RFID is not new, but the role it plays within the enterprise is evolving. As supply chains become increasingly distributed, automated and exposed to external risks, executives are placing more value on technologies that provide reliable, real-time visibility into physical assets and inventory. RFID has gradually become one of these enabling layers, not because the technology itself has changed dramatically, but because the decisions that come with it have changed.
Although RFID is a relatively old technology, industry analysts predict its use in the supply chain will continue to grow. To understand why RFID is a powerful technology, it helps to understand where businesses are using it. Organizations use it for inventory management, merchandise and asset tracking, returnable asset tracking, merchandise authentication, and cross-docking.
An RFID system is composed of a transponder, which is the RFID tag; a scanning antenna and receiver, which are usually assembled to create a reader; and the network that stores the data and sends it wherever it is needed. RFID tags have various applications in the supply chain.
Over the past decade, the cost of RFID tags has decreased as their accuracy has increased, leading to a positive ROI for companies investing in the technology, said Abdil Tunca, senior principal analyst in the logistics and customer satisfaction team at Gartner.
As many organizations continue to deploy RFID to solve specific operational problems, its value increasingly extends beyond day-to-day execution. As companies invest in AI-driven forecasting, automation, and resilience planning, RFID data is becoming a critical component in broader decision-making, determining how executives assess risk, allocate capital, and respond to disruptions in complex, multi-partner supply chains.
Where RFID creates impact at the decision-making level
1. Inventory management
RFID tags enable real-time visibility into specific items in facilities, giving organizations a clearer, more current view of inventory positions as conditions change.
RFID tags also allow workers to access this data without having to go to another section of a warehouse to find the item.
Inventory management is one of the most common use cases for RFID in the supply chain, Tunca said.
Possess insight into item locations can help supply chain managers also achieve better planning of operations.
Amber Schwiesow, vice president of purchasing and supply chain at a telecommunications company and board member of the Association for Supply Chain Management, said her company uses RFID tags to verify which high-value assets are in which facilities at any given time. Data helps ensure employees have access to the right items when they need them to complete their work orders.
2. Goods tracking
RFID tags are also useful to track goods over long distances.
Organizations can use RFID tags to track individual containers filled with goods as they are transported across oceans or across long stretches of land, Tunca said. Supply chain managers could also decide to track each item if the value of those items is high enough to justify the cost of that many RFID tags.
RFID tags can provide managers with greater confidence in inventory locations and transfer points, especially when goods are moving through third-party partners.
Supply chain managers can use RFID tags to better understand the location of products when they are handled by third parties, such as customs brokers and third-party logistics carriers, said Jonathan Colehower, general manager of global operations and supply chain at UST, a digital transformation software provider based in Aliso Viejo, California.
3. Asset Tracking
RFID tags can provide insight into not only the location of warehouse equipment, but also its usage history and upcoming maintenance needs.
When RFID is combined with analytics and other IoT technologies, it can store and transmit data about where and how equipment is used, Tunca said. The data can reveal information, such as whether a forklift needs upcoming maintenance.
The data can also provide insight into how warehouse workers are using equipment so their supervisors can make corrections if necessary, he said. For example, data may reveal that workers use a forklift for a certain task while a more energy-efficient pallet jack does the job better.
This information can support both cost control and business operations. sustainability efforts reducing unnecessary equipment usage and improving asset utilization.
4. Tracking consigned assets
RFID tags can provide information to the location of items that are supposed to be returned to their company.
Some supply chain managers use RFID systems to track reusable assets, such as totes, containers and pallets, which are often shipped with inventory to other destinations with the hope — and agreement — that recipients will return them, Tunca said.
“In a warehouse environment, a lot of the time these items are not returned when they should be,” he said.
RFID can help organizations reduce losses from misplaced or unreturned assets – costs that often remain hidden without consistent tracking.
5. Authentication of goods
RFID tags can help verify the authenticity of products.
Similar approaches are also gaining traction in other regulated and high-risk industries where provenance, compliance and brand protection intersect.
When a person scans an RFID tag for a product, the tag can confirm that an item comes from a certain manufacturer and indicate its point of origin.
This use of RFID technology is more common in the pharmaceutical industry, Tunca said.
6. Cross-docking operations
RFID tags can potentially be useful during the process called transshipmentin which goods received at one dock are immediately shipped to waiting vehicles at another loading dock, bypassing the warehouse.
Cross-docking has grown in popularity as supply chains have become more complex.
The process can be difficult, especially at scale, but knowing where products are located through RFID tags can help reduce misrouting and delays that quickly translate into greater operational disruptions.
The value of RFID in the modern supply chain is no longer defined by the tags themselves, but by the visibility and accountability they enable. As supply chains become increasingly automated, data-driven, and exposed to external disruption, technologies that connect physical assets to business decision-making are gaining strategic importance. For management teams, the challenge is not whether RFID has a place in the supply chain, but rather how its data is governed, integrated and used to support faster, more secure decisions across the enterprise.
Editor’s note: This article was updated in January 2026 to improve the reader experience.
Mary K. Pratt is an award-winning freelance journalist focused on enterprise IT and cybersecurity management.