In the field of Textile and Clothing, Radio Frequency Identification (RFID), which is one of the most promising technological innovations, is used in manufacturing, inventory control, warehousing, distribution, logistics, automatic object tracking and supply chain management. RFID technology can improve the potential benefits of supply chain management through reduction of inventory losses, increase of the efficiency, increase in the speed of processes and improvement of information accuracy. Although the technology existed for several years, the technological challenges and cost issues are the major hurdles for the widespread use of RFID. In this paper, the authors have addressed the key challenges faced by RFID, disadvantages and future directions of the technology.