Pick up any packaged product and spot the familiar rectangle made up of black lines on white space with a series of numbers underneath. We all know these as bar codes, but what do they do and how can they be of use to your business?

If you wish to sell your products through a large retailer, it may be time for a bar coding system. Also known as uniform product codes or UPC symbols, bar codes allow both you and the retailer to track inventory by linking information through the chain of production, warehousing, distribution, sales and service. But even as only an internal measure, this can be an efficient way to control your stock. Using this identification tool to capture data may be a big change in how you do business, but the investment could pay off quickly with increased efficiency and accuracy.

You may create your own bar codes for a strictly internal tracking system without fulfilling any external requirements. However, if your products are part of a larger retailing process, you will want to comply with GS1 standards. As an international standards organization that provides bar codes used and recognized around the world, GS1 ensures that your numbers are unique to your business. To obtain bar codes from GS1, you must be a member.

The costs of having a bar coding system need not be extensive. You can choose a system as simple as your needs. If work is done faster and with far fewer errors, it may be worth investing in the necessary components:

  • GS1 membership
  • Software (database of information)
  • Hardware (printer, labels, scanning equipment)

You may use each code, either pre-printed on the packaging or as a sticker, on one product only. No prices or product details are in the code itself, but when scanned, it is sent to the store's main point-of-sale where the information is retrieved and applied.

While machines read the lines and spaces of a bar code, you can also “read” bar codes if you know how they are constructed. To read a bar code in Canada:

  • Read the twelve digits that make up the uniform product code number.
  • The first six digits identify the manufacturer.
  • The next five identify the item.
  • The check digit is last, to ensure that the item scans properly.

For more information, the Office of Consumer Affairs has a Consumer Trends Report with details about the use of bar code technology in the retail sector. To find more information on inventory control, see our section on Supply chain management.