Barcoding Inventory: How to Implement the Barcode System

Answered October 01 2019

In the time it takes your average person to manually type a couple letters or numbers, you can scan a single barcode containing numerous characters at once. That means barcoding your inventory will make inventory management much quicker and easier.

Image of a barcode being built out. Barcoding Inventory: How to Implement a Barcode System for Inventory

Do you need a barcode inventory system?

Implementing a barcode system takes time, however, so how do you tell whether you need one? If any of the following are true, you’ll most likely benefit from using barcodes.

1. You warehouse your inventory

Keeping track of thousands of inventory items in a warehouse can be difficult if you don’t have an easy-to-use system to keep an eye on item counts, details, and so forth. A barcode system is a must if you warehouse your own inventory.

2. Your vendors/retailers require barcodes

If your inventory gets sent to vendors or retailers, they might require barcodes for the items they purchase from you.

3. You’re maintaining Barcoding Inventory

Not all inventory is meant to be sent off to vendors or stores. Some items kept for maintenance, repairs, and operations (MRO) are kept exclusively in-house. That said, your MRO inventory management will be much easier and more precise if you use barcodes to track everything. That way, you don’t risk suddenly running out of a spare part you need.

What are the different barcode types and standards?

Barcode types can be categorized into three main groups: numeric, alpha-numeric, and two-dimensional. The first two types are considered one-dimensional and include only numbers or a combination of letters and numbers as well as bars of varying widths. The last type is most commonly seen as a QR code: a square or rectangular shape showing a combination of short lines and dots.

According to Barcoding.com, there are more than 100 different symbologies for barcodes.

Numeric

About one dozen symbologies exist within the numeric-only barcode category. The most popular is the UPC code, which is commonly found on many retail items and contains information such as the manufacturer and product identity. EAN codes are usually used at point-of-sale.

Industrial, interleaved, standard, and Code 11 barcodes are more popular within business and industry. They are often used in airline scanning, warehouse applications, telecommunications, and industrial settings.

POSTNET is a numeric system used by the U.S. postal service, and Codabar is used by FedEx and blood banks.

Alpha-Numeric

Fewer alpha-numeric codes exist with the primary one known as the Plessey code, which is used for grocery store shelf labelling and library coding.

The remainder of the symbologies within this category all originate from Code 39, which was the first alpha-numeric code created to be used in non-retail industries. LOGMARS, Code 93, and Code 128 are all used in defence and automotive industries.

Two-Dimensional

This final category of barcodes became popular with the rising use of smartphones. These 2D barcodes allow the creator to encode more than 7,000 characters in one barcode.

When a 2D reader on a phone sees a barcode, it can transmit secure, encrypted data easily to the user.

Other two-dimensional codes include data matrix codes used in electronic and logistics, PDF417 codes used in transportation and inventory management, and Aztec used in travel industries.

What is a 2D Barcode?

A 2D barcode is a set of small geometric shapes organized within a square or rectangle to store information. Since they can store information in both the vertical and horizontal planes, they provide hundreds of times the amount of data than a 1D barcode can store. One 2D barcode can store more than 7,000 characters and may include information such as brand name, model number, maintenance records, and wealth of other details.

Types of 2D Barcodes

Three types of 2D barcodes are most common today. One 2D barcode can store more than 7,000 characters and may include information such as brand name, model number, maintenance records, and wealth of other details.

QR Codes

QR codes, also known as quick response codes, may be the most popular 2D barcode. Originally used in Japan to track automobile parts, the QR codes can be scanned by smartphones and link users directly to web sites.

The most popular two-dimensional code is the QR code, which is used on just about everything today.

Data Matrix Codes

Data matrix codes must be read with imagers or readers that essentially take a picture of the code to analyze it. They are often used in industrial applications

PDF417 codes

PDF417 codes contain a great deal of information securely and affordably by essentially stacking rows of codes within one another.

How 2D Barcodes Are Used

Although you may be most familiar with QR codes that are found nearly everywhere in today’s world to encourage you to visit particular websites, many 2D codes are used within business and industry to help store and track information about assets.

These barcodes are faster to use and reduce errors significantly. If a person must manually enter codes, you may experience an error for every 1,000 keystrokes while 2D barcode scanners may make a mistake once every 10,000 scans.

2D Barcodes in Maintenance

Data can be easily transferred between a reader and a CMMS, providing an easy way to study particular assets, maintenance records, or repair requests. 2D barcodes can play a vital role in helping a company make smarter business decisions. In addition, 2D barcodes can store enough information for a remote employee, such as a maintenance technician, to access the data required to perform a particular maintenance task or repair quickly and efficiently.

Set up your barcode system for inventory in 6 steps

Once you’ve decided that you need a barcode system, it’s time to get started actually implementing it. These steps should help you get your system set up in a way that will work best with your inventory.

1. Define all SKUs and variants

Start off by making a list of all items in your inventory. You can do this by keying each SKU number and variants into a database. With each unit, you might want to include some or all of the following information:

  • Item measurements
  • Purchase cost
  • Vendor information
  • The minimum amount you need in your inventory
  • Physical description of the item

This information can make organizing your inventory easier, especially if you have a wide range of similar items.

Tip: Inputting all this information into a spreadsheet is highly recommended. That way, you can easily sort items without having to deal with reams of paper.

2. Choose a barcoding inventory software system

Once you have a complete catalogue of your existing inventory, you’ll want to choose a software system to create your barcodes. Some popular barcoding software systems include:

  • Finale Inventory
  • Fishbowl
  • QuickBooks
  • Clear Spider
  • Square

Some CMMS’s can be used to create barcodes for items as well, so if you’re working on barcoding your MRO inventory, that option may be worth looking at. Ultimately, the system you choose should match your company’s scale and requirements.

3. Define your barcodes for Barcoding Inventory

With a software system ready, it’s time to determine the types of barcodes you’ll want to use. Some of the most common types of barcodes are:

  • Numeric, which are often used in retail, warehousing, and industrial settings
  • Alpha-numeric, which are used anywhere from grocery shelves to automotive factories to the military
  • Two-dimensional, which include QR codes capable of containing over 7,000 characters in one code

The code you choose will ultimately depend on how much information you want to code into the item. A numeric UPC code may be sufficient for smaller inventories where you only need to track product and manufacturer information, whereas a QR code might be better for tracking vast numbers of different items.

4. Create the barcodes for Barcoding Inventory

When you have a barcode type you like, use your software to create the codes for each item. Most software systems make this fairly straightforward. Typically, you’ll select the type of code you want and use the software to automatically generate a code for each item.

If you plan to use your barcodes for warehousing, you’ll want codes for shelves as well to allow you to track inventory placement.

5. Update your inventory management system with new barcodes

If you’re using a CMMS or inventory management system that’s separate from your barcode creation software, you’ll want to make sure that system is updated with the new barcodes. Doing so will make inventory management much more streamlined.

Tip: If you used a CMMS to create barcodes for your MRO inventory, this step isn’t really necessary. Your system should already have that information stored with each item.

6. Put Barcoding Inventory on your place

Last of all, print the barcodes and place them on each item. Often, this is as simple as printing the tag and sticking it on, but you might need to take extra measures or use special materials with certain items.

For instance, rugged items with uneven surfaces may require foil barcode tags, whereas items used in cleaning might need lamination over the code to protect it.

Your barcodes are on. Here’s what you can do with them!

Now that you have a whole barcode system in place, what do you do with it? Your system will help you with many aspects of inventory and supply chain management, such as those described below.

Inventory tracking

First off, you’ll be able to track your inventory wherever it goes, whether you’re sending it across the nation, or simply moving it around in your warehouse. Ideally, each time an item moves to a different location, it gets scanned, meaning it’s less likely to get lost. If something does come up missing, it’s easier to track it down.

Tip: In order to keep a close eye on item movements with your barcode system, you will need to have a system in place to support it. Training employees to scan items in or out is a must, and it’s simple to do.

Optimize inventory management

Barcodes make it easier to optimize your inventory management, including the placement of items within a warehouse. By tracking the types of items you have in stock and where they’re placed, you’re able to make decisions about warehouse layout that make logistical sense.

Stock auditing for Barcoding System

Another component of inventory management is stock tracking. Barcoding inventory is much quicker and easier than manually entering numbers into a computer, and it tends to be far more accurate as well. Because of this, you’ll have a much easier time with stock auditing with barcodes than you would otherwise.

How should I choose a barcode scanner?

Choose a barcode scanner by thinking about what you will use it for, how often you’ll need it, and what kind of technology must be integrated with it. Barcode scanning technology has improved a lot in recent years, resulting in a vast number of options to consider. Here are a couple of tips to help you sort through them.

Selecting a Scan Engine

The first consideration in choosing a scanner is what kind of scan engine you want. This should be determined by what you will be using the scanner for. Most barcode scanners use laser technology, which is both a cost-effective and common choice. Laser scan engines can only read one-dimensional barcodes from close distances unless you invest in an extended-range model.

While laser scan engines use light to read a barcode, linear imager scan engines actually capture a picture of the barcode. This engine then can read the information on a one-dimensional barcode from the image. Linear imaging technology has dropped in price and is now comparable to laser scanners while doing a better job of reading damaged barcodes. Both laser and linear imager scan engines require a horizontal positioning of the scanner to the barcode for an accurate read.

The most advanced scan engine is a 2D area imager, which takes a picture of any barcode for analysis. This scan engine can capture the image in any direction, takes a more detailed picture, and is both faster and more accurate. Many 2D area-imaging engines are also able to read barcodes off a computer or mobile device screen.

Choosing a Form

Think about how often and where you’ll be using your scanner in order to select the right form. The most common form is the handheld gun-style, which is available as a cordless model or with a stand. Presentation and in-counter scanners are stationary and rely on the user to move items with barcodes in front of them to scan. These types are similar to ones found in grocery or clothing stores.

For companies using barcode scanners to manage inventory and tracking information, a mobile computer form may work best. In this case, the scanner and computer work in a single unit and transmit the information through a WiFi connection. Fixed-mount scanners are also used in industrial applications. They are usually mounted on a kiosk or conveyor line and are always operating.

To look at how scanners compare side-by-side, study an online buying guide for even more details.

How UpKeep makes inventory management easy

Upkeep provides numerous features that make inventory management simple, including:

  • Barcode generation and scanning through mobile devices
  • Automatic updates to MRO inventory stock counts as work orders are completed
  • The ability to create purchase orders
  • Importing inventory lists from a .csv file

Key Takeaways

In the end, a Barcoding system takes a bit of work to implement, but the benefits it can have for your inventory management processes are significant. Certain software solutions also make it much easier to implement, saving you time and expense.

Asset Management Questions & Answers