The system of the present invention includes a large-zone RFID reader, a plurality of small-zone RFID readers, and a plurality of RFID tags. The large-zone RFID reader covers areas which are not covered by the small-zone RFID readers. The output power of the small-zone RFID readers is controlled by the large-zone RFID reader based on RFID tag operation patterns of the small-zone RFID readers. The system reliability is improved by a method that uses reliable RFID tags, RFID reader beacon signals, and RFID tag's repetitive transmitting signals to detect tag failures. The system security is provided by a method that uses integrated crypto engines in both the RFID tags and RFID readers.