Barcodes: The Handy Road Signs of Global Supply Chains

By Dr. William Oliver Hedgepeth
Faculty Member, Transportation and Logistics Management, American Public University

The definition of barcodes varies depending on the source you consult. The Merriam-Webster dictionary defines the barcode as “a code consisting of a group of printed and variously patterned bars and spaces and sometimes numerals that is designed to be scanned and read into computer memory and that contains information (such as identification) about the object it labels.”

Another source, OnlineLabels.com, defines a barcode as “a set of parallel lines atop a series of numbers, letters, and/or characters. It stores information in a form of visual data. Machines then decipher the data and use it to complete a task, like track or catalog an item. Different types of barcodes have emerged for a variety of niche uses.”

Barcodes First Appeared in the 1970s

The Universal Product Code (UPC) was the initial barcode label used by retail and wholesale businesses to track packaged items. According to The Balance Small Business site, the first item to be marked with a barcode was a “package of Juicy Fruit chewing gum…on June 26, 1974 at Marsh’s supermarket in Troy, Ohio.”

The adoption of barcodes for almost everything we purchase was a slow process, just like the introduction of computers in retail business and the Internet in businesses, the military and academia. Today, the barcode is an integral part of our society and the key to how business data is collected and managed.

As businesses adopted computers and better communications systems, barcodes became part of the supply chain. Products and their packages moving through manufacturing centers, warehouses, distribution centers, and retail businesses gave supply chain managers the opportunity to see far beyond the loading dock.

Types of Barcodes Used Today

The standard barcodes of lines and spaces are the 12-digit barcodes called UPC-As. They identify a product, its cost and a host of other possible package handling options. For instance, the barcode may indicate whether or not a product should be kept frozen or if the product is returned/damaged goods.

But there are other types of barcodes, too. Some barcodes only have eight digits and are called UPC-E barcodes. The UPC-E is used for small retail items, such as a kid’s toy, where a smaller-size barcode is needed.

Other barcodes may be in the form of a European Article Number (EAN), which can be eight or 13 digits. The extra digit in the 13-digit version of the EAN represents a country code for areas such as Europe, Asia and Australia.

The use of multiple barcodes varies. I have witnessed inbound deliveries of boxes of clothing from China that had six different barcodes on them.

Barcodes for Forward Logistics

All products in the supply chain, from raw materials to those you purchase at your local store, are controlled by barcodes. When you buy something, the cashier scans the barcode. The price pops up the price and you pay with your credit card.

However, barcodes can also provide information for warehouse and supply chain managers or others involved in the movement of goods, information and data. For instance, barcodes may indicate how products should be stored and handled.

In the forward logistics world of the supply chain, there are at least seven different types of barcodes:

• Code 39
• UPC-A
• EAN-13
• EAN-8
• Code 128
• QR Code
• Datamatrix

Barcodes can also come in different shapes and colors. For instance, they are not required to be a block of white and black lines. Also, barcodes can be designed in various shapes to represent the company’s product or in a color associated with a company’s marketing strategy to increase sales.

Barcode Errors

In the forward logistics world, barcodes have great value for inventory management, but can sometimes create problems. In 2005, for instance, there were reports of mislabeled barcodes for patient specimen testing. In 2016, Hospira Inc. had to recall a supply of pharmaceutical magnesium sulfate due to barcode mislabeling.

According to a 2009 Patient Safety and Quality Healthcare article, incorrect barcode use in hospitals was a problem. Barcodes identify patients as well as what medicines they require.

A mislabel happened in 2018 at a New York seafood market, with barcodes incorrectly identifying the type of fish being sold. According to Dan Nosowitz of Modern Farmer, “14 out of 16 lemon sole samples were mislabeled, and 31 out of 46 red snapper samples. Cheaper, similar fish were often substituted, like flounder instead of lemon sole, or even rainbow trout instead of wild salmon.”

In some cases, supermarkets were selling mislabeled fish with up to 50% of the wrong barcodes. The problems with these barcodes can be attributed to human error.

The problem of erroneous barcodes is being investigated by the federal government and by some universities. Penn State Food Safety regularly reports on barcode errors. For instance, the August 2018 report described barcode errors at Star Natural Meats, LLC. About 20,000 pounds of raw pork sausage contained some allergens that were not on the product label.

It is likely that we will continue to see errors involving barcodes in 2019. For instance, foods containing genetically modified organisms (GMOs) may suffer mislabeling problems. Gluten-free products need to be properly coded to prevent mislabeling for those persons allergic to gluten.

Barcodes Need to Be Read Correctly by Barcode Readers

There are barcode problems related to the machines that read them. For instance, a barcode has to be held in the right position, so that it is read correctly by a handheld or stationary scanner. It has to do with the angle of the barcode facing the reader.

Multiple barcodes on a package also create problems. What if somewhere in the supply chain, a mislabeled barcode is on a package? You might receive the wrong product.

There are many reasons why a barcode fails. A barcode could be placed on a product that has a curved edge, which causes some of the lines and spaces to not align properly. Sometimes, a barcode on a package with a shiny glass or metal surface creates a glare that interferes with the scanner’s ability to read it. Other reasons for barcode failure include insufficient ink or tears in the paper.

A Barcode Is Not Popular at All Companies

While barcodes have been helpful for tracking boxes or goods through the forward logistics supply chain, not everyone uses them. According to SmallBizTrends, about 30% of small businesses use pen and paper for managing their inventory.

Barcodes and Their Use in Reverse Logistics

When you return a purchase to a retail store, the process of reverse logistics kicks in. Your money is returned to you or you receive a replacement product that meets your expectations.

But for the returned product, there are several possible outcomes:

• That product can be replaced by the next shipment in the inbound supply chain.
• It might be repaired by some other company or person in the same supply chain.
• A new supply chain involving that product opens up.
• The product is recycled and separated into individual components. These components will be sold as raw materials for manufacturing a similar or different product.
• The product is refurbished and put on sale for a discount in the store or is sold to a used-goods store.
• The product is sent to the trash dump to be buried in a pile of other garbage. It then becomes a possible part of the hazardous waste problem. Today, this option is becoming a problem with trash that is no longer sellable to manufacturing companies or countries, such as China’s refusal to accept further shipments of U.S. plastic waste.

Reverse logistics can be a twilight zone of where products are in a business inventory. According to the Reverse Logistics Association, “Reverse logistics represents one of the largest and most overlooked opportunities to help return profits to a company. However, very few companies are doing a good job in addressing this issue.” It seems that there is a need for special barcodes in reverse logistics.

About the Author

Dr. Oliver Hedgepeth is a full-time professor at American Public University (APU). He was program director of three academic programs: Reverse Logistics Management, Transportation and Logistics Management and Government Contracting. He was Chair of the Logistics Department at the University of Alaska Anchorage. Dr. Hedgepeth was the founding Director of the Army’s Artificial Intelligence Center for Logistics.