The Merits Of Adopting RFID For Inventory Cycle Counts

The Merits Of Adopting RFID For Inventory Cycle Counts

Inventory cycle counts allow businesses to have accurate physical inventory but with some challenges. Learn how adopting RFID benefits & simplifies the process

Maintaining accurate inventory records and asset registers requires a robust inventory management strategy, such as inventory cycle counts. These counts entail conducting regular inventory audits at set intervals to detect discrepancies like inventory shrinkage and verify inventory accuracy, allowing inventory managers to ensure the integrity of stock levels and resolve potential issues immediately. Compared to conventional annual inventories, cycle counts are more accurate because of the accurate data at a company’s disposal and their quickness in identifying inventory variances that allow for real-time adjustments to inventory management practices.

The difficulties in inventory cycle counts

That said, doing inventory cycle counts efficiently and securely poses several challenges for businesses. Many inventory cycle count programs count inventory in small segments rather than take it all at once, as it takes more time and human resources to complete. Furthermore, manual cycle counts introduce the risk of inventory levels being off because of human error, leading to difficulties in accurate inventory tracking. Lastly, organisations need to maintain security during the cycle counting process to ensure that inventory does not go missing, being misplaced or stolen.

Understanding RFID and how it simplifies inventory cycle counts

RFID is a technology that consists of tags and readers at its most basic level, it can capture and record data in real-time. Some of its prominent applications include tracking the movement of assets, detecting environmental changes like humidity and temperature,  identifying behaviour patterns like asset utilisation or energy usage.

As the prerequisite for the Internet of Things (IoT), RFID enables companies to achieve real-time visibility into their inventory position without needing to manually count items on a regular basis, thus ensuring accurate stock counts free of human errors (which arise from manual interventions) as the technology provides granular information down to the lowest level. If RFID is integrated into an existing ERP system, organisations can simplify their automated cycle counts and expect significant benefits with accuracy across their operations.

Advantages of IoT-enabled RFID tags for inventory cycle counts

1. Faster counts

RFID can help hasten the counting process as readers can quickly and efficiently scan numerous tagged assets within a short period of time. Furthermore, the data collected can be relayed in real-time through the RFID asset tracking system, enabling swift completion of counts compared to those done manually by humans.

2. Lower costs

The traditional way of doing inventory via physical counts requires warehouse operations to rely on temporary employees to count things by hand, which can be incredibly costly and time consuming, especially for organisations with large inventories. On the other hand, RFID asset tracking can automate the inventory process and saves money in the long term.

3. Improved operational efficiency

Physical counts typically require halting operations temporarily to conduct accurate counts, this leads to a loss in productivity and revenue. In contrast, RFID can work alongside regular operations without causing any disruptions, which maintains productivity and increases efficiency.

4. Greater accuracy

As mentioned, manual counts and other traditional inventory methods are prone to human error with a higher risk of inaccurate counts. This is not the case with automated counts using RFID inventory management which is capable of accurate, real-time data that is precise down to the decimal level, providing businesses with everything they need to prevent stockouts and over stocking.

5. More informed decision making

Data collected by the RFID system can be leveraged for analytics to gain insights and trends into the business’s inventory levels that can improve decision-making processes regarding production, stocking, and many other aspects of the organisation’s operations. 


An effective RFID system can help to save costs and boost operational efficiency. Leveraging modern tools like RFID and IoT is critical to stay afloat in today’s highly competitive market landscape, where inefficiencies and errors can make a difference in achieving commercial success. By adopting the technology in one’s inventory management system along with its other applicable use cases, businesses can stay abreast of the competition and even achieve growth in a sustainable manner.