How Do Barcodes Work? Learn About UPCs, SKUs, Inventory Management, POS Systems, and More

Summary

This video from KORONA POS delves into the world of barcodes, explaining their importance in inventory management for retailers. Barcodes, invented in 1951, have evolved to streamline product tracking and sales. The video differentiates between barcodes, SKUs, and UPCs, highlighting the benefits of barcodes such as improved inventory accuracy and operational efficiency. It also touches on the types of scanners used and the significance of UPCs in retail, offering insights into how businesses can leverage barcode technology for growth and cost savings.

Takeaways

• 📈 Barcodes are essential for inventory management, allowing seamless tracking of products from entry to sale.
• 🔍 Barcodes differ from SKUs and UPCs, serving distinct functions in retail operations.
• 🚀 Barcodes were invented in 1951, inspired by Morse code, and have remained largely unchanged due to their effectiveness.
• 🛒 The first commercial use of barcodes was in 1974 with a pack of chewing gum, marking a significant milestone in retail technology.
• 💡 Barcodes encode product information, which can be translated into text and linked to additional data via POS systems.
• 📊 Barcodes offer significant benefits, including easier inventory management, increased accuracy, and improved operational efficiency.
• 📊 Implementing barcodes is straightforward, with data migration taking minutes and new UPCs/SKUs being easily created in bulk.
• 💼 Real-time data from barcodes helps in managing stock levels, connecting sales channels, and automating reordering with suppliers.
• 🔗 Barcodes are a long-term investment, with the technology's core principles remaining relevant despite advancements like QR codes.
• ⏰ Barcodes save time and reduce overhead costs by eliminating the need for full-time inventory managers and automating various processes.

Q & A

What is the significance of barcodes in inventory management?

Barcodes are crucial for inventory management as they allow merchants to track products from the moment they enter the store until they are sold. They simplify the checkout process and inventory operations, providing a seamless way to manage stock levels and product information.

Who invented the barcode and what was their inspiration?

The barcode was invented in 1951 by Norman Joseph Woodland and Bernard Silver. Their inspiration came from Morse code, translating the dots and dashes into thick and thin bars.

How did the barcode evolve after its initial invention?

The original circular barcode design was altered by George Laurer to a horizontal format in the early 1970s, making it easier to read by scanners. This design has remained relatively unchanged, featuring an array of black lines of varying thicknesses accompanied by numbers.

What was the first product ever scanned with a UPC code?

In 1974, a pack of chewing gum became the first product ever scanned with a UPC code, marking the beginning of barcode usage in commercial transactions.

How do barcodes encode information about a product?

Each barcode has a unique combination of lines that encode certain information about a product. This information can be translated into text and sent to a POS device, which can attach further details such as pricing and product description.

What are the key benefits of using barcodes in retail businesses?

Barcodes offer several benefits including simplified inventory management, improved accuracy, ease of implementation, real-time data insights, and the ability to scale business operations. They also save time and reduce overhead costs by automating various processes.

How does a barcode system improve the accuracy of inventory management?

Barcode scanners reduce the likelihood of clerical errors, leading to improved accuracy in inventory tracking. This enhanced accuracy helps with better ordering, costing, pricing, promotions, and loss prevention.

What are the different types of barcode scanners and their uses?

There are 1-D scanners that read simple barcodes on flat surfaces and are often handheld. 2-D scanners can process more complex codes like QR codes and can scan omnidirectionally. Alphanumeric scanners can also pick up SKU codes for more detailed product segmentation.

What is the difference between a UPC and a SKU?

A UPC (Universal Product Code) is a universal identifying code used across all retail locations, while a SKU (Stock Keeping Unit) is an alphanumeric code used internally within a single company to track inventory.

How does a UPC code help in the ordering, inventory, and checkout process?

A UPC code, consisting of black bars and a 12-digit numeric code, simplifies the ordering, inventory, and checkout process by providing a quick and standardized way to identify products across different retailers.

Why is implementing a barcode system considered a long-term investment for businesses?

Barcode systems are considered a long-term investment because they have remained effective and relevant over the past 50 years. The fundamental technology and associated hardware have not changed significantly, ensuring that the investment will continue to be valuable.