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A barcode inventory system allows businesses to keep track of their inventory more quickly and efficiently. A barcode is scanned with a mobile device and instantaneously linked with inventory management software when a product has one. While managing inventory by hand or using spreadsheets is conceivable, these approaches are inefficient and prone to human mistakes.
As a result, many businesses use barcoding to keep track of their inventory. Coming up, we'll go through barcoding in detail, including how this system works and how your company can use it to improve inventory management.
A barcode is basically a one-of-a-kind symbol containing numbers or text, similar to what you might find on grocery merchandise, Which visually represents data. When a barcode is read, the product's data is immediately sent to a computer. Barcodes are classified into two types:
One-dimensional barcodes, which are typically found on consumer goods, are the most prevalent type of barcode. The pattern of vertical black lines on a white backdrop distinguishes 1D barcode labels from 2D barcode labels. The barcode scanner can read the product data because of the space between the lines. For businesses with a huge number of stock-keeping items (SKUs), 1D barcodes are essential because they increase inventory accuracy and minimize the need for manual inventory management.
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Two-dimensional barcodes use squares, dots, and other shapes to encode data. Due to their elaborate shapes, these barcodes may contain more data than 1D barcodes, like website information, audio and images. One of the most common instances of 2D barcodes is a QR code, which can be scanned with a smartphone to access a website.
Barcode inventory systems streamline and automate the inventory management process by using barcodes to encode key product information, which is then scanned and tracked. The process starts with creating unique barcodes for each SKU, which store data like product IDs or batch numbers. These barcodes are printed and placed on each item or container, making it easy for staff to scan them at various stages, such as when receiving, picking, or shipping goods.
When scanned, the barcode data is instantly transferred to an inventory management system, updating stock levels and tracking item movement in real time. This immediate data capture minimizes human errors and removes the need for manual input. The centralized system then provides managers with live inventory visibility, enabling timely reordering, trend analysis, and efficient stock control. In general, barcode systems increase accuracy and reduce workload, allowing businesses to monitor inventory effectively and enhance overall supply chain efficiency.
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Here are four major benefits that a barcoding system can provide for your company:
Although barcode technology is beneficial and cost-effective, there are a few disadvantages to be aware of before moving forward:
Implementing a barcode system for inventory involves multiple stages, each of which is essential to ensure seamless inventory tracking, accuracy, and improved efficiency. Here's a detailed step-by-step guide:
Start by organizing and categorizing your inventory into specific SKUs. SKUs serve as unique identifiers for each type of product, helping you track stock levels, reorder items, and analyze sales trends efficiently. Define SKUs based on product attributes such as brand, size, color, and model. A logical and consistent SKU structure makes barcode assignment straightforward and allows quick product retrieval in the system.
Once your SKUs are defined, select a barcode inventory system that matches your operational needs. Look for a system that integrates with your existing inventory management and POS (Point of Sale) software, if applicable. Key features to consider include real-time tracking, automatic reorder alerts, reporting tools, and compatibility with mobile devices or handheld scanners. Ensure the system is scalable to accommodate future growth in inventory volume or complexity.
There are two main types of barcodes: 1D (linear) and 2D. Linear barcodes, such as UPCs and EANs, store limited information, usually just a unique identifier. They are suitable for small to medium-sized operations with simpler inventory needs. 2D barcodes, such as QR codes, can store more data, including product details, lot numbers, and expiry dates, making them ideal for complex inventories. Select the type that aligns with your inventory tracking requirements and desired data capacity.
After choosing the barcode type, use barcode generation software or an inventory management system to create unique barcodes for each SKU. The barcode will encode SKU data in a machine-readable format, allowing for quick and accurate scanning. You may need to adjust the barcode size and format based on product packaging to ensure optimal readability by scanners.
Print the generated barcodes and apply them to products or packaging in a consistent, easily visible location. Ensure the labels are durable enough to withstand potential wear from storage, handling, and environmental conditions. This step is crucial for creating a uniform system where items can be quickly identified and tracked throughout the supply chain.
Employee training is vital for the barcode system’s success. Teach your team to handle scanners correctly, interpret inventory data, and understand why each scan is important. Training should emphasize the need to scan items at every stage—receiving, storing, picking, and shipping—to maintain accuracy in the database. Comprehensive training also helps avoid issues like missing or duplicated scans that could disrupt inventory accuracy.
Before launching, conduct a trial to test the barcode system in a controlled environment. This helps identify any issues with barcode readability, scanner functionality, or data integration. Testing ensures that the system is well-calibrated and that employees feel confident with the process. After addressing any detected issues, you can roll out the system fully across your operations, confident that it will operate smoothly.
The key to properly using inventory barcodes is to plan ahead of time. You don't want a system that requires regular retooling. To establish a barcode system that satisfies your current requirements while also exceeding your expectations as your inventory management needs grow, follow the steps below.
SKU barcodes are useful for inventory control, but they will also be present on the products you sell. If you sell to other companies, the barcode that you employ must follow industry standards or usage guidelines. The following are examples of industry-specific barcodes:
The size that you require — Data Matrix barcodes can be used on little things, but Code 39 barcodes should be bigger to be read effectively — as well as the amount of data it stores, will influence your barcode selection. Two-dimensional barcodes like QR codes and other two-dimensional barcodes can contain more information than one-dimensional UPC barcodes.
Define your inventory barcode functions since "inventory" refers to a huge range of assets, including products you've created, items you purchased to resell, and products you obtained to use. The following are the different types of inventory functions:
The proper labeling of stocks by the function will improve your accounting procedures. Cost of goods sold (COGS) calculations are aided by tracing raw materials to final items, and depreciation estimates are aided by tracking permanent physical inventory - autos, office furniture, software, and hardware.
Following that, choose what data you would like to store/keep in your barcodes. Which barcode to choose is determined by the amount of data you want to encode as well as any industry requirements. You won't normally include the retail price because it can change, and when the item is scanned during a transaction, the most recent pricing will be applied by your POS system. Below is some useful information:
A one-dimensional barcode can only contain 100 characters, whereas Up to 1,500 characters can be stored in a two-dimensional Data Matrix barcode. The more data that a two-dimensional barcode holds, the more complicated its pattern. Use 800 characters or lower to enhance scanning accuracy and speed.
If you generate SKU barcodes with your POS system, keeping track of stock shouldn't be an issue. To get the most out of your investment, ensure your barcode software is compatible with your accounting software or your POS if you use more complex barcodes (ROI). Barcode scanners are available in a variety of sizes, forms, and prices. A handheld one-dimensional scanner can be had for less than $25, whereas a flatbed barcode scanner would set you back more than $1,000.
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Scanning settings, such as illumination, air quality, and barcodes used, all have an impact on your decision. The following are the three most common barcode scanners:
Barcode scanners for tablets and smartphones are available for free download. While these are acceptable for a fast barcode lookup, they should not be used mainly in business situations.
For data accuracy, you must adopt consistent inventory techniques. When it comes to inventory control, the computer science dictum "garbage in, garbage out" (GIGO) should be avoided. The following are some of the top barcode inventory practices:
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EFEX offers a comprehensive range of fulfillment services that integrate advanced barcode inventory management to streamline operations, enhance accuracy, and drive business efficiency. Our barcode solutions are designed to meet the needs of businesses looking to optimize inventory tracking, improve order fulfillment, and reduce errors across their supply chain.
With EFEX, businesses can rely on real-time inventory tracking that is fully integrated with your existing systems, ensuring up-to-date and accurate stock levels at all times. Our barcode technology enables businesses to scan products quickly and easily, reducing manual entry errors and enhancing the overall speed and accuracy of inventory management. This means fewer stock discrepancies, faster order fulfillment, and greater customer satisfaction.
Whether you are managing a single warehouse or a network of multiple locations, EFEX customizes its barcode inventory solutions to fit your unique operational needs. Our systems are scalable, allowing for seamless expansion as your business grows. You can add new products, expand to new locations, or adjust workflows without disrupting your existing operations. This flexibility ensures that you can continue to meet customer demands efficiently, even as your business evolves.
In addition to advanced technology, EFEX places a strong emphasis on customer support. Our expert team works closely with you to ensure smooth implementation, offering guidance from the initial setup phase to ongoing training and troubleshooting. We are committed to helping you optimize your barcode inventory management system for long-term success.
If you have numerous warehouses with thousands of products, you may want to scan SKUs for each retail transaction to maintain store inventory control. With EFEX, you completely can gain access to a barcode inventory solution that improves accuracy, reduces costs, and enhances operational efficiency. With our tailored approach and commitment to customer success, we provide a reliable solution to keep your business on track for sustained growth.
If you have numerous warehouses with thousands of products, you may want to scan SKUs for each retail transaction to maintain store inventory control. In either case, careful preparation ahead of time will help you get the most out of your barcode inventory. As you can see, installing a barcode inventory system appears more complicated yet is a simple process. The effort required to transition from taking stock by hand to a barcode inventory system will be well worth it in the long run, promisingly bringing many benefits for your business!
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