What is the role of RFID chips in logistics? What is the role of RFID chips in logistics? Solution Radio-frequency identification (RFID) uses electromagnetic fields to automatically identify and track tags attached to objects. The tags contain electronically stored information. Passive tags collect energy from a nearby RFID reader\'s interrogating radio waves. Active tags have a local power source such as a battery and may operate at hundreds of meters from the RFID reader. Unlike a barcode, the tag need not be within the line of sight of the reader, so it may be embedded in the tracked object. RFID is one method for Automatic Identification and Data Capture (AIDC).[1] The emergence of RFID (Radio Frequency Identification) technology has been greatly increased efficiency in the production process management, material flow management, logistics and transport, retail and distribution and other fields of the national economy industries, including electronic information industry. RFID may eventually replace the ubiquitous bar code in the future and become the main technology in logistics and supply chain management field RFID in Logistics Management Logistics management involves the efficient control of some or all of the supply chain functions, including: – Product research and development – Sourcing and purchasing – Manufacturing – Production planning – Sales, marketing, and forecasting – Inventory management – Cross-docking and flow-through – Customer service – Transportation – Freight payment – Information reporting Using RFID logistics tracking has helped many organizations solve the main challenge at every node in their supply chains: the lack of visibility of logistics data. RFID technology is a powerful solution that improves asset visibility, data quality, inventory management, and interoperability in an end-to-end integrated supply chain. In fact, the U.S. Department of Defense (DoD) issued a mandate in 2005 that requires all of their suppliers to use RFID in marking any items that are sold to the DoD. The need for this mandate arose from decades of logistical challenges faced by the military with regard to the supply chain. RFID has proven to alleviate various logistical problems associated with the DoD supply chain. RFID technology, in combination with the Internet, allows the DoD to disseminate accurate, real-time data to commanders worldwide so that assets can be easily located and used according to the Department’s highest priorities..