RFID belongs in a Microsoft Dynamics 365 Business Central warehouse when you receive pallets that arrive already tagged, count inventory in open space, or track large assets across a yard. It does not belong in dense piece picking, around metal or liquid, or anywhere a worker needs to confirm the exact item in hand. Barcodes still win those jobs, and the two work well together.
This article explains why, in enough depth that you can make the call for your own operation instead of taking a vendor’s word for it.
How does passive RFID actually work?
A passive RFID tag has no battery. It is a small microchip bonded to a thin metal antenna and sealed inside a paper label. When a reader sends out a radio signal, the tag’s antenna captures a small fraction of that energy, converts it to enough current to wake the chip, broadcasts the chip’s data, and goes dormant again. Think of it as a solar panel that harvests radio waves instead of light.
That single fact explains most of RFID’s strengths and most of its failures. The tag answers whenever enough energy reaches it, whether or not anyone is pointing at it. That is what makes bulk reads possible, and it is also what makes stray reads inevitable.
Serial numbers vs EPC data
Every tag carries a factory-burned serial number that is unique in the world. On its own, that number is like an unassigned license plate: unique, but meaningless until someone maps it to a specific item in the ERP. Building and maintaining that cross-reference is an administrative chore.
The more useful tier is EPC data, the Electronic Product Code defined in the GS1 EPC Tag Data Standard. An EPC-encoded tag carries the equivalent of the product’s GS1 identifier plus attributes such as lot number, expiration date, or weight. When the reader wakes it, the tag announces its complete identity, and the ERP needs no lookup table.
Encoding your own EPC tags is not the same as printing a shipping label. It requires RFID-capable printers, specific thermal label stock, and staff who can troubleshoot a misaligned encoding head. The best case for any warehouse is a supplier who ships product already tagged with full EPC data. If your vendors do not, the encoding burden is yours, and it should be counted as part of the cost of integration.
What does an RFID reader deployment involve?
There are two hardware paths, and they differ far more in scope than in price.
Mobile readers are handheld devices or sleds that hold a smartphone. A worker uses one much like a barcode scanner: walk up, hold the trigger, sweep the area. They need no facility changes and suit receiving and inventory counting well.
Fixed readers are antenna portals mounted at choke points such as dock doors or the passage between receiving and storage. A forklift drives through, and the portal registers everything on the pallet with no trigger pull. That is the frictionless data capture RFID is sold on, and it is real. It is also never one project. A fixed portal is three:
- Construction. Heavy equipment bolted to industrial walls, dedicated power, and steel conduit to protect cabling from forklift strikes.
- Networking. Each reader securely connected to your internal systems.
- Middleware. A portal reading a hundred tags may capture each of them many times per second. Business Central cannot consume raw radio pings. Something has to deduplicate them, work out direction of travel, and hand the ERP a clean statement such as “these 100 items moved from receiving to zone A.”
The middleware layer is where fixed-reader projects most often stall, because nobody budgeted for it. If you are evaluating fixed portals, ask who owns that layer before you ask what the antennas cost.
Where does RFID earn its place?
RFID’s defining advantage is the bulk read. Hold a trigger for a couple of seconds and register dozens of items at once, with no line of sight, including tags sealed inside cartons in the middle of a shrink-wrapped pallet. As long as the radio energy reaches the tag, it answers.
That advantage pays off in a specific set of jobs:
- Bulk receiving of pre-tagged product. A uniform pallet from a supplier who encodes EPC data can be received in seconds rather than carton by carton.
- Inventory counts in open storage. Sweeping a reader through a bay is faster than scanning each label, provided the products themselves do not block the signal (more on that below).
- Asset tracking in spacious layouts. Locating cable spools or equipment spread across an outdoor yard, where items sit far enough apart that every read is unambiguous.
- Loss prevention at exits. A tagged carton passing a dock portal without a matching shipment can trip an alert immediately.
Notice what these have in common: items that are either physically separated or meant to be read as a group. RFID is at its best when “everything in range” is exactly what you want to know.
Where does RFID fail?
The same physics that enables the bulk read causes three failure modes. None of them can be fixed with better software.
Stray reads in piece picking
Depending on reader power and tag antenna size, a handheld can pick up tags from several meters away. In the Inside Insights episode on this topic, the hosts put that range at 20 to 30 feet. In a narrow picking aisle, that means the scanner may confirm the bottle you need while actually reading a tag two aisles over. There is no laser dot on a label, so there is no physical proof that the item in your hand is the item the system recorded.
The obvious fix is to turn the reader power down. It works, and it destroys the business case. Once the read range drops to a few feet, the worker has to walk up to every item anyway. You are now scanning at barcode speed with hardware and consumables that cost far more.
Metal reflects the signal
Radio energy does not cooperate with density. Metal acts as a chaotic reflector, bouncing the signal unpredictably and creating dead zones where waves cancel each other out. A tightly bundled pallet of pipe is the classic example: the reader energizes the tags on the outside of the bundle and never reaches the ones in the center.
Liquid absorbs it
Water absorbs radio frequency energy at the molecular level, the same principle a microwave oven uses. A pallet of eggs, beverages, or anything else that is mostly water swallows the signal before it reaches the inner tags. The outer cartons read and the pallet count comes up short, every time.
If your product mix is heavy in metal or liquid, or if most of your labor is spent picking individual units from crowded shelving, RFID will underperform no matter how well the integration is built.
How do modern barcode processes close the gap?
The usual argument for RFID is speed. Barcode workflows have evolved to answer that argument while keeping the one thing RFID cannot offer: physical verification of the item being scanned.
| Barcode technique | What it does | Where it matches RFID |
|---|---|---|
| Pallet labels with long-range scanners | One label encodes item, lot, and expiry for a uniform pallet. Long-range imagers read it from across a dock. | Distance reads, with certainty about the target. |
| License plating | Each item is scanned onto a pallet as it is built, and one master barcode (the license plate) stands for the whole mixed load. | One scan per pallet on every subsequent move, plus error rejection at build time. |
| Rapid sequential scanning | The operator holds the trigger and sweeps a wall of cartons. The device stores reads locally and forwards the batch. | Dozens of items in roughly the time of an RFID bulk read, with no stray tags. |
| Camera-based batch scanning | An imager photographs the pallet face and decodes every visible barcode in one frame. | Bulk capture without radio hardware or interference. |
License plating deserves a closer look because it solves the mixed-pallet problem RFID is often bought for. When a worker scans the wrong item onto a plate, the system rejects it on the spot rather than three days later when the customer opens the box. Insight Works publishes an app for this workflow; the License Plating app page describes how mixed items are tracked across containers with a single license plate number.
Should you integrate RFID with Business Central? A decision checklist
Work through these in order. The first “no” is usually the answer.
- Do your suppliers ship product already encoded with EPC data? If not, you own the encoding printers, label stock, and training. Factor that in before anything else.
- Is the job a bulk read or a targeted read? Receiving a uniform pallet, counting a bay, or locating assets is bulk. Picking one unit for one order is targeted, and RFID is the wrong tool for it.
- What is the product made of? Significant metal or liquid content in the load means inner tags will not read reliably.
- How dense is the storage? Items in open space read cleanly. Items packed on shelving in narrow aisles produce stray reads.
- Mobile or fixed readers? Mobile readers deploy quickly and need no construction. Fixed portals require construction, networking, and middleware, and someone must own all three.
- Where is the bottleneck today? A slow receiving dock and a picking accuracy problem call for different technologies. Diagnose first, then select.
A useful summary from the podcast episode: never lead with the technology. Do not buy an RFID system and then walk the floor looking for a problem it solves.
How does Warehouse Insight handle RFID and barcodes together?
The practical answer for most Business Central warehouses is not RFID or barcodes. It is RFID at the dock and barcodes in the aisles, on the same devices and in the same app.
Warehouse Insight supports RFID alongside 1D and 2D barcode scanning, and the RFID scanning page for Business Central describes how the RFID side works. Workers hold down a trigger on an RFID-capable Android device, built in or via an attached sled, and the reader captures every tagged item in range. Tags encoded with GS1 data are resolved through the GS1 barcode rules already configured in Business Central, so no separate item mapping is needed. Tags without GS1 data are matched through a one-time cross-reference. Reads are deduplicated automatically, so a tag captured several times counts once.
RFID is available in three Warehouse Insight workflows: receiving against purchase orders, inventory counting, and shipping. Serial number capture during receiving or counting is configurable. The same page is candid about the physical limits covered above: performance depends on tag placement, reader range, and product density, and palletized shipments read better than densely staged mixed orders.
That candor is the point. The right design uses RFID where physics favours it and barcodes where certainty matters, without forcing either technology to do a job it was not built for. Microsoft’s own warehouse management overview for Business Central describes the receiving, put-away, pick, and shipping activities these scans feed into.
Frequently asked questions
Does RFID replace barcodes in a warehouse?
No. RFID suits bulk reads of pre-tagged, well-spaced product. Barcodes suit targeted reads where the worker must confirm the exact item. Most operations that use RFID successfully use both.
Why does my RFID reader miss items in the middle of a pallet?
Metal reflects the radio signal and liquid absorbs it. Either one prevents enough energy from reaching tags at the center of a dense load. Restacking or reorienting the load can help; changing the software cannot.
Can I reduce stray reads by lowering reader power?
Yes, but doing so removes the range advantage that justified RFID. At short range you are scanning at barcode speed with more expensive equipment.
Do I need fixed reader portals to use RFID with Business Central?
No. Warehouse Insight’s RFID support runs on RFID-capable Android handhelds or sleds. Fixed portals add construction, networking, and middleware work and are a separate decision.
What is EPC data and why does it matter?
EPC is the GS1 Electronic Product Code. A tag encoded with EPC data identifies the product and its attributes directly, so the system does not need a cross-reference table. Tags with only a factory serial number do.
What is the best first step if we are considering RFID?
Identify the specific bottleneck, then check the product mix and storage density against the failure modes above. If the job is bulk receiving of supplier-tagged pallets, RFID is a strong fit. If it is piece picking, start with barcode process improvements instead.