May 29, 2017      3 min read

Barcodes can streamline the inventory management process speeding up data entry, supporting traceability and enabling real-time inventory control. At their most basic, barcodes are a unique way to identify different products. If your business uses barcodes for inventory management, it helps to understand how barcodes work and how they are commonly used in inventory management.

What is a barcode?

Essentially, a barcode is a picture that translates to an alphanumeric string. The idea is reasonably simple – each item should have a unique identifying string, which is then printed as a barcode and can be scanned. Each stock-keeping unit (SKU) will have its own barcode, so, for example, a 6-pack of beer will use a different barcode than a larger case.

Although it would be possible to print product numbers on inventory instead of barcodes, the downside with numbers is that they can be slower to read and easier to confuse, for example, the numbers ‘6’ and ‘9’. Barcodes, on the other hand, can be read very rapidly while maintaining near perfect accuracy.

How do barcodes represent numbers?

In a standard ‘one dimensional’ barcode, each digit (or character) in the string is given the same amount of horizontal space in the barcode (7 ‘units’ relative to the size of the barcode). To represent each digit from zero to nine, each unit of the barcode is coloured in with a representative pattern of black and white stripes. The number ‘8’, for example, translates to one white space, two black spaces, one white space and, finally, four black spaces.

How do 2D barcodes work?

Two dimensional (2D) barcodes work a little differently. These barcodes look like squares or rectangles that contain many small, individual dots. The most widely recognised 2D barcode, the QR code, consists of black squares arranged in a square grid on a white background. An image is taken of the QR code (commonly by a smartphone camera) and is then processed using an error correction algorithm. Data contained in the QR code is then extracted from patterns that are displayed horizontally and vertically within the image.

Because they encode data vertically as well as horizontally, 2D barcodes can hold a wider variety of inventory information. In addition to SKU numbers, a 2D barcode could be used to encode expiry dates, batch numbers or traceability information.

How do barcodes integrate with inventory management software?

A barcode is not useful by itself, but instead only once the products are labelled with the barcodes and they can be scanned. The scanner shines LED or laser light onto the barcode, which is then reflected back into a sensor in the scanner. The sensor is able to discern between black and white spaces in the barcode as each reflects a different amount of light.

Whether the scanner used is handheld, pen-style or an embedded scanner (such as the kind found in self checkout terminals), scanning the barcode will produce the identifying string, which is then matched to a record in the inventory management or point of sale system.

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