Inventory tracking is an important part of warehouse operations, manufacturing and supply chain. If businesses struggle to identify stock reliably there can be issues with inventory discrepancies, delays to fulfill orders, and unnecessary costs to operations.
Often businesses will use either barcode scanning or RFID to overcome these issues.
While both can help businesses identify their inventory the technologies are different and will have different use cases. Knowing the strengths and weaknesses of both will help organisations choose the correct solution for their needs.
- Barcode Inventory Tracking
Barcode systems make use of printed labels with machine readable information.
These are scanned and information is passed into inventory or other systems.
Typically the process would be;
Supplier delivers goods to the warehouse.
Employee matches the goods to the purchase order.
Employee scans each item or packaging.
Inventory system records the goods received.
Items are scanned as employees pick, transfer or ship.
This removes the need to manually enter data and helps create a consistent tracking system.
Pros
Relatively easy to implement – Many businesses will already have the correct labelling, scanning equipment and inventory systems in place.
Simplicity – Basic systems can be set up with less infrastructure than more complex tracking systems.
Versatile – Can be used for receiving, stock taking, picking, packing and shipping.
Easy to identify – Employees can scan the labels to find information quickly without having to search through long product lists.
Cons
Typically you will need to scan the label directly. This can cause accuracy issues if the label becomes damaged, poorly printed or scanning errors occur.
If you have lots of items in your warehouse it can be time consuming to scan each item.
Barcode systems work best when labels are easily readable, products have accurate information and employees are consistently recording inventory.
- RFID Inventory Tracking
RFID systems use radio waves to identify items with RFID compatible tags.
An RFID system will generally have tags, readers, antenna and software.
Depending on the technology used you can generally identify multiple tags using a reader.
For example, RFID readers can be placed in certain areas of your warehouse to help track tagged goods.
Pros
Fast – Can identify multiple RFID compatible tags.
No need for line of sight – Does not generally require line of sight.
Automated – Readers can be connected to software to allow identification events to be captured.
Asset tracking – RFID can help you track your assets.
Cons
Costs need to be considered carefully. Tags can be expensive, readers need to be placed in the correct areas, interference can be a problem and the material and environment can impact performance.
Some RFID systems can struggle with metal and liquid. This will depend on the tag, frequency and setup.
You need to consider what you will do if items are not read, duplicates or incorrect items are recorded.
RFID is not a simple solution to replace barcodes. It can only be beneficial if it solves a real issue within operations.
- Barcode vs RFID Key Differences
Below are some general differences. Performance will vary depending on what equipment is being used, environment and implementation.
Consideration Barcode RFID
Method of Identification Optical scanning Radio waves
Line of sight Generally required Not generally required
Read multiple items Usually need to be scanned individually Can be done with the correct systems
Label/Tag Cost Typically low Varies depending on tag type and use
Infrastructure Scanners and Labels Tag, Reader, Antenna, Software
Typical uses Stock Taking, Picking, Receiving & Shipping Asset tracking, Automated identification, Certain Inventory processes
Main considerations Consistent scanning and readable labels Reliable readings and correct setup
Both systems will only be accurate if the data is reliable, processes are clear and integrated into inventory software.
- Choosing the Right Option
Before investing in new equipment think about what issues you are looking to solve.
Barcode scanning may be helpful if;
Individual items are easily accessible for scanning.
You want a simple and affordable tracking system.
Your current inventory processes use printed labels.
Your main issue is manual data entry and inconsistent recording.
RFID may be helpful if;
You need to identify multiple tagged items.
Tracking a large amount of reusable assets is important.
You could improve visibility with automated identification at certain points.
It will solve an issue and the costs of tags, readers, integration and maintenance are justified.
Some businesses may get the most out of using both systems. RFID can be used to automate certain processes and barcodes can be used to identify individual items and manage exceptions.
If you are trying to decide which system to use for inventory "The Inventory Master" ([https://theinventorymaster.com/]) is a good starting point.
- Integration
The more integrated your tracking system is the more useful it will be.
Imagine if you are scanning items in your warehouse on receiving but aren’t updating your inventory system until the end of your shift. While your tracking system may be working, your employees will be seeing out of date stock levels.
You need to know how your identification events will update your inventory.
Key questions to ask;
What system is keeping track of the inventory levels?
How will the product identifiers link to SKUs?
How will stock be transferred and returned?
What happens if items aren’t scanned or read by RFID?
How will duplicates be avoided to avoid incorrect transactions?
How can employees identify discrepancies?
These questions should be answered before implementing.
- Measuring Performance
Before implementing a new tracking system you should measure your current performance.
Useful metrics to measure;
Accuracy of inventory.
Time taken to complete stock taking.
Inaccuracies on receiving.
Accuracy of order picking.
How often manual changes need to be made.
How much labour is required for certain tracking processes.
For example measuring how long it takes to count a sample of products in your warehouse.
Also ensure that your inventory is more accurate.
Piloting the system can be a good idea. This means that you can try it out in one area and your employees can see any real world issues.
Conclusion
Both barcode and RFID systems can help improve identification of your inventory.
Barcode systems are often a good option if you need simple scanning of products and reliable recording. RFID can add benefits if you can automate identification or read multiple tagged items to solve a particular issue.
Choosing the right system will depend on what your processes require, the cost of implementing, environment, integration with software and what you want to achieve.
Start by thinking about the issues you have with your inventory and trial the right options. A well designed tracking process with accurate data and consistent processes will ensure you have reliable inventory.
Top comments (0)