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9 Benefits of a Barcoding System In a Warehouse

Barcoding systems are indispensable in warehousing and other industrial operations. Using barcodes makes it easy to identify items, enter data, and access information about tools, equipment, workers, and storage locations.

It’s difficult to quantify the benefits of a barcoding system because it depends on factors such as the scale of your operations and daily activities. However, barcodes can eliminate many problems in warehouse operations such as inaccurate data entry and loss of items.

Whether you have a manufacturing or construction company, or you’re in logistics, there are many reasons to consider setting up a barcoding system. This article highlights nine of these reasons plus some challenges to expect when implementing such a system.

What is Barcoding in a Warehouse?

Barcoding is an identification system where information is encoded, printed on labels, and attached to corresponding items and locations. The encoded information can be read by special scanners or readers.

These printed labels are called barcodes and scanning them can trigger different actions within the system. The system can return information that helps an employee correctly identify an item, or it can indicate that an item has been moved from one location to another, among other things.

In industrial operations, barcoding facilitates quick, accurate, and automated operations. Warehouse employees can get a lot done armed with nothing more than a barcode reader. As you’ll see below, this comes with many benefits.

Benefits of Barcoding in a Warehouse

Barcoding systems in warehouses have many benefits. Some of these are highlighted below.

Accurate Data Capture

Manual data entry has many risks. A simple spelling mistake, transposition error, or entering data into the wrong location can have major negative downstream effects that lead to financial losses or customer dissatisfaction.

With barcode systems, entering information into the system is as easy as scanning a label. The software is already programmed to take the correct steps with this information when the barcode is scanned. Errors may still happen but they’ll be rarer.

Faster Operations

Scanning barcodes is much faster than manually entering data. Manual data entry depends on employees’ ability to quickly read labels and input the necessary information into the system. Even the fastest employee using such a system will be slower than a barcode scanner.

Depending on the number of items an employee needs to process within a certain period, manual data entry may be more expensive than you realize.

Improved Visibility

Depending on customer expectations or the nature of the items you handle, it may be necessary to know exactly where certain items are at any point in time. For example, if there is hazardous waste, it will be important to track the package as it moves through different sections to ascertain it’s going through the appropriate procedures at the correct speed.

Having barcode labels that are scanned as such items are moved through the facility or taken out for delivery enables this.

Improved Inventory Control

When you don’t have a good idea of how much inventory you have at hand, it’s easy to have too little or too much of something. Many mitigate this issue by overstocking but this is wasteful.

A barcoding system can give you timely and accurate updates on inventory levels, ensuring you only replenish items when it’s necessary. This will allow you to hold less inventory without the risk of running out of stock to fulfill orders.

Streamlining Processes

With non-automated systems, employees may not always know the next step once they receive a package or moved it from one place to another. Barcoding systems create a framework that makes it easier to define and streamline processes, eliminating ambiguity.

By scanning an item at one location, an employee can receive specific instructions on what to do with the item or where it needs to go next. Barcoding can also limit the need for additional steps e.g., opening boxes to verify the contents. This will save time.

Faster Employee Training

Training new employees to perform manual operations requires more time than training them to use automated systems. Manual operations have more procedures and steps and it may take longer for a new employee to figure out the system.

Barcodes eliminate many of these steps, reducing the number of things new employees must be trained on.

Improved Decision Making

The quality of decisions made by top management is determined by the quality of information they have about the whole company. With a barcoding system in place, top management can receive accurate and timely reports on company operations, inventory levels, personnel, etc.

This can help inform major purchase decisions, future planning, need for recruitment, etc.

Productivity Tracking

In many companies, employee tags have barcodes. These barcodes are scanned when entering and exiting the facility or at different checkpoints during certain operations.

This is useful for determining when employees are productive or if certain operations are taking longer than necessary.

Access Control

Doors that can be opened using barcodes make it simple to control which employees can access certain areas of the company. This can eliminate the need to constantly monitor entry points. Barcodes also make it simple to enable or disable access for employees and determine which employee accessed a high-security area at some point in time.

Challenges of Implementing A Barcoding System

Barcoding systems have many benefits but they are not perfect. When implementing such a system, there are hurdles you’ll want to keep in mind.

Labeling Can Be A Lot of Work

In large operations, barcoding is crucial because it will make other operations easier. However, attaching the barcode labels will also be a huge task if the items don’t arrive prelabeled.

This challenge will also be present when labeling locations. Once the labels are up, they may significantly improve productivity. However, when many locations need labeling, this will require a lot of time and effort.

Upfront Costs May be High

Different equipment will need to be acquired to have a good barcode system. These will include computers, scanners, and label printers. You’ll also need to set up a network and you may need some premium software.

Paying for all this can be expensive especially if you’ll need scanners for many employees. You can cut costs by using free software for certain operations e.g., a free barcode generator to create the labels.

Before investing in a barcoding system, calculate the cost of implementation and compare this to how much you’ll save. This is especially important if the scale of your operations is still small.

Errors May Happen

Barcode systems rely on barcodes. Unfortunately, these are not always easy to scan. Barcodes can become damaged especially if printed on the wrong materials and others can become stained and unreadable.

Scanner malfunctions can happen or employees may scan the wrong barcode. This latter issue is more likely when employees are not adequately trained.

Tips for Implementing a Barcoding System in a Warehouse

Despite the challenges mentioned above, the value of a barcoding system will be obvious to many businesses. If you decide it’s time to invest in such a system, here are some tips that can make implementation easier:

  • Identify Your Goals: Different companies have different reasons for implementing barcoding systems. Understanding yours will help to justify the cost and determine the information that should be encoded and the processes to be followed.
  • Understand Your Needs: Which materials will survive the labeling conditions? How close will workers need to get to scan barcodes? Where should barcode labels be mounted? These types of questions should be answered before purchases are made.
  • Implement Gradually: A barcoding system can be a huge investment. A gradual implementation will give you a chance to assess the system and determine if you need it. This also helps you figure out the best approach before you go all in.
  • Explore Your Options: Don’t settle for the first scanner or printer you find. There are many equipment options in the market. Some are more cost-effective and others will meet your niche needs better.
  • Invest in Personnel Training: Even the perfect system will fail if the personnel using it are not properly trained. Ensure employees are trained on the relevant processes and procedures to limit errors.


Barcoding systems can result in faster and more accurate data capture in warehouses. They can also improve the visibility of items as they move in and out of facilities and make it easier to keep track of inventory levels.

These benefits and others can improve individual and company-wide productivity. However, implementing a barcoding system comes with significant challenges such as the initial cost and the time and effort needed to correctly label items.

If an industrial barcoding system makes sense in your warehouse ensure that your goals are properly laid out and understand your barcoding needs to help direct your efforts. You should

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