How Barcodes Changed the Supply Chain
Most products today moving through the retail supply chain are tracked via a series of codes, the most common of which is the Universal Product Code (UPC). This UPC is what we see and refer to as barcodes, and one that is almost always present in the product packaging of things we buy.
While there are various types of barcodes, the only one that has universal acceptance and is used as a standard is the Universal Product Code (also referred interchangeably as IAN, EAN or GTIN — each is a different but compatible standard).
Source: GS1
The introduction of barcodes has allowed products to not just be identified faster but also be identified directly from a global database without having to be re-keyed every time it changes hands. The body that manages and issues the codes, GS1, maintains a global database that manufacturers, distributors and retailers use to register the codes and refer to for information.
The benefits this system has brought to the supply chain cannot be overstated.
It has enabled a standard way to quickly call up information of products, track movement through the supply chain, speed up processes like checking out and also reduce the incidence of human error in the process chain.
Prior to barcodes, items had to be called up manually and this was a time consuming process. Its saves many thousands of hours in manpower every year (and consequently saving what may add up to significant costs). It also has made visible changes in how we shop — imagine waiting in line at a checkout with the cashier manually typing in each item for the system to call up the price. It also has made self checkouts possible — with anyone being able to scan the item in their basket.
The system is not perfect however. The chief issue is that a system created in the 1950s has struggled to keep up with the times. One of the biggest limitation is that, in trying to ensure the widest backward compatibility, the barcode has essentially changed little from its original form.
The current iteration of the UPC has a maximum of 13 numerical digits, which given the number of products available today, is inadequate to track all and every product range. This limitation also means that it is not feasible to track individual items through the system.
There is also the issue of standardisation. Given the inability for one system to meet the increasing demands of all industries, many competing types of codes have been invented to enable more data to be held in the code. One example is the QR code.
These systems however lack any form of standardisation and do not benefit from a publicly available database that allows easy tracking throughout the supply chain. It however, has shown the possibility of what once simple codes can potentially do if such a system can be created.
Thanks for reading this article. I’m Chironjit Das and I’m in charge of Community and Finance at Devery. Devery aims to solve product counterfeiting and fraud using the blockchain.
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