Radio frequency identification (RFID) technology can be applied at several levels, and it ensures improved communication and efficiency. It can be used to identify, follow, and spot known objects or people and can be utilized in catalog management, asset tracking, security and loss prevention, preservation, rental equipment, and operations.

RFID technology does not necessitate reading line-of-sight access. An RFID tag can activate security alarm systems, if removed from its proper location, and it is not orientation-sensitive. Also, it can hold more information than merely a unique product code, and, hence, each item can be independently labeled or tagged. Furthermore, RFID tag data is all-inclusive, distinctive or common in parts, and is compatible with data processing. With right technology, a plurality of tags can be read at the same time. An RFID tag has two types - read-only and read-write. Each RFID tag is distinct, and hence, these tags can act as a security feature if lost or stolen.

RFID technology has a very sophisticated level of data integrity in the form of character check sum encoding, and it provides an excellent security and product authentication. An RFID tag is more difficult to counterfeit than a barcode. Not only this, the supporting data infrastructure can facilitate data recovery and product tracking anywhere. RFID technology has the ability to monitor shelf life, which is especially advantageous in the pharmaceutical and food industries.

RFID is a robust technology and can be used in hostile surroundings. It has provisions for regular upgrading, for example, as a car goes through its life, its service record can be logged with the car by electronic means. A day-to-day example in which this technology can be useful is implanting it into a suit so that when it is sent to cleaners, it automatically finds the right cleaning method to be applied. There exists a program, called the RFID pilot program, which provides a low-risk approach for determining possible necessities, process changes, prices, profits, impact, and hazards of implementing RFID in a real-world customer environment.