Do you want to upgrade your inventory management but can’t decide between barcode or RFID inventory systems? You’ve come to the right place.

If you need to track multiple data sources on a single object or across multiple facilities, you’re covered. Inventory management systems are getting better by the day. And with a projected market revenue of $3 billion by 2028, the demand for such technologies will only increase.

Should you invest in an RFID inventory system, or is a barcode inventory system for your needs? Which will improve your inventory management efficiency and how?

In this guide, we answer all such questions and more to help you figure out these major inventory system technologies.

Let’s start with some basic terms.

RFID Technology and Inventory System

RFID, or radio frequency identification, uses radio waves for object identification and tracking. RFID inventory system refers to the use of RFID technology and tools for inventory management.

Typically, an RFID inventory system involves RFID tags, RFID readers, an antenna, and RFID management software. RFID tags have built-in data chips that store information and also be tracked or scanned with the help of the antenna and RFID reader.

RFID tags come in active, hybrid or passive forms—active and hybrid tags have their own power source, while passive ones do not. This makes a substantial difference in the tracking and identification range of the tags.

Pros and Cons of RFID Inventory System

Pros

• Durable
• Can be read or tracked even when out of sight
• Can be read or tracked from a distance
• Can scan and track multiple items at once
• Unique identity for each item
• Stores a lot of information

Cons

• Relatively pricey
• Requires specialized reading equipment
• Potential difficulty integrating with existing tracking systems

Barcode Technology and Inventory System

Barcode technology refers to the use of machine-readable tags with black and white stripes for the identification and tracking of objects. In a barcode inventory system, the same technology is used for carrying out inventory management tasks.

A barcode inventory system involves barcodes, a barcode reader, and inventory management software. Barcodes can store data and be read by scanners.

Barcodes come in a variety of forms, but all of them must be visible for the reader to identify or track them. And because the barcode can only be read when it’s within line of sight of the scanner, this system cannot be used to track objects across significant distances.

Pros and Cons of Barcode Inventory System

Pros

• Affordable
• Easy to implement
• No special equipment is necessary

Cons

• Can only be read or tracked when in line of sight
• Only scans one item at a time
• Risk of damage
• Limited storage capacity

Things to Consider When Choosing Between Barcode and RFID Inventory System

Independently, barcode and RFID inventory systems are excellent solutions for asset tracking and management. But you can’t substitute one for the other because they’re very different in their feature offerings and applications.

Not sure what you need?

Here is a side-by-side comparison of the features of RFID inventory systems and barcode inventory systems to help with your decision-making.

Cost

The upfront costs of integrating RFID inventory systems can be quite expensive. A complete setup of the system and all tools can range from $5,000 to $10,000. It is certainly not ideal for a small business with a small inventory.

Barcode inventory systems, in comparison, are relatively cheaper to set up. They typically cost up to $1,000. This makes them an attractive inventory management solution for businesses of all types and sizes.

Then again, RFID provides significantly more operational benefits in the long run, such as reduced manual labor and improved efficiency. It is certainly a worthy investment.

Durability and Versatility

RFID tags are the clear winner in terms of durability—they can take quite a beating during asset handling. Because barcodes are simply stickers, they’re more likely to be damaged, which can render them unreadable.

However, you can attach barcode stickers on various surfaces, which allows for flexible placement on all kinds of assets.

Type of Assets

Considering the cost, barcodes are a better choice for tracking small assets with a short lifespan. Barcodes are also ideal for assets that are static and stored in the vicinity.

An RFID system is a suitable choice for high-value assets that need to be tracked in real time. Especially so if the assets move around often and across great distances.

Operational Environment

Does your asset’s operational environment have varying temperatures and humid conditions? You’re probably better off with RFID inventory systems.

Barcode stickers aren’t durable enough for extreme environments.

Readability

Reading and tracking items using RFID asset tracking systems is much simpler than doing the same using barcodes.

For starters, barcodes need to be visible and within a few inches of the reading device. In the case of RFID inventory systems, the tags can even be read or tracked from a significant distance as they move between facilities or within various warehouses.

Storage

RFID tags allow you to store a lot more information in comparison to barcodes. Expiration dates, batch numbers, supplier name—RFID tags can store all kinds of information.

In contrast, barcodes will, at best, store the product identifier and a few other details.

Ease of Setup

Creating barcodes for unlabeled inventory is relatively simple compared to creating RFID tags.

With barcodes, all you need to do is create and print the barcode labels using the inventory system and a printer. In an RFID inventory system, you must also decide on inlay type(s) to use, additional data to put in the tags, RFID scanner(s) to deploy and the software system for tracking and identification processes.

For RFID tags, you may go with pre-programmed RFID tags or have in-house RFID printers for maximal flexibility around your RFID tag schema.

In addition, RFID systems will also require you to know how to attach the tags correctly. Depending on your RFID setup, you may need to set up RF antennas that will facilitate the reading and tracking of all your tags.

Compatibility

RFID systems need special reading equipment to read and track the tags. Setting up an RFID inventory system requires many mandatory purchases that can add up. Whereas barcodes can be scanned using just about any kind of reader and even your smartphone or tablet. Some inventory management software might also come equipped with automatic sync for barcodes.

What’s more?

Barcodes are quite ubiquitous, so integrating them into an existing inventory system is quite easy. This is not the case with RFID tags, which need to be created and then assigned to items.

Speed

Overall, barcode and RFID inventory systems are much faster than traditional pen-and-paper inventory methods.

However, barcode systems require you to scan each item for an inventory count. With an RFID system, you can just use the reader to look at multiple tags at once, completing your inventory count within seconds while improving inventory accuracy by as much as 25%.

Barcode vs. RFID Inventory System: Applications and Uses

RFID Inventory System

RFID inventory systems have a variety of applications: you can track inventory, assets, and even people. They’re most commonly seen in warehousing and distribution sites where RFID tags track and locate individual pallets and shipments with a large number of items.

And because they can store a lot of information, RFID tag technology is also leveraged in industries where asset quality control takes priority. It is also used in events, hotels, and resorts where seamless access control and cashless transactions give visitors a personalized experience.

Another industry that has seen a massive adoption of RFID technology is manufacturing. This is because it relies heavily on many parts running optimally. RFID tags help ensure optimum operations by improving visibility across the supply chain.

Barcode Inventory System

Barcodes are used by companies on a tight budget to track limited inventory. Upfront hardware costs can be reduced by scanning with cameras instead of dedicated scanners. You’ll commonly find barcode inventory systems in industries like healthcare and retail.

In retail, goods generally move very quickly from the warehouse to the sales floor. Barcodes can easily match this pace. They are also very easy to implement, so items can be put up for sale soon after they are delivered by the supplier.

Barcodes can be used to track product information throughout inventory management, pricing, and checkout. And there’s not much information to store, so the process is quick and easy.

In the supply chain, barcodes are great for pick-and-pack processes involving individual products.

In healthcare, barcodes offer the same reliability in tracking medications, medical equipment, patient files, and other critical assets for operations. It also helps that the goods are all within a limited area.

Easy Barcode System Integration With Nest Egg

Inventory management is a considerable undertaking regardless of the size of your operations. In most cases, picking the right barcode or RFID inventory system is only the first step in the process. We hope this guide has helped you choose which inventory system best suits your needs.

If you’re still unsure, Nest Egg can provide much-needed assistance.

Whether you’re managing a small inventory or looking to scale to thousands of assets, our barcode and QR code inventory management tool integrates easily with your existing systems. It also syncs seamlessly and securely across multiple devices, so your operations are never down.

Get in touch today to try our world-class support!