RFID versus Barcode

Thomas Heijnen,
Sales and Marketing Management RFID Konsortium

Today, I would like to share an important question with you that we are asked almost before every project: “Do we now have to completely replace our barcode labeling with RFID labels?” The answer surprises customers when we say, “No. You don’t have to.” “RFID versus barcode” is not a battle where the stronger wins. Rather, it is about the sensible combination of both technologies, with cost aspects and the customer’s objectives at the forefront.

I recently visited a medium-sized supplier of robotics components. Like many others, the company uses barcodes as its standard labeling technology in its parts warehouse. Due to international competitive pressure, management is currently under pressure to make logistics processes more efficient, error-free, and economical. And as is the case almost everywhere, the aim is to cut costs and reduce errors. This means that all processes within the supply chain, from the supplier to the end product, are being scrutinized. National and international customers expect delivery commitments to be met and processed parts to be traceable. In addition, the company wants to digitally control the container cycles between its locations and also for delivery to customers in order to minimize material losses.

During our conversation, it quickly becomes clear that this is a goal that goes beyond the capabilities of barcode labeling alone, but does not necessarily require it to be completely replaced. The trick is to make efficient use of the best of both worlds. Cost-effective barcode labels and RFID transponders, including readers, are used in parallel as key digital technologies to achieve the goals that have been set.

During our meeting, the managing director tells me that all parts, semi-finished and finished components are now labeled with barcode labels. This is an inexpensive method of unique identification, but it also requires manual scanning, always with visual contact. Some labels may be difficult to read because they are dirty, damaged, or have visibility issues. In such cases, the barcode can no longer be read correctly, resulting in additional manual work.

RFID, on the other hand, is based on wireless radio wave communication and is suitable for simultaneously detecting multiple objects from a distance, without visual contact, and for automating numerous logistics processes.

Track & trace of parts or container management in circular processes is not possible with barcode technology. When it comes to ensuring process reliability, for example, to prevent errors in goods dispatch, RFID is the ideal technological addition.

The labeling does not have to be done at the item level—in some cases, this can be uneconomical. However, RFID transponders on load carriers, containers, or pallets can combine a group of items that can be tracked digitally at any time. Parts and components are linked to their barcode, e.g., via the RFID transponder on the container. This allows each item to be tracked on the shop floor and between individual locations. The container status (order active, available, in cleaning, etc.) is visible at all times and can be forwarded to higher-level systems. This transparency allows the end customer to be informed about the status of their order. A digital service for customer loyalty that is becoming increasingly popular.

As a rule, we recommend such hybrid solutions, i.e., a combination of both technologies, because they make sense for many customers from a cost-benefit perspective. This is also the case for the robotics supplier. Most of its parts are already delivered with barcode labeling. This is inexpensive and usually works flawlessly.

As the project definition shows, a large number of processes need to be mapped accurately, which means that RFID is the obvious choice for optimized replenishment control, seamless track & trace, storage processes, error-free goods receipt and goods issue, quality assurance, automated monitoring and maintenance, as well as real-time inventory accuracy and digital permanent inventory.
Circular processes, such as those prescribed by the Digital Product Pass, can also be implemented with RFID.

This comprehensive, improved process quality also triggered an “aha” moment during the consultation meeting with the aforementioned robotics component manufacturer. They definitely wanted to implement the invisible, contactless, automated recording, e.g., during shipping in seconds, without manual effort, where the process is fast, error-free, and reduces the workload on staff. With RFID gate technology, a proven technology at loading gates, this happens fully automatically. To demonstrate this, I show the managing director the application video in the Rent.Group distribution warehouse.

Let’s get specific. How do you combine barcodes and RFID? The first question is always: What does the customer want to achieve? We then examine which technology is best suited to achieving this goal. This is followed by a cost-benefit analysis. We examine the cost-benefit ratio for our customers: where is barcode labeling more economical and how can an RFID infrastructure help in terms of the objective? We evaluate the acquisition costs for RFID reading points and RFID transponders. It may be more economical to use hybrid mobile readers that can read both barcodes and RFID.

For quick labeling with RFID tags, we use our slap and chip method, which labels an object with an RFID tag in just a few seconds. This allows us to show customers the initial effects “live” while the project is still ongoing.

For automated data generation, we define interfaces for data transfer, e.g., to WMS, ERP, or other systems. We provide advice on scalability and maintenance. When it comes to RFID tags and readers, we are manufacturer-independent and advise our customers based on cost-benefit considerations.

Conclusion: Barcodes are classic and inexpensive. RFID provides inventory accuracy, authentication, serial numbers, lifecycle tracking, and much more. Both work wonderfully as a complementary duo.