All you need to know before implementing a barcode inventory management system

January 13, 2021
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Everyone has encountered a barcode getting scanned when we buy something at a shop or online. But we might not realize the important role in inventory management that tiny barcode is playing.
Inventory management is an absolutely crucial aspect of a retail/ecommerce business. Large or small, almost every business has inventory to manage – and in the case of retailers with inventory stocked in warehouses, the significance of efficient inventory management can hardly be overstated.

While it is possible to track inventory by manual count and spreadsheets, this is simply not good enough for an ecommerce or retail business. Modern retailer need a perpetual inventory count system where management is always aware of inventory levels in real time.

For an ecommerce business, managing inventory through bar-coding is therefore one of the most important capabilities to acquire. Barcode scanning reduces human error, helps save time, increase operational efficiency, thus allowing ecommerce businesses to achieve higher productivity and ultimately – profitability.

How Does a Barcode Inventory System Work?

A barcode based inventory management system enables warehouse and retail staff to scan these unique codes to automatically pull up the complete data of the inventory item being scanned. This information based on a Universal Product Code is thus able to be tracked by an inventory management software system so that the inventory system is always up to date with the latest transactions.

Initially, barcode scanning systems were simpler, with a single horizontal line of bars and lines that can be considered as one-dimensional. While a barcode only holds information in the horizontal direction, modern formats such as the QR code can hold information in both horizontal and vertical directions, considered to be two-dimensional barcodes.

No matter what type of barcode you use, it provides huge advantages when it comes to managing your inventory. As barcodes are unique, room for error or manual dependency is almost null and that is what makes this system so much more effective.

Barcode based systems are now essential for businesses to not only keep track of inventory but also to extract data, direct people to a website, make secure payments and much more. It is safe to say that the possibilities of 2D barcodes have, frankly, not yet been explored to their fullest potential at this point.

Making the transition to a barcode inventory system

An inventory management solution with a fast and accurate barcoding system and becomes essential for retailers who:

  • Manages inventory in warehouses
  • Consume high levels of inventory
  • Work with vendors who utilize barcode scanning
  • Sell across multiple online/offline channels

Transitioning from a manual to automated barcoding system is all about understanding what is the right solution for your needs and implementing the solution with the right support and guidance.

Check Compliance with Industry Standards

Start by making sure that the barcode system you want to deploy is accepted and used within your industry and by government and regulatory bodies. Different industries have mandated norms for product packaging and labelling and your choice of barcode system will be based on that as well as your inventory workflow and products.

Create a Universal Product Code

Before implementing the barcode on your products, you will need to create an asset code in accordance with regulations and as per industry norms. The code you create is called the Universal Product Code (UPC) or Stock Keeping Unit (SKU).

UPCs are 12 digit long codes, standardized to be accepted for business use around the globe. SKUs are 8 digit long codes that are unique to every business. SKUs are used for internal warehouse operations and can be generated manually by inventory management software.

With the UPC in place, you will need to finalize decisions on what information your barcodes will contain. All the necessary information about your product to be successfully delivered based on your business needs including location, product identity numbers, expiration date for perishable items and much more.

Generate Barcodes and Invest in Barcode Scanners

Now you are ready to generate the barcodes to add to your products. The main task of creating a barcode for each of your products can be done by either using an online barcode generator or a barcode software. Once have created the barcode, you need to print the label sheet using a printer and attach them to the products.

A scanner is a wired or wireless device that allows your staff to maintain operations throughout the warehouse and gives real-time updates on your inventory. Wireless scanners give staff the flexibility to move around the facility and handheld barcode scanners wired are the most popular choice for both small and large retailers.

Select a Barcode Software Solution

Selecting a software system to track your barcodes, manage your inventory and perform other operational tasks is the really crucial decision you will need to make to complete your transition and make the barcode based inventory management operational. Keep in mind to select a system that complies with industry requirements and can handle your unique business needs across channels and delivery options.

Vin eRetail by Vinculum helps you make smarter fulfillment decisions with an advanced inventory & order routing engine. Simplify complex workflows through the automated order routing based on predefined service levels for part fulfillment, drop ship orders, back order management or back-to-back orders. The centralized inventory management is perfect to keep track of your products as you sell and restock across multiple locations and channels.

Vin eRetail supports hand-held devices for scanning and can handle multiple barcodes for a single item. The system generated barcode labels and barcode scanning are great for easy operations and it supports multiple barcodes for a single SKU.

Making the Case for Barcode Based Inventory Management

While it does represent a significant investment for retailers with large operations, implementing barcoding tracking can be hassle free with the right inventory management solution. The benefits in terms of error free operations and streamlined inventory management can result in significant competitive advantage – in terms of cost savings and better fulfillment capability for your ecommerce or retail business.


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