The market for processed foods has undergone a significant transformation in the past decade, with a decisive shift towards premium, health-focussed products. This trend is particularly evident in the snack products space, where producers have experimented with innovative ingredients and have responded to customer demand for organic, natural and ethical ingredients. Such diversity in the market is great for curious consumers, but can also create significant headaches if producers are required to manage an ever-growing set of ingredients using manual inventory management techniques.
As your business’ ingredient lists continue to grow, automating aspects of stock management can increase efficiency and reduce workplace stress. Barcodes are an ideal way to manage inventory faster and better as they improve data entry, allow real-time inventory management and lead to fewer mistakes.
How do barcodes work in stock management?
A barcode is essentially a picture which uses a series of (typically) black stripes and white space to represent a string of numbers and letters. Barcodes simplify the process of reading stock numbers. Whereas stock numbers have to be read number by number, a barcode can be scanned quickly and can even be scanned upside down.
Most businesses deal with a range of unique identifiers. Different types of inventory might be assigned specific stock codes, while finished goods may sometimes be assigned a serial number. In the food manufacturing context, different batches of product may be assigned a ‘batch number’. For example, a snack producer may assign a batch number to all of the products produced by a certain team in a certain time. As an example, a batch number could correspond to all of the kale chip (product) produced by Anthony’s team (production line and staff) during the morning shift on a certain day (date and time). All of this information can be encoded within a barcode.
Barcodes are typically printed on product packaging, enabling factory and warehouse staff to learn more about a stock item on hand by scanning the barcode in question. When staff scan a barcode, inventory management software can match the barcode to a specific batch or inventory item within your business’ inventory database. Many businesses find that this simplicity reduces most of the stress and cost involved in stock management.
How barcodes make managing inventory easier for SME
The main driver of barcode adoption is the efficiency gains associated with automating stock management. In a growing business, having founders and staff waste time on data entry is counterproductive. Growing businesses should be prioritising activities that lead to new opportunities and should be automating administrative tasks as much as possible.
Barcodes also improve data entry within a business. Many staff, particularly stressed business owners, procrastinate entering routine data into inventory and accounting systems leaving a massive headache at key points such as reordering or tax time. With barcodes, staff are more likely to record the inventory they use and produce so your inventory records are likely to accurately record (using the earlier example) how much kale, salt and finished kale crisps you have in stock. Automating data entry also reduces error frequency, preventing you from recording sales of kale crisps against potato chips.
Finally, barcoding enables real-time stock management. This is particularly important for a small business that relies on an extensive grocery distribution network or which might even sell some products on consignment. Scanning barcodes at every stage of the production and sales process means there is never any doubt about where your inventory is.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.