RFID tags (transponders) are small, film-like smart labels embedded with silicon chips.  Stock items of all sizes, such as products, boxes, and pallets can be attached with RFID tags.  As they travel through the supply chain network, they can easily be tracked throughout the wireless network environment of the RFID system.

Any distribution centres and retail stores around the world can act as a check-point to locate the item and synchronize the information to the global central database.  Since every tag ID is unique, the Logistic Management Information System is able to monitor each individual item with great accuracy.  Such advantage results in a significant improvement to the operational security and the shipment punctuality to the whole supply chain system.

The following diagram illustrates how the product data in the RFID tag is read from antenna and then finally becomes useful information in the I.T. system for further analysis.