June 3, 2017      3 min read

Barcodes are perhaps the most straightforward method of tracking inventory; they are easy to implement, and make it possible to track virtually every inventory movement – through the warehouse and right up to the point of sale. However, barcodes are just one way of tracking inventory – let’s compare barcodes with some of the alternatives.


The barcode is the most common inventory tracking method. Barcodes are cheap and incredibly simple – an image representing a serial number or product name can be printed onto an existing product label. They are also easy to scan, whether you use a portable handheld scanner or an embedded scanning system at a checkout. For a small-scale business, the simplicity of barcode tracking is hard to beat.

Radio Frequency Identification Tags

Inventory tracking using radio frequency identification (RFID) tags involves applying an individual tag to each item of inventory. Each tag has the ability to broadcast a weak signal, using a small antenna. RFID systems fall broadly into two categories – passive RFID and active RFID.

Passive RFID tags do not have an independent power source. Rather, they are powered by electromagnetic fields created in the presence of an RFID reader. Passive RFID systems are less expensive and typically last longer than active RFID tags, as there is no battery to run down. Active RFID tags, on the other hand, use a battery to continuously broadcast a signal, so they are useful for tracking movement constantly in real-time. They are typically much more powerful and have a longer range, so are useful when customers (and, unfortunately, staff) may attempt to bypass passive RFID scanners.

There are numerous differences between RFID technology (whether active or passive) and barcodes. Barcodes are typically scanned one at a time by a staff member, whereas a large number of RFID tags (such as an entire inward delivery of tagged goods) can be read passively at any given time. RFID tags can store a much larger amount of information (including batch numbers, traceability information, bills of materials or other data) and can be written to as well as read from allowing some inventory data to be stored on the tag as well as in the inventory management system.

Tracking inventory manually

If you are less concerned with real-time visibility, a manual tag based system may be an inexpensive, low technology alternative to barcodes and RFID tags. Inventory is tagged as it moves from the warehouse to the shop floor. Tags are then removed at the point of sale, providing a rudimentary sales count. Alternatively, sales records in a POS system or stock book could be used in a similar way, albeit without the need for initial tagging. The downside of this approach is that it is difficult to track inventory throughout the business and all but impossible to access accurate inventory information in real-time.


Kanban (literally “sign” in Japanese) is used in the inventory context to refer to a system where a sign at the end of a bin or shelf triggers an action, such as moving to another shelf or reordering from a supplier. This is not an inventory tracking system in the true sense, as although it is a simple alternative to automated reordering, it does not allow a business to track an item of stock throughout the warehouse.

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