SKU, UPC, and Barcodes in the Warehouse

How you run your warehouse, i.e. your warehouse management, plays a crucial factor for maintaining accurate inventory records, streamlining operations, and delivering products to customers as fast as they come in. While most businesses  have used or at least heard of the SKU (Stock Keeping Unit), UPC (Universal Product Code), and barcodes, many don’t fully understand the differences between them, or the big benefits their use can bring. 

For this post,, we will delve into the differences between SKU, UPC, and some barcode types, explore their individual functions, and cover the potential  implementation process in your warehouse. By understanding and leveraging these systems, your business can optimize inventory management, cut back errors, and improve overall efficiency.

What is a SKU?

SKU, short for Stock Keeping Unit, is a unique alphanumeric code assigned to each unique product in your inventory, which serves as an internal identification system to both categorize items and then track those items. SKUs can be created based on a number of attributes like product category, size, color, or any other unique characteristics. By assigning unique SKUs to your products, you gain better control over your inventory and simplify the management of diverse product offerings.

How to assign SKUs to products:

1. Evaluate your product categorization needs: Determine the level of granularity required to effectively categorize and manage your products.
2. Develop a consistent SKU numbering system: Create a logical structure for your SKUs that aligns with your inventory management goals. For example, you can use a combination of letters, numbers, or both.
3. Assign unique SKUs to each product: Once you have established your SKU numbering system, apply it to every product in your inventory, ensuring that no two products share the same SKU.
4. Document SKU assignments for reference: Maintain a master SKU database that links each SKU to the relevant product information, such as description, price, and supplier details. This documentation will serve as a valuable resource for your warehouse staff.

What is a UPC?

UPC, which stands for Universal Product Code, is a standardized barcode symbology most commonly used in the retail industry, but first starts as a means to track items in the supply chain. The UPC system provides a globally unique identifier for each product, making it possible to identify and track items across different stores, e-commerce platforms, and warehouses.

To put it simply, a SKU for a product is created by you (the business), while a UPC for a product  is the same for you, me, and everybody.

How to obtain a UPC for your products:

1. Determine if your products require a UPC: Consider the channels through which you sell your products, such as online marketplaces or brick-and-mortar stores. If your products will be sold in retail environments, a UPC is generally necessary.
2. Register for a GS1 Company Prefix: GS1 is a global standards organization that assigns unique identification numbers to businesses. Obtain a Company Prefix from GS1, which will serve as the basis for generating your product-specific UPCs.
3. Generate unique UPCs: Combine your assigned GS1 prefix with product-specific numbers to create unique UPCs for each of your products.
4. Associate UPCs with corresponding products: In your inventory management system, link each UPC to its corresponding product, including details like SKU, product description, and pricing.

What are (Traditional) Barcodes?

Barcodes are machine-readable (scannable) representations of data that are typically displayed in the form of parallel lines of varying widths and spacing. These visual codes encode information in a format that can be easily scanned by barcode readers or scanners. Barcodes serve as a bridge between physical products and digital data, enabling quick and accurate identification and tracking.

Types of barcodes commonly used:

1. UPC-A: The most common type of barcode, widely used for product identification and scanning at the point of sale. It consists of 12 numerical digits encoded in parallel lines.
2. Code 39: This barcode symbology supports alphanumeric characters and is often used for inventory management purposes. It can encode letters, numbers, and a few special characters.
3. Code 128: A high-density barcode that allows the encoding of large amounts of data. It is commonly used in supply chain operations and can represent both numeric and alphanumeric data.

Visually, these barcodes look nearly identical, but their formats allow for varying amounts of information, BUT… with the increasing amount of data available for products, these traditional barcodes may not be enough for your business.

What are 2D Barcodes?

Unlike traditional linear barcodes, 2D barcodes are composed of square or rectangular patterns, consisting of various combinations of squares, dots, and other geometric shapes, with the most common examples being QR codes, Maxi Code, and Data Matrix. These 2D barcodes can store significantly more information compared to their linear counterparts and have become increasingly popular due to their versatility and enhanced data capacity.

The adoption of 2D barcodes offers several advantages for warehouse operations, including:

1. Increased data capacity: 2D barcodes can store much more information than traditional linear barcodes. They can encode alphanumeric characters, website URLs, product descriptions, and even images, providing comprehensive data in a compact format.
2. Error correction: 2D barcodes often incorporate error correction algorithms, which means that even if a portion of the barcode is damaged or obscured, the data can still be read accurately. This feature improves data integrity and reduces scanning errors.
3. Faster scanning: Due to their high data density, 2D barcodes can be scanned quickly and accurately, allowing for faster inventory management parocesses such as stocktaking, order fulfillment, and product tracking.
4. Enhanced product information: 2D barcodes can link directly to detailed product information, including specifications, instructions, and safety guidelines. This is especially useful for industries that require regulation oversight, such as food and beverage, medicine, health, or even firearms.

Implementing 2D Barcodes in Warehouse Operations

Here’s a quick rundown of how to include 2D scanning and barcodes into your warehouse.

Barcode scanning equipment: Ensure you have barcode scanners capable of reading 2D barcodes. These scanners should be compatible with the chosen 2D barcode symbology.

Staff training: Train your warehouse staff on how to scan and interpret 2D barcodes accurately. Familiarize them with the specific scanning requirements and techniques for different types of 2D barcodes.

Software integration: Integrate your barcode scanning equipment with your inventory management system or warehouse management software. This integration enables seamless data synchronization and real-time inventory updates.

Mobile Warehouse Software: Bring together all the tools above, and maximize your business productivity.

For example:

• Inventory management: Use 2D barcodes to track and update inventory levels automatically, reducing manual data entry and minimizing errors.
• Order fulfillment: Scan 2D barcodes to quickly and accurately pick items for orders, improving efficiency and reducing order processing time.
• Quality control: Attach 2D barcodes to products or packaging to enable easy access to quality control information and ensure compliance with standards.
• Product traceability: Encode important information such as batch numbers or expiration dates in 2D barcodes to facilitate product traceability and recall processes.
• Asset tracking: Utilize 2D barcodes to track and manage warehouse equipment, tools, and other assets, improving visibility and reducing loss

Takeaway

SKU, UPC, and Barcodes provide a systematized process to enhance your business productivity in a manner that suits your needs.With a properly implemented barcode process, your warehouse will discover optimized inventory management processes and improve operational efficiency. Additionally, incorporating 2D barcodes into your existing inventory management provides your business more information to leverage to its advantage.

If your business wants to grow and enhance  its warehouse operations, get started here.