What is a barcode inventory system?

A barcode inventory system combines hardware and software to account for quantifiable inventory using barcodes to categorize and identify items.

Both hardware and software systems can automate inventory management. An inventory control system can account for anything from clothing to food, if it can be quantified and labeled. Barcodes were initially meant to automate grocery checkouts, but the technology expanded to serve as inventory management.

Graphic showing the capabilities of a barcode inventory system.

Automated tools, known as an inventory control system, are a combination of software and hardware tools that can help with the process of tracking inventory. Any quantifiable goods, such as books, clothing, food, and other types of equipment, can be tracked with an inventory control system using barcode technology. Barcodes are capable of encoding alphabetic and numeric systems to help with tracking inventory—the systems work in real-time in conjunction with technology to send information to a centralized computer system that tracks the inventory and transactions.

Essentially any business with hardware, physical, and technological assets to track will depend on inventory systems. Barcode inventory systems are commonly used in grocery stores to track produce, meats, and individually packaged products. Warehouses also typically use barcodes to track inventory and its movement from location to location. Retail stores track inventory, which is especially crucial considering the wide variety of items carried retail, both out front and in the back of the store. Barcode inventory systems are also crucial with shipping companies, as items are constantly on the move and need to be accounted for.

Barcode inventory systems are essential to ensure that businesses control the quality of their products when their transactions revolve around customer goods. A retailer who doesn’t have proper inventory control could run out of a product before it can be replaced—barcode inventory systems help with the anticipation of a low product stock before it can completely run out. An automated system can also alert the retailer when there are low stock levels.

Human error can also be an issue with inventory, especially as the size of the inventory grows. If a retailer orders 10,000 shirts but 5,000 are missing, it may not be immediately apparent. An inventory management system can quickly identify the missing merchandise, which can accelerate the recovery process as the missing shirts are tracked down.

Retail has a risk of theft at all times. Tracking theft can help with the strategy of security measures to prevent theft. Once the measures are in place, a company can track the progress of the security measures to see if they are effective.

An automated system usually involves using a barcode scanner to scan a barcode on an item. The barcode encodes information into a visual pattern of black and whote spaces. When read by a barcode scanner, the information about the item is collected and sent to a centralized computer system that automatically tracks the item and the relevant information associated with it. This helps take inventory of items for distribution, storage, or shipping by accounting for the item and what needs to be done with it.

All of the types of gathered data work together to create an automated, real-time tracker, which simplifies processes, reduces errors, and analyzes information.

The right barcode scanner hardware can make a big difference in inventory tracking. Some hardware and software can work together better than others, so it’s important to consider the right combination of the two and how they can ease the barcode inventory tracking system. There are two different types of barcode hardware: 1D and 2D. And even though barcodes may seem simple and uniform, the differences between these two hardware types is significant.

1D barcodes

One-dimensional barcodes are the type of barcodes that most people picture when discussing barcodes. They are composed of flat, vertical lines that stretch out horizontally across a space. The space between the lines allow barcode scanners to properly identify the specific product contained within the barcode. They are often used for tracking packages, mail, and retail items.

Types of one-dimensional barcodes include:

  • UPC-E
  • EAN-13
  • Code 39
  • EAN 128
  • USPS IMB
  • UPC-A
  • RSS-14
  • Code 93
  • Interleaved 2 of 5

2D Barcodes

The second dimension provides more depth than the first dimension, and barcodes are no exception. Two-dimensional barcodes are not read as simple binaries the way that the vertical lines are—they are typically shaped as a square with many pixelated points and geometric shapes that contain the codified data, rather than just numbers and lines.

They can be smaller than one-dimensional barcodes while still offering a great deal of information about the product. A common type of two-dimensional barcode is a quick-response code, or QR code, which may take somebody to a website or provide detailed information about where a package has been, and where it is going.

Examples of two-dimensional barcodes are:

  • MaxiCode
  • Aztec
  • PDF 417
  • QR Code
  • Data Matrix

Businesses of all sizes need barcode tracking systems, but these systems may be especially important as a business grows and deals with more software. Barcode systems can help track inventory that is moving from location to location, beginning with asset receiving and moving, to deployment and disposal of assets.

Automated barcode systems are much easier than keeping track of inventory, shipping, and storage by hand. It also reduces the likelihood of error, which is much more common when done manually. Barcodes can keep an ongoing record of inventory, purchases, and shortages.

Businesses use inventory systems to anticipate when a product might be running low, and whether it needs to be replaced or mitigated. These systems also make it easier to track retail theft along the chain, informing security measures to ensure that products are not stolen—the measures can also be tracked for effectiveness using the automated system to see if the amount of theft has been reduced.

Mobile barcode scanning can provide more versatile and connected options for a company. Cloud-based systems minimize hardware costs because companies don’t need to invest in individual handheld scanners—scanning can be performed from mobile devices like smartphones. Employees can work on the go and connect together from a centralized cloud-based location that keeps each location in sync.

Choosing the right barcode inventory system is crucial to success. Take special care to research and choose the barcode system that works best for your business.

How to start

Your first step in establishing a working barcode inventory system is to create a product code using either a Universal Product Code (UPC), a stock keeping unit (SKU), or a United Nations Standard Products and Services Code® (UNSPSC).

Getting a UPC is as simple as registering the product with Global Standard 1 to be assigned a unique company code, which can help with the tracking of products all over the world. A UPC helps prevent theft, allows customers to find information about a product online, and assists in inventory management.

SKU numbers can be manually created or used in an inventory management software system. SKUs are often unique to a company, and are mainly used in internal operations to keep track of stock, track purchases, and monitor inventory.

After the barcode has been created, it’s as easy as printing the barcode using a simple inkjet printer and a label sheet, but thermal printers are recommended for printing the labels—thermal printers have a lower cost than laser printers, they’re easier to maintain, and they tend to last longer, which are all important points to consider if you’re going to be printing potentially thousands of barcodes.

Picking a scanner

The right scanner can make a world of difference. Luckily, there are different options available for different needs.

Wireless scanners require batteries to function, but they are great for mobility; businesses can track inventory in real-time without having to lug along a power cord. Wireless scanners can send information directly to an inventory management system, or the information may be collected on a memory chip that is later inserted into a computer. Some mobile scanners also store information on the device itself, which may be periodically uploaded to the main database. Mobile scanners can also involve scanning software using mobile applications on a smartphone, which may be a less-expensive option than a traditional scanner.

Wired scanners are typically more cost-effective options than wireless scanners, but without the mobility and flexibility. They can be great when checking out customer purchases at a register, where the need for mobility isn’t as prevalent.

Choosing a barcode software

Take the time to explore the different options while considering cost and needs. Some software can scale excellently, but that doesn’t mean that a smaller business would need something quite as expansive.

As such, it’s important to take into consideration the needs of your business, the capabilities, benefits, and challenges of available barcode inventory systems, then create a budget. Refine your search to those systems that fit your cost demands but still provide the best-possible service.

Barcode inventory systems are extremely valuable to businesses of all sizes, and ServiceNow is ready to cater to individual needs with our hardware asset management systems.

Features of Hardware Asset Management

ServiceNow’s hardware asset management can simplify processes and ease roadblocks along the way. Features include hardware normalization, asset lifecycle automation, a hardware asset dashboard, and a mobile asset inventory audit.

ServiceNow also provides advanced mobile scanning solutions; using mobile-based apps, your device’s camera becomes a reliable scanner capable of scanning multiple barcodes sequentially without leaving the scanning interface, and can even scan groups of barcodes at once, grouping them into relevant sets. The ServiceNow Agent mobile app makes it easy to coordinate inventory specialists, track location, update records, and more, and even functions without an internet connection.

Simply put, ServiceNow mobile scanning puts the power of inventory management in the palm of your hand.

Learn more about our Hardware Asset Management.

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