The Definitive Guide to Barcode System for Inventory Management
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In the last few decades or so, inventory management has luckily evolved into a core warehousing process that can be, and usually is improved with the help of top-notch technology. As steadily move into the era of dark factories and warehouses (i.e. fully automated premises), technology becomes even more central to the refinement of inventory management procedures and if leveraged correctly, it can massively contribute towards the success of a business.
One such example of helpful solutions is barcode technology. A barcode system for inventory management can allow a business to have full inventory control and make such changes to their overall inventory management experience that it improves all other aspects of the business as well.
In this guide, we will take a deeper look at what barcode technology is and how a barcode system for inventory management can be the ultimate way to make sure your inventory management game is on track.
The first step of getting to understand the role of barcode systems for inventory is understanding what inventory management is in general. We tackle this in a lot more depth in our guide to inventory management, but let’s quickly go over it here as well.
At the most basic level, inventory management is the process of organising, handling and taking control of your stock as a business. It is a core component of any business strategy – you cannot expect to maximise your potential as a business unless you have inventory management fully under control.
Your stock, i.e. the inventory you have on your hands is very important. It is an uncapitalised asset, so you have to take extra care of it until it becomes capitalised. This means proper storage and shipment. However, it also means the right products, the right space, and also the right price.
The importance of inventory management is even further realised when you think of the fact that small businesses and large conglomerates are up against each other in the grand scheme of things. The only way to ensure that you, as a small business, are on the same level of operations is by ensuring that the foundation of your business, i.e. your inventory management tactics, are well-set.
Back in the day, inventory management simply meant keeping tabs on your product using spreadsheets and other documents. Even today, for a very small-scale business, something like this can be enough. However, when it comes to bigger businesses and businesses that hope on becoming big someday, spreadsheets and similar types of inventory management are simply not enough.
Therefore, it becomes important to look into other, more technologically advanced solutions when it comes to inventory management. Thanks to the technological revolution and a plethora of technological advancements in the world, there are many solutions that one can look into.
The best thing about such solutions is that they can be used to overcome many challenges that you face as a business. If you pick the ones that align well with your business then you can overcome many challenges, minimise hindrances in the fulfilment process, and ensure that your business is on the right track for customer satisfaction and retention.
Let’s have a look at some of these, including barcode technology, before we dive deeper into what a barcode system for inventory management is and how you can leverage it in your warehouse.
As a business, you must already know that your inventory is inherently connected to your warehouse. How well you control your stock is ultimately dependent on how well your warehouse is organised and optimised, which means that smart warehousing is an important component of the overall inventory management of your products.
This is where a warehouse management system comes in. A warehouse management system, also known as (WMS), comes in a variety of types and can really help you make the most out of your warehousing procedures. Not only does it streamline your fulfilment operations, it also makes sure that the overall supply chain remains seamless and the prospect of discrepancies is at minimum.
In fact, businesses of all sizes and nature can massively benefit from a WMS. This is because these systems vary in complexity, so you can easily get one that matches the level you operate on. For example, if you are a small business with a workforce that can’t really spare the time to learn the operations of a technical and complicated system, you can always research and find a software solution that is not too complicated for your team to learn and doesn’t slow up your processes.
Another type of technology that can be leveraged in your warehouse is RFID technology. It belongs to a group of technologies named Automatic Identification Data (AIDC). As the name suggests, it is all about integrating your processes with end-to-end automation, and making the identification of items a considerably more streamlined process.
RFID enables you to encode data in RFID tags and labels, which can then be used to scan and ultimately organise your stock. It utilises radio waves to capture, decode, and store data directly into computer systems. It consists of three main components: RFID tag, RFID reader, and an antenna. The tag contains an integrated circuit and the antenna, which transmit radio waves to the reader. The reader then converts the received waves into a more usable form of data. The whole process ultimately helps businesses improve many aspects of their operations, including but not limited to inventory management.
RFID is actually a lot similar to barcoding scanning but is often considered to be more beneficial as it can be read outside the line-of-sight, and is generally more convenient. Many businesses are aiming to more regularly make use of RFID technology as it requires little to no human intervention. Relying on RFID technology can actually lead to some very notable reductions in the overall costs of your operations. For more information on how RFID can help you improve your business procedures, have a look here.
In the world of warehousing and inventory management, you may not have heard of this particular technology as much as barcode scanning or RFID solutions. Yet, it still is a helpful solution for inventory control, and hence requires explanation.
LiFi technology and solutions are based on using light to transmit data and position wirelessly, between various devices. So, think of the LED lamp in your room. This lamp is used to transmit visible light, which helps you light up your room and make use of other items present in the space. This is exactly how LiFi technology works as well, but with one small difference; the visible light’s job is not to make you see things better, it is to transmit wireless connectivity so other equipment present in the warehouse such as robots and electronic devices can work properly.
We know what you’re thinking: why not just use WiFi? Good question. For everyday devices like smartphones, laptops, and tablets, using WiFi may be the feasible option. However, when you throw in heavy equipment used to run a warehouse into the mix, a simple WiFi connection just simply cannot take the load.
Quite a few businesses have realised that LiFi is a much better option than WiFi, which is why many operations have been optimised to make use of it. It is more reliable than WiFi, and works well for indoor connectivity. You can also make use of LiFi for 3D positioning for robots, drones, and other devices.
As you can tell, not all businesses will have to make use of LiFi technology, since it is more targeted towards warehouses that already have complex machinery like robots to deal with. Yet, if you find that WiFi is simply not working for you and you need a stronger, better solution, then LiFi is the answer.
And with that, we come to our next technology: robotics. Yes – we have finally reached that stage in the “future” where robots have become a topic of casual discussion. The thing is, robotics is one of the most sought-after technologies when it comes to warehouse and inventory control. Every business, big to small, should aspire to get to a stage where they can invest in robotics, because it can really help them improve the trajectory of their business.
Robots are put to use usually in environments that can simply not be handled by humans alone. So, think of businesses that have to fulfil millions of orders a day, and that too within a specific, strict time limit. Not only that, they have to make sure that these orders exhibit all the signs of top-notch quality control, because losing even a single customer is not an option. That’s where robots and robotic solutions can come in to save the day.
Robots can help businesses achieve personalised order packing, faster shipping, and more streamlined delivery as a whole in very less time. Interrogating robotic solutions into your warehouse means that you don’t have to worry about any of these things and can afford a growth in your orders.
As a business running in the 21st century, you probably already understand that your customers want everything to go their way. They are used to top-notch delivery and order experiences, and anything less than that is rarely acceptable. Continuing your business operations in such a competitive market means that you have to constantly think of ways you can make things easier for yourself and more likeable for your customers simultaneously. Using robots means that you can rely on technology to do the tedious, mechanical things like packing and use your human labour for other, better processes.
In comparison to the other kinds of technology we have discussed above, barcode scanning is actually the most simple and most used system for inventory management. And now, we can learn all about it.
If you take a moment to look around, you will notice that barcodes are everywhere. Open your wallet, and you will find them on your identification cards. Walk into a store, and you will find them on the back of each item you lay your finger on. Almost everything and anything is blessed with that small image of bars lined up together that we are so used to seeing.
The main purpose of barcode technology is to make it easier to identify things. At a technical level, barcodes are a sequence of vertical bars and space that represent either a number, or other symbols.
We will gain a comprehensive outlook on what it is and how it works in the following sections, as well as why businesses prefer barcode scanning over other types of inventory control. Yet, a good point to remember throughout the following discussion is that barcode technology makes inventory management a lot more efficient. A barcode system for inventory management means that not only are you streamlining the identification process, but you are saving money!
But we are getting ahead of ourselves – let’s approach this discussion section by section.
As mentioned earlier, we have all seen what a barcode looks like. It is a small group of vertical bars linked up together. Technically, these consist of five parts, namely: a quiet zone, a start character, data characters, a stop character, and another quiet zone. Essentially, this group forms a unique machine readable code.
A barcode scanner, using a laser beam, scans this group of symbols, and essentially translates the digital code into readable data. So, when a barcode is given to a product, it has its own unique identification which can be tapped into and recognised by the help of a scanner.
Essentially, barcode technology is based on a principle called symbology. Symbology is linked with the mapping and interpretation of encoded data, and that’s exactly what a barcode allows businesses to do. Every barcode is associated with a product, and the product is distinguished on the basis of the barcode.
As such, barcode technology is a layer of efficiency that is not only used in warehouses, but also POS systems, inventory management systems, shops, distribution centres, and whatnot!
When we think of barcode scanning, the first thing that is likely to come to mind is the supermarket. The tills at the supermarket are installed with barcodes, and for most of us, this is the closest interaction we’ve ever had with a barcode.
Although barcodes at work in a supermarket are a good example of their potential – after all, they considerably expedite the grocery-buying experience, this is not where the usage of barcodes ends. There are many businesses from many different industries that have barcode technology in place and it makes many work processes considerably simpler to execute.
The thing about barcodes is that they are a relatively simpler technology. You don’t need to take a course on rocket science to master barcode scanning, and it is definitely easier to implement in your everyday operations than RFID technology.
Bar codes have been around for ages, and for good reason. The primary way barcode technology helps businesses globally is boosting management efficiency. Companies no longer have to organise and go through inventory data by name, nor do they have to manually track inventory, making organisational processes much quicker.
This might not seem like a lot, but it is. A smarter and faster inventory management mechanism significantly saves company time and money.
With all the bases covered by management technologies in place, companies have to spend less time manually managing inventory, and less money hiring people to do it as well. Barcodes are one of the key components of smart inventory management mechanisms, this section dives a bit deeper into their benefits. Let’s begin.
Yes, we’ve raved about the boosts in efficiency seen in organisational processes such as inventory management with barcode technology. However, let’s discuss it with an example to give you a clearer picture.
Let’s take the example of a manufacturer or retailer that needs 50 cartons of their product shipped to one of their customers in another city. To check if the product is available in the specific quantity, the manufacturer would have to manually convey the product’s serial number to another employee at the storage facility, who would then have to either manually count the product or type in a serial number into some sort of database. Compare this multi-tier process to that of a barcode being scanned and pulling up the necessary data on product quantity and location.
The latter is much simpler and considerably reduces time. This simplification of a slightly complicated process not only saves money but is likely to boost employee productivity.
Since barcodes do not require manual input into a system, they are mostly free of human error.
Clerical errors and typos are common with inventory management and other organisational processes. The rate of errors in data entry is 1 in every 300 characters; they are extremely common and are understandable given the volume of work that needs to be done. However, even smaller errors can have considerable consequences, they require someone to go back and fix them, and if they’re left unnoticed, the results can be disastrous!
Not only could it cost your business significant time and money to fix larger clerical errors but it reflects poorly on your customer service as well. Your clients or customers could be dissuaded from employing your services if there’s a mix-up that costs them time and money to fix as well. Overall, not a good look for your company!
In some cases, the consequences of typographical or clerical errors can even pose danger for someone’s health and safety. Data entry and inventory management need to be 100% error-free in the case of blood banks, medical labs, or pharmacies. Managing prescription medications and blood donations and making sure they go to the right recipients is crucial in maintaining public health and safety. Inventory management such as this makes something as seemingly small as barcodes an integral component in reducing errors.
On the other hand, barcode technology takes human interaction mostly out of the picture. Everything is stored in the database and barcodes are scanned by computers, making your inventory management much smoother and error-free. The rate of errors in barcode technology is 1 in 36 trillion characters; to say that that is significantly less than manual data entry would be an understatement.
As mentioned easier, barcode inventory management gives you one-scan access to tracking how much quantity of a product is available. This is much quicker than manually locating and counting product inventory, especially in larger quantities.
Smaller products that are often ordered in bulk can be especially tricky to count and keep track of, think as small as lipsticks or tubes of moisturiser. Keeping track of their inventory can be taxing and logging quantity into a database can be tiresome and could cause potential errors in data entry.
Barcodes help you track your inventory and locate it with a few simple clicks, saving tons of time and risk of communication or clerical errors. They’re also extremely integral in tracking product expiration dates.
Barcodes are a low-cost solution to inventory management. After the initial installation you can immediately begin labelling products and using your barcode system. This is much cheaper than hiring someone to manually track and manage inventory. And even on its own, barcode inventory management has a relatively low-cost implementation; which is a win-win situation!
This section provides a more in-depth look into barcode technology and how barcode systems are used for inventory control and management. Barcode technology and barcode systems are composed of three primary components. Let’s discuss.
Barcoding hardware pertains to the devices and other pieces of hardware used in barcoding technology. These include:
If you are new to barcode scanning and inventory management in general, you must be wondering what a barcode scanner is. A barcode scanner or a barcode reader is simply an electronic device that is used to capture and decode the information found in barcodes. Thus, it is essentially the only way you can read barcode data and make sense of it.
There are different components to a barcode scanner, such as:
A light source
Needless to say, this illuminates the barcode so that the scanner can scan the code properly.
The actual scanning is carried out by a lens.
This component of a barcode scanner translates optical impulses into electrical impulses, which further enables it to read the codes.
The job of the decoder within a barcode scanner is to analyse the data and send the content to the scanner’s output port. This component of the scanner can either be external or internal.
A barcode generator, as the name suggests, is a program that generates a single or multiple barcodes at once. Usually, your inventory management system will come equipped with a barcode generator which will help you make a code. If not, there are many free online barcode generators as well that can help you get the job done, albeit on a smaller scale.
A good barcode generator should let you pick your own symbology, output format, and the size of the bars. It should also be easy to use, so that you can enter your information and generate downloadable barcodes.
Much like an ordinary printer, a barcode printer’s job is to print. However, this computer peripheral is almost entirely focused on the production of barcode labels. These labels can be pasted onto other objects, and as such helps us distinguish between them and identify them properly.
These printers either use direct thermal or thermal transfer techniques to print the label. Both these techniques are effective, but since labels created from direct thermal printers will become unreadable with exposure to unfavourable weather/temp conditions such as sunlight, heat, and chemicals – it is better to use thermal transfer printers for barcode printing because of the longevity of such products.
Under the term “barcode software,” there are many different types of software that can be discussed. For example; inventory management system software. Any inventory management software that helps you implement barcode technology, create and read barcodes can be considered barcode software.
Other examples of barcode software would include barcode generating solutions, as discussed above. These help you create your own barcodes. Usually. They are a part of your inventory or warehouse management software. However, they can also be used separately to only create labels in accordance with your preferences.
This kind of software can be found online, and there are many free options available for you if you are planning to save money on this process. Yet, you should keep in mind that inventory management is
The barcodes themselves are tricky to understand so we’ll do our best to simplify it. Simply put, a barcode is a picture that a computer translates into an alphanumeric string. This alphanumeric string reveals important information such as product ID, serial number, expiry, manufacturing details, etc.
In an inventory, stock keeping units (SKUs) all have their own unique barcodes to help operators identify them easily. For example, a case of soda cans will carry a different barcode to that of a bigger case. This differs according to the manufacturer’s organisational needs and preferences. Now let’s discuss how barcodes work and how they are read.
In order to properly integrate barcodes for inventory management, you need to first understand the different types of barcodes available. Then, have a look at the four simple steps we have listed below in order to get an idea of how you can incorporate barcode technology into your operations and use it to refine your processes
There are many different types of barcodes – however, it is not necessary for us to delve into the information on each one of them. Below, we discuss the 3 most common types of barcodes that are pertinent to our discussion of barcoding in inventory management.
A code 39 is one of the oldest barcode types. It is found in many different fields such as government, healthcare, and electronics. Technically speaking, a Code 39 barcode is an alphanumeric, 1D, and lineal code. It can not only extend to any length, but can also include the entire 128 ASCII character set. However, there is a limitation of size when it comes to this label, so if that is of concern then you should opt for Code 128
This code derives from the ASCII 128 character set, which means that just like Code 39, Code 128 can also contain any number from 0-9, any letter from A-Z, and also a few special characters. It is used very commonly in shipping and packaging because, thanks to an automatic shipping setting, it can very easily help users optimise the barcode length.
Interleaved 2 of 5
When it comes to warehouse, distribution, and manufacturing, Interleaved 2 of 5 barcodes are the most common forms of barcode. These are unique in the sense that they are numeric-only, and are used to encode pairs of numbers. The way it works is that every two digits are paired to create a symbol, and the number of digits must only be even since that’s what the format demands. If the number is not even, it must be added at the end of an odd set of numbers.
Generate your barcode using an in-built barcode generator or through the use of a separate software solution.
Then, select your scanner. The best barcode scanner/reader will be the one that not only fits your budget, but also the one that can effectively help you read lots of data in relatively lesser time.
Then, of course, you will need inventory management that can correspond with the scanner and not only read the data you provide through barcode scanning, but can also help you make sense of it and make reports out of it. The right inventory management system is very important because it helps you ensure that the barcode technology is being leveraged properly.
Ultimately, an inventory-wide labelling system will significantly improve inventory organisation and management. This will also help unify work processes through software and hardware integrations at every level. Barcode systems for your inventory management can therefore be game-changing for your business, boosting efficiency and streamlining work processes, giving you greater control and transparency when it comes to your inventory.
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Managing your inventory is tricky business with or without barcodes. There’s hundreds, if not thousands of products to go through, label and organise. It can be quite tiresome and can leave a lot of room for confusion and errors. Implementing a barcode organisation system for your inventory can be messy if not done right, and it can only further complicate matters instead of solving them.
Let’s talk about some of our best tips for using a barcode system for your inventory control and management. Once you’ve got the hang of it, you’re golden! Let’s start.
First and foremost, you need to identify how you’ll be using your barcode system for your inventory. Here are some ways you can integrate barcode asset labels into your inventory and what type of asset labels you’ll need.
Inventory get moved around a lot; from the manufacturer’s location to shipment centres to retail or distribution centres. While this is not always the case, if you’re dealing with inventory that does get transported to multiple locations, its best to have two-part or muli-part barcode labels. It’s also best two have backup assets in case of misplacement, with duplicate asset barcodes.
Barcode labels can also be used to ensure that your inventory is not tampered with while it gets stored or shipped to different locations. This is especially vital for valuable inventory assets.
For this, you’ll need tamper-evident barcode labels. Tamper evident labels are also integral for ensuring your food or other consumable products haven’t been tampered with. These labels block or provide as barriers to entry, ensuring that if the label or seal is broken, tampering has occurred.
These tamper-proof labels or mechanisms are additional to barcodes but are still an absolute must, especially for consumables.
Sometimes your items can have uneven surfaces that can make it difficult for ordinary labels to stick. Especially during transportation and shipping, you’ll need to ensure the barcode or tamper-evident labels do not fall off. It’s best to splurge and opt for highly adhesive labels that will adhere to the rugged surface of your items. Foil label barcodes work very well for this purpose.
Bigger assets go through a lot while being moved and even cleaned between shipping centres. Furniture and such can be tricky to label; asset labels need to be able to withstand the ordeal. Laminated or polyester asset labels work the best for this; they’re sturdier than regular labels and will survive the wear and tear!
Once you’ve got your needs figured out, you can pick what type of labels work best for the items you’re dealing with and move onto the next step. Speaking of moving on, here’s our next tip.
It’s integral for you to comply with industry standards when implementing a barcode system in your inventory management. Research and learn about the government regulations on barcodes in your area and set up your organisation system accordingly.
This is especially important when it comes to barcodes systems for inventory management for small businesses; you could avoid a potential lawsuit this way!
It’s incredibly essential for you to plan implementation out beforehand to iron out any possible kinks in the system in time. The first thing you’ll need to plan is what information you’ll be displaying on the barcode labels. So when your barcode is scanned, it’ll reveal particular information about the item it’s labelling.
This is typically the information revealed by barcodes;
Planning your barcode system implementation also relates to the location of the labels on your items. You need to find the perfect spot for the label to be placed or printed on, this spot needs to be easy to locate to the naked eye but also be safe from obstruction or damage.
For example, placing the label in a break or uneven part of your item is not sustainable for it. This is highly essential for your inventory control system even in the later stages, your barcodes need to be secure on your inventory for them to be of any use to your organisation. This is very important and requires some careful thought.
Lastly, software integrations are essential. In today’s increasingly “smart” world, it’s important to think of efficient workflows when it comes to inventory management and other business processes. Using software and tools to manage the ins and outs of your business data, team management, tracking and fulfilment will greatly come in handy on a day to day basis as well as long term.
Its advisable to put in a barcode inventory control system in place for your barcode management. Ideally, this software integrates with all your other software in place, streamlining the entire management process from start to finish.
Software integrations are highly effective in not only streamlining workflows but improving team productivity, which in turn boosts profit and output. It’s also helpful that asset management and inventory control tools save a ton of company time and money, so you can’t go wrong with giving them a go.
Use these tips when considering and implementing a barcode system for your inventory management. Whether you’re a small enterprise or a large corporation, barcode systems can make or break your inventory management, and they need to be put in place with careful forethought. A systematic approach is best for this!
Now that we’ve discussed some helpful tips on implementing a barcode system for inventory management for small businesses, let’s get into how you can pick the right system for you. Choosing the right barcode system for inventory control will be integral to how well you manage related operations.
Here’s some tips for going about this
The first step to making an executive decision is research. Thanks to the internet, information about every barcode inventory management system available is there for you to go through. Research on what software is likely to work best for you.
If you want to go even one step further in ensuring the best quality for your inventory management system, compile a list of narrowed down software that could work well for your needs.
The second step is to try out your software picks. Work in small trials and see which one fares the best for your inventory needs. While a software or tool can have all the right components, it’s essential to consider usability.
You or your employees that will be using the software need to get the hang of it perfectly to make the process error-free and minimise risk of confusion. This is why it’s advisable to try your hand at your picks before settling on one software.
As a general rule, there are some qualities and features to look for when looking at barcode inventory management systems. This also extends to picking scanners for your barcode scanning. These are some questions you should be asking when going through potential picks;
Can it create unique codes for your products and variants?
Ultimately, it boils down to your needs and preferences. Whatever software you choose, it has to be usable by you or whoever is handling it down to a T. This is to ensure that your inventory management solves the problems instead of causing them.
This brings us to the end of our ultimate guide on barcode systems for inventory management. To wrap this up, let’s dive into some key takeaways from what we’ve discussed.
Inventory control is the set of processes that aid in managing your business’ stock. This extends to any kind of product your business is selling or manufacturing to other businesses or end customers. Your inventory is a collection of uncapitalized assets, therefore, making it extra valuable. In case of misplacement or errors, your business bears all the loss. So, its integral to your business’ growth and success that you have your inventory control and management on lock.
There are a few systems you can have in place for your inventory management and inventory control.
Warehouse Management System (WMS)
Radio Frequency Identification (RFID) Technology
Light Fidelity (LiFi) Technology
Needless to say, inventory control and management has significantly evolved from the days of dark warehouses and manual inventory tracking. Workers no longer have to manually rifle through inventory to count quantities and organise data on heaps on spreadsheets and logbooks. While manual data keeping and tracking is easier on smaller scales, it can be extremely tricky and risky for larger operations. Data entry is made simple by computerising the processes, significantly eliminating typographical errors.
However, manual data entry still leaves considerable room for error; the rate is 1 in 36 characters! This means manually inputting serial numbers into a system can put your inventory organisation at risk for total chaos if done poorly. This is where barcode systems come in.
Barcodes are on nearly every mass manufactured product out there, from makeup to consumables to technological devices. This is because they have completely changed the game when it comes to inventory management as well as manufacturing verification.
Not only do barcodes help businesses stay in touch with and control inventory, they help customers identify the legitimacy of their products. Barcodes contain important information and in a database, they are used to determine quantities of assets in your inventory, among other functions.
Barcode technology for your inventory management can be game changing for your business. Some of its primary benefits include time reduction, boosted efficiency and productivity, cost reduction, and most importantly, error reduction. The rate of errors in barcode technology when it comes to data entry is 1 in 36 trillion characters, which is significantly less than manual data entry. Barcode technology streamlines inventory management, making it an efficient, error-free set of processes.
When going about picking the right barcode system for your business needs, it’s important to conduct thorough research and narrow down the best options. Your needs pertain to things like software integrations, scaling, manufacturing, as well as the types of labels that go onto your assets. It’s essential to plan every aspect of this out before implementing a system, to ensure maximum efficiency and productivity.
There are hundreds of barcode inventory management software and tools out there, picking the right one is a matter of trial and error. Ideally, your software of choice is easy to use for whoever operates it, maximising productivity and minimising errors.
Ultimately, barcode technology is an excellent idea for managing your business’ inventory, especially if you’re dealing with non-capitalized assets in bulk, it’s better to have organisational mechanisms in place that make your job easier!