transmission process.

RFID Tag
Composition: A tag consists of an integrated circuit (IC) chip and an antenna. The IC chip stores a Unique Item Identifier (UII) and processing logic, while the antenna transmits and receives radio signals.

Function: When receiving the electromagnetic field from the reader, the tag reads the data stored in the chip and responds. Tags can store a variety of information, such as serial numbers, product codes, production dates, and movement history.

RFID Reader
Main Role: The reader emits radio waves at specific frequencies (LF, HF, UHF) to activate the tags. When a tag responds, the reader converts the received signal into digital data for processing.

Types of Readers:
Fixed Reader: Installed at logistics entrances or warehouse gates for continuous tag scanning.
Handheld Reader: Portable and used by personnel for inventory checks or field inspections.

Antenna
Role: Acts as the medium connecting the reader and the tag through wireless communication. It emits signals to activate tags and receives their responses.

Characteristics: The size and shape of the antenna determine its coverage and read range. Depending on usage, either directional or omnidirectional antennas are selected.

Middleware/Backend Software
Function: Processes and filters raw data transmitted from the reader, extracts necessary information, and sends it to a central management system like ERP or WMS.

Key Features: Provides real-time dashboards, alerts for anomalies, report analytics, and API integration with other systems.

When the reader emits a radio frequency (RF) signal, any tag within range is activated. The power source and response method vary depending on the type of tag (passive, semi-passive, active).

Passive RFID Tag
Since it has no internal battery, it operates by absorbing energy from the electromagnetic field of the reader. The IC chip processes the data using this energy and sends a response signal back to the reader.

Semi-passive (Battery-assisted Passive) RFID Tag
It contains a built-in battery that powers the chip and sensors, but the response signal is still transmitted using the electromagnetic field from the reader. Thanks to the battery, the chip can operate from a greater distance and may include sensors such as temperature or humidity.

Active RFID Tag
It operates using its own battery and actively emits periodic signals (beacons) without waiting for a reader’s signal. This allows for read ranges extending tens of meters.

After decoding the signal from the reader, the tag sends data such as its unique identifier back to the reader. The reader receives this bit stream, converts it into digital information, and transmits it to the middleware or records it in a database.

The frequency band determines penetration power, data transmission speed, and reading distance. Three major frequency bands are commonly used:

LF (Low Frequency, 125–134 kHz)
Read Range: Short, up to about 10 cm; slow data transmission speed.
Advantages: Stable operation even in environments with metal or water, with minimal interference.

Applications: Livestock management, access control, simple attendance tags.

HF (High Frequency, 13.56 MHz)
Read Range: Approximately 10 cm to 1 meter; faster than LF.
Advantages: Moderate cost; can penetrate some non-metallic materials.

Applications: Library book tags, transportation cards, cinema tickets, asset management.

UHF (Ultra High Frequency, 860–960 MHz)
Read Range: 1 to 10 meters (up to 15+ meters with high output); fast data transmission.
Advantages: Capable of bulk reading of multiple tags simultaneously, suitable for large warehouses or supply chain management.

Disadvantages: Sensitive to metal and water, performance may degrade; initial investment cost is relatively high.

Applications: Warehouse management, supply chain visibility, access and shipping control, retail customer movement analysis.

Passive RFID Tag
No battery; powered by the electromagnetic field of the reader.

Low cost, small size, and can last for decades.

Disadvantages include short read range and dependency on reader output.

Semi-passive (Battery-assisted Passive) RFID Tag
Built-in battery powers chip and sensors; response is still dependent on the reader’s electromagnetic field.

Chip can operate even when reader energy is insufficient; capable of integrating sensors (e.g., temperature, humidity).

Shorter battery life and higher cost compared to passive tags.

Active RFID Tag
Powered by an internal battery and sends signals independently without waiting for the reader.

Very long read range, up to tens of meters, and can periodically emit beacons.

Larger size, higher cost, and requires regular battery replacement.

Automated Product Tracking
When products pass through gates equipped with UHF readers, RFID tag data is automatically recorded. This allows companies to accurately track the location, quantity, and movement history of goods.

Fast Inventory Audits
Instead of manual inventory counting, handheld readers or portal antennas can be used to simultaneously read dozens to hundreds of tags.

Error Reduction
Because data is entered automatically, human errors are minimized, reducing logistics losses.

Management of High-Value Assets
Attaching RFID tags to expensive assets such as machines, printing equipment, laptops, and cameras enables real-time monitoring of their location, usage status, and maintenance history.

Loss Prevention
If an asset leaves a designated control area (e.g., office, factory), an alert is immediately triggered to prevent loss.

Automated Report Generation
Management software automatically generates reports based on asset movement and status, supporting decision-making for investment and management.

In-Store Inventory Management
In supermarkets or retail stores, bringing a UHF reader near shelves allows real-time comparison between physical inventory and system data, automatically detecting out-of-stock or soon-to-expire products.

Contactless Payment
Some stores attach RFID tags to products so that customers can complete payment just by passing through checkout—no barcode scanning needed.

Customer Behavior Analysis
By tagging displayed products, stores can track whether customers pick up or just look at items, helping optimize display strategies and promotions.

Tracking High-Value Medical Equipment
By tagging expensive medical devices such as ventilators or ultrasound machines, healthcare staff can instantly locate equipment and check its status and maintenance schedule.

Inventory Optimization
Real-time monitoring of equipment usage across the hospital improves asset utilization and reduces unnecessary purchases.

Patient Tracking
Attaching an RFID tag to a patient’s wristband allows for alerts in case of unauthorized movement or emergency situations within the hospital.

Staff Management
Staff wearing RFID tags can be tracked for shift and work hour management, enhancing hospital operations and emergency responsiveness.

Contactless Toll Collection (RFID e-tag)
When an RFID tag is attached to a car windshield, toll gate readers automatically recognize the vehicle and deduct fees, allowing seamless passage without stopping.

Smart Parking Management
By reading RFID tags at parking lot entrances, the system records entry time and monitors parking space availability in real time, optimizing space allocation and generating revenue reports. Alerts are sent automatically for vehicles that exceed the allotted parking time.

Integrating RFID with the IoT ecosystem allows for real-time data collection. For example, in smart factories, RFID tags on products or machines send data to IoT platforms to optimize manufacturing processes.

Next-generation RFID tags go beyond simple ID functions by incorporating sensors for temperature, humidity, pressure, etc. In medical cold chains, sensor tags monitor temperature and send alerts if pharmaceuticals or vaccines are improperly stored, preserving quality.

By applying AI and big data analytics to RFID data, businesses can improve demand forecasting, inventory optimization, and reduce waste and delivery times. Digital twin solutions recreate real-world operations using RFID data in virtual environments.

Researchers are working to make RFID chips smaller and reduce manufacturing costs using flexible printed materials. Energy harvesting technologies are also being developed, enabling semi-passive and active tags to function for long periods without batteries.

RFID is a leading solution in automatic identification and data collection, playing a central role in digital transformation and the advancement of Industry 4.0. Understanding how RFID works—its signal transmission principles, frequency types, and tag classifications—reveals its applicability across various industries.

RFID can reduce costs and improve operational efficiency in supply chain management, retail, healthcare, transportation, and agriculture. While challenges such as initial investment, signal interference, and security remain, integration with IoT, sensor-enabled tags, and smart supply chain systems promise even greater innovation.

Vietnamese businesses can strengthen their competitiveness, automate processes, and move toward a sustainable digital economy by adopting RFID technology at the right time.