A barcode system is an optical machine – readable representation of data which shows certain data on certain products. A typical bar code usually consists of a series of parallel, adjacent bars and spaces. These predefined bar and space patterns are used to encode small strings of character data into a printed symbol.

Bar codes can be read by optical scanners called bar code readers or scanned from an image by special software. Barcode systems are used to automate data collection where hand recording is neither timely nor cost effective. Barcode technology helps to identify and track products since it is a simple and inexpensive method.

A typical barcode system consist of some infrastructure, either wired or wireless that connects some number of mobile computers, handheld scanners, and printers to one or many databases that store and analyze the data collected by the system. At some level there must be some software to manage the system. The software may be as simple as code that manages the connection between the hardware and the database or as complex as an ERP, MRP, or some other inventory management software.

Supply chain management is easily manageable through many supply chain management based softwares, which makes integration of businesses easier. The process becomes even simpler with the aid of barcodes. Barcode technology helps keep track of products and services that they identify, and therefore provide all necessary information about them. Every point of the supply chain involves vendors and suppliers who must be able to provide all details when asked. Their inability to do so will mean being left behind and their job assigned to a competitor. The use of barcodes would ensure detailed and correct information, which ultimately helps to reduce costs.

Barcodes provide accuracy and speed that help in reducing expenses incurred to rectify errors made by manual oversight or faulty data entry. Using barcoding for materials and supply chain management captures data faster and more accurately. Costs are lowered and data entry mistakes are minimized, making managing inventory easy and purchasing more efficient.
Barcodes may also be scanned for:

  1. Tracking deliveries in transit, at key points of contact
  2. Recording issues of items from stock, updating stock levels
  3. Recording outgoing deliveries or sales, in an EPOS system to customers.
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