How to Set Up a Barcode System for the Warehouse


This comprehensive guide is designed to show you how to set up a barcode system for the warehouse. For over three decades, Principal Logistics Technologies has been dedicated to the continuous development and enhancement of Empirica WMS, transforming it into a renowned Warehouse Management System. 

You can find out more about our cutting-edge hosted SaaS solution known as ProSKU WMS Cloud by booking a short introductory chat or demo.


What is a barcode system?

Barcode systems are ubiquitous in any warehouse and store in the 21st century. Huge amounts of automated data about individual products are captured in code, made up of numbers and lines, created by computer software, printed on labels and adhered to the stock items.

Sophisticated scanners can read this code and send it back to a computer where the specialised software interprets the code and updates the information to control and track inventory.

A barcode system makes it possible to automate data collection and control at levels not possible otherwise. Rather than manually writing or typing information on labels, the barcodes encrypt vast amounts of information on a small label for fast transfer to a computer by means of a scanner, which can be mobile and handheld. Once interpreted by the computer, this information can be printed on invoices, inventories, shipping documents, and much more.


How was the barcode system invented?

Virtually since the Industrial Revolution and the development of trade, it has been a challenge to effectively control inventory and keep accurate track of stock levels and sales.

This conundrum led to the first barcode in 1948, designed like a bullseye with reflective lines, that only worked in the laboratory because of the technological limitations of the time and the first practical implementation of a linear barcode was introduced in the 1960s to track rail cars in the USA.

Only in 1974 did the invention of lasers and integrated circuits make it possible for RCA and IBM to develop barcodes suitable for retail, but it was not until the 1980s that the Universal Product Code (UPC barcode) was widely adopted in supermarkets. This greatly sped up checkout and improved the accuracy of the checkout, reduced fraud and theft, accurately monitored sales in real-time, and the ability to generate reports for stock audits and inventory management.

The dot-com boom merged the digital and physical world and together with smart technology, the retail world evolved into a new universe of online shopping and warehousing, making barcoding indispensable to track assets and asset movement throughout the supply chain.


Why do you need a barcoding system?

It is no longer possible to keep up with the fast pace of business and meet customer demands without using the best technology available. Warehousing management systems (WMS) have made warehouses much more efficient, productive, and profitable.

A barcoding system is a vital component of an effective WMS, saving costs and labour; minimising lost inventory; accurately recording and transferring information; simplifying goods receiving, stock identification, picking, and shipping; and maximising storage space.


Can you manage a warehouse without a barcoding system?

Warehouse management systems can function quite well without barcoding, but the question is whether your business can afford to be without it.

Tiny suburban shops or kiosks, and warehouses with an uncomplicated inventory, might still survive without barcodes in the 21st century but it is unthinkable that you can manage a warehouse, distribution centre, 3PL logistics, or eCommerce business of any substance and complex inventory without it.

Your supply chain partners, vendors, and third-party customers will often demand the use of barcodes that can be integrated with theirs in the supply chain.

What is the difference between a barcoding system and an RFID system?

These two systems in essence do the same work, which is to track and manage inventory, but use different technologies, and it is not uncommon to see both systems in use in a warehouse.

Barcode readers use laser light technology to read the barcode patterns on labels, while RFID (radio frequency identification) uses radio waves to retrieve and transmit data from electronic tags or microchips.


What do you need to know before you purchase and set up a barcode system?


Decide whether you need a barcoding system, an RFID system or a combination of both systems.

Familiarise yourself with the different types of barcoding and labelling systems, and get to understand automatic data collection devices and software.

Decide how best to integrate your barcoding system with your WMS software and your business procedures.

Select the best type of barcoding system for your warehouse from these main types:

Numeric barcoding systems

This is known as a one-dimensional system because it comprises only numbers and bars of various widths and spacings, capturing information like product identity, and manufacturer’s information.

Three of the numeric barcode systems, namely, Universal Product Number (UPC); Interleaved, and International Article Number, are widely used in retail, warehousing, telecommunications, and airlines for inventory flow and point of sale.

A widely used version of numeric barcoding systems is Code 39.


Alphanumeric barcoding systems:

This barcoding system consists of a combination of numbers and letters and bars of various widths and spacings.

Code 128 is one of the alphanumeric barcoding systems most widely used in warehousing and supply chain operations because of its compact high-density codes which can store vast amounts of diverse information.


Two-dimensional QR code or Data Matrix barcoding systems

QR (which means “quick response”) codes usually have a square or rectangular shape with a combination of short lines, dots, and geometric shapes, while some include data matrix codes used in electronics and logistics.

They are called two-dimensional because hundreds of times more information can be stored on both the vertical and horizontal planes.

They are very popular in the shopping and computer application industries because they can be scanned by consumers with smartphones. They can store information such as brand name, model number, maintenance records, telephone numbers, login details, online account information, and links to websites.

QR codes are also widely used for warehouse inventory management, maintenance, transportation, the travel industry, software applications and play stores.

Data Matrix barcoding can also contain serial numbers, lot numbers, production dates, expiry dates, etc.


Steps to set up your barcode system in a warehouse

Choose the type of barcoding system that will best suit your warehouse.

Decide whether you want to use a numeric, alphanumeric, or QR barcoding system.

Factors like the complexity and volumes of your inventory, the cost to implement the system, etc. will need to be considered.

Define which information is important to your warehousing operations to maximise workflow and efficiency. As an example, you could include information like stock codes, item descriptions, specifications, product and storage or shipping dimensions, weight, manufacturer’s details, country of origin, supplier details, purchase price, date of purchase, lot numbers, quantities in stock, stock levels required, resale price, discount levels, expiry dates, tracking information, shipping and logistics partners, seasonal popularity, etc.


Choose the correct barcoding software system to integrate with your WMS

ProSKU perfectly integrates with almost any barcoding system and expands your options to voice picking, RFID, and much more.

With budget constraints, it might be advisable to purchase modular software such as ProSKU, adding functions as you need them.

Choose the most suitable scanners and scan engines that match your WMS and barcoding system

Warehouse scanners are usually mobile devices that read the barcodes on your tags, and send the information to the barcode scan engine for analysis.

The scan engine analyses and decodes different barcode labels, using the software on your computer.

Decide which type of scanner and scan engine will work best for your warehouse, also bearing in mind durability, ease of use, serviceability and finding replacement or expansion components. Do you require wireless technology? Which type will integrate best with your existing and other warehouse management software? How far do the scanners need to be from the barcode label for accurate scanning? Some need to be held close to the label, while others have a floor-to-ceiling capability.

There are three main types of scan engines, laser, linear imager, and area imager.

A laser scan engine uses an optical system with a moving mirror to make the laser line which is reflected onto a photodiode and a processor that decodes the light signal and outputs the decoded data via a serial interface, USB, Bluetooth or wireless port.

A linear imager scan engine takes a picture of the barcode, which is analysed and decoded by the scan engine, and the decoded data is output via a serial interface, USB, Bluetooth, or wireless port.

An array imager scan engine has the capability to handle OCR, document, and image capturing, and can scan two-dimensional barcodes. Output can be via serial interface, USB, Bluetooth, or wireless port.


Generate SKU codes for all your stock items and their variants

All the information about the product, such as physical description, specific model, measurements, purchase cost, manufacturer and vendor information, minimum stock required in your inventory, etc. is entered into the software.

The first step for most warehouses starting this process is to set up a product list on a spreadsheet, listing all the information that you can tie to the barcodes for each product.

At first, this seems a daunting task but it can be done in baby steps, starting with all new transactions, pick slips, purchase orders, and key products. You can then proceed in stages to incorporate the rest of your inventory per category until the job is completed. Your WMS will record every new addition and update your automated inventory. In the interim, you can run the automated and manual systems in parallel.

Once all the information has been entered into the software, these codes are computer-generated by the software, giving each inventory item a unique alphanumeric code identifier, known as a Stock Keeping Unit or SKU, to identify and track that item. It might be wise to synchronise your barcodes with those of your other partners in the supply chain for greater efficiency and seamless transactions.

Specialist barcode generators are included in some of the software, while others offer an online service, often for free.


Label your inventory

Decide if you want to label your inventory in batches or relabel all stock items in one go during a stocktake.

The codes generated by your software system are then printed on labels or tags that are adhered to the product and usually also a location identifier on the shelf. Remember that the location of an item is often more important than the product description to easily access, pick or ship orders.

Specialist barcode design and printer functions are included in the top software, while others offer it as an add-on.

Bear in mind physical factors that might affect your barcode labels and cause deterioration. Is your inventory exposed to extreme heat or cold, moisture, sunlight, abrasion, etc.?


Integrate your WMS Warehouse Management Software and barcode system

Your warehouse management system (WMS) such as ProSKU, manages and integrates all the technology in your warehouse operations.

It identifies the data from the scanner and engine, confirms the accuracy and instantly computes all the information in real-time. You can generate reports, invoices, shipping manifests, etc. at the push of a button.

ProSKU Cloud WMS easily and fully integrates with a warehouse barcoding system and other software platforms. It collates all data to manage receipts, storage, picking, rotation, and dispatching of inventory items, generating detailed reports which are instantly and securely available from a smart device.


Put your barcoding inventory into operation

Map out the warehouse layout to optimise storage, travel distances for picking, and maximising workflow. It is usually best to work as a team, taking advice from the people who are on the floor and will be using the system. This will create a better understanding of the process and help to get your staff to buy into the new system.

It is now time to pack all your inventory items in the allocated spaces while optimising storage and travel distances for picking.

Train your staff to effectively and efficiently use the barcode system.

Stock can now be audited with the greatest of ease and accurate records are kept of inventory and timeous placement for replenishment orders.

You will immediately enjoy considerable benefits when migrating from a manual or paper-based system, which includes greater efficiency, cost and time savings for labour, accurate inventory, accurate picking and shipping, improved workflow, greater visibility and instant access to information required for strategic management decisions.

Review your processes regularly to ensure you are still doing business most efficiently and cost-effectively.

Get in Touch

Find out more about our cost-effective, versatile and fully featured WMS software suite, designed to meet the diverse needs of your business.

You can book a short introductory chat or demo online or call us on +44 (0)800 170 1161.