Barcode: How It Works, Uses, Advantages and Disadvantages

Ilaha Mammadova

Mar 15, 2024

6 min read


A barcode is a visual representation of information using lines that differ in measurement from one another. Barcodes are used for various purposes, including inventory management, tracking, invoicing, shipping, and mail. There are two main types of a barcode, including one-dimensional (1D) and two-dimensional (2D). The main differences between a barcode and a QR code are scanner limitation, resolution, one-line sight of reading, data storage capacity, appearance, and type of information decoded. 

There are 5 advantages of using barcodes, including cost-effectiveness, accuracy, speed, convenience, and inventory management. There are 4 disadvantages of barcodes, including limited data storage, one line of sight reading, damaged barcode problems, and particular scanner dependency.

Different types of barcodes store different types of data, and the number of symbols varies as well. The numbers on barcodes represent the information contained within them. Prices, weights, manufacturing dates, last usage dates, and manufacturers' names are included in barcodes. Creating a barcoding system is not a complex process and is cost-effective for delivering information. A barcode for products is created in just a few steps and scanned using a barcode scanner.

What is a Barcode?

A barcode is a visual representation of information using lines that differ in measurement from one another. Barcode lines store various numbers and characters. There are both one-dimensional (1D) and two-dimensional (2D) barcodes. Barcode scanners read barcodes, sending the scanned information to a computer system, and a computer system or database extracts the information for use. 

It is utilized for various purposes based on the contained data. Barcodes are used by retail, manufacturing, logistics, and healthcare sectors for purposes like inventory management, pricing, product authentication, and many more. Barcodes on supermarket products are a simple example of barcoding systems.

History of the Barcode

The barcode was invented in 1948 by Norman J. Woodland and Bernard Silver. Norman J. Woodland and Bernard Silver patented it in the US in 1952. The desire to create barcodes arose from problems in the supermarket industry, particularly regarding inventory management. A barcode was developed as a solution to the issue.

How Do Barcodes Work?

Barcodes work by encoding data within them and scanning it using a special barcode scanner. A barcode image is created by visually placing numbers and characters within different-sized lines, and the generated barcode image is printed on the necessary item. A barcode scanner emits light onto the barcode using a laser. The dark lines absorb the light, while the white spaces reflect it. 

The barcode scanner captures the reflected light. The amount of light reflected is determined, which later translates into information. The scanner decodes the information through the lights processed by the sensor. The decoded information is sent to the computer system and, after extraction, is used for various purposes.

What Do the Numbers on a Barcode Mean?

The numbers on a barcode mean the information within it. The numbers reflected in the UPC barcode serve as an example of the most common barcode type. The barcode contains a 12-digit number, and the numbers represent different information. The first six digits on the barcode indicate the manufacturer's identification number.

 The label identifies the company that owns the product. The following five digits on the barcode indicate the product number, which helps identify products. The last digit on the barcode is the check digit, indicating whether the barcode has been scanned correctly, and the digit helps prevent errors when entering information.

What are Barcodes Used for?Uses of barcodes

Barcodes are used for various purposes, including inventory management, tracking, invoicing, shipping, and mail. Barcodes simplify and streamline the inventory barcode system. Barcodes are highly effective for asset and package tracking and allow easy tracking regardless of the location. Barcodes help monitor where the asset is, its condition, and all essential details during asset tracking. Barcodes are used in the invoicing process by companies on the invoices to track accounts payable and accounts receivable information and are utilized for mail tracking, similar to package tracking.

Barcode Inventory Management

Barcodes play a crucial role in inventory management. All significant data for inventory is placed and managed within barcodes. Barcodes ensure that essential information is not manually entered and enable real-time tracking. The primary role of an inventory barcode system is to ensure rapid identification and tracking of a product from its initial to its final stage, which is critical for managing stock levels. Frequent and accurate barcode inventory control is made feasible by scanning them.

Asset Tracking

Various sectors, such as businesses, schools, and hospitals, use barcodes to track assets, including equipment, valuable items, etc. Barcodes are used on the assets, displaying all essential details and allowing easy tracking. The asset's location is easily determined, and accurate records are maintained. Each asset has its own barcode containing important information such as history, depreciation details, and purchase date. A barcode scanning system allows for auditing the asset, determining its location, and preventing potential theft with barcode security.

Package Tracking

Barcodes are used for package tracking during transportation. Each package has a unique barcode, enabling the tracking of the product throughout its journey by a barcode scanning system. Barcode tracking is excellent technology as it ensures tracking of the product through all processes from the initial to the final destination. Barcodes help quickly sort and identify products, especially in logistics, where imagining packaging tracking without barcodes is difficult.


Many companies use a barcoding system for invoicing. Companies place barcodes on invoices to track accounts payable and accounts receivable information. Scanning the barcode for products helps determine whether it's correctly accounted for when customers make payments. Placing information on the invoice, such as where the product is located, and scanning it during check ensures that manual errors are avoided.


Barcodes are the most commonly used technology in all shipping processes. Each barcode contains appropriate information about the product; then, it is placed on the product itself. It allows for barcode tracking of the product throughout the shipping process, aiding in sorting and identification. Barcodes facilitate the shipping process, making it efficient and swift.


Barcodes are significant in mail services, including delivery and mail sorting. Barcodes are used at every step for easy tracking of mail. The barcode technology tracks mail from the initial address to the final destination. Barcodes expedite the sorting process, which in turn speeds up delivery.

Types of BarcodesTypes of Barcodes

There are two main types of barcodes, including one-dimensional (1D) and two-dimensional (2D). However, barcodes are further divided into several types among themselves. The 1D barcode types include UPC, EAN, CODE 39, CODE 128, ITF, and CODE 93. The 2D barcode types include Codabar, Databar, MS1 Plessey, Data Matrix, PDF 417, Aztec, and QR code. 

It is feasible to display the types as a barcode example. The types differ in the capabilities and limitations they offer. 1D barcodes are linear barcodes and encode information in a single direction. However, 2D barcodes encode information in both horizontal and vertical directions. Therefore, 2D barcodes store more data and retain scanning capability even if damaged.

1D (One-Dimensional) Barcode

1D barcodes are one of the different types of barcodes that encode information in a single direction and store less data; hence, they are known as linear barcodes. The 6 types of 1D barcodes are listed below.

  • Universal Product Code (UPC): UPC is the most common barcode type that labels consumer goods and facilitates product tracking from manufacturing to distribution, making inventory tracking easier in stores and warehouses. It has two variations: UPC A, which encodes 12 digits, and UPC E, which encodes only 6 digits.
  • European Article Number (EAN): EAN barcodes are mainly used in the European retail industry. EAN 13 is a high-density barcode capable of encoding large amounts of data, while EAN 8 is used for smaller products. EAN barcodes are commonly used in libraries, universities, and wholesale distributors.
  • CODE 39: Code 39 encodes uppercase letters, numbers, and special characters. Code 39 labels are used in the automotive, military, electronics, and healthcare sectors. It encodes alphanumeric characters but is inefficient for small products due to its size.
  • CODE 128: Code 128 is used in transportation and logistics to identify shipped or packaged items. Its high data density allows it to encode large amounts of data efficiently.
  • ITF: ITF barcodes are specifically used for labeling shrink-wrapped cartons. ITF encodes only numbers and codes in pairs. It is utilized in warehouses, distribution, and manufacturing and has higher data density.
  • CODE 93: Code 93 is utilized in automotive, retail, logistics, and various fields as a more compact version of Code 39. It retains high data density while occupying less space compared to Code 39.

2D (2-Dimensional) Barcode Types

2D barcode is one of the different types of barcode that encode information horizontally and vertically, storing more data. The 7 types of 2D barcodes are listed below.

  • Codabar: Codabar is one of the 2D barcode types that encodes numbers and some symbols, including 16 characters. It is widely used in logistics, healthcare, and education sectors. It is easy to print Codabar on even the cheapest printer. Codabar has a self-checking feature that helps prevent the inclusion of incorrect information.
  • GSI Databar: GSI Databar is one of the 2D barcode types that encodes a 14-digit data stream. It is used in healthcare, retail sales, and particularly for labeling fresh and quickly perishable items. The information encoded includes the product's weight, batch number, and expiration date. GSI Databar has a high data density.
  1. MS1 Plessey: MSI Plessey is one of the 2D barcode types that only encode numbers. It is used for managing inventories in retail environments, especially for labeling supermarket shelves. MSI Plessey is used in warehouses for precise inventory checks. The barcode encodes numbers from 0 to 9 without a fixed length.
  • Data Matrix: Data Matrix is one of the 2D barcode types that comes in square or rectangular shapes. Data Matrix is commonly used on small products and is capable of being scanned even when damaged. It has high data density and occupies less space, storing more than 3000 symbols in a small area. Data Matrix finds significant usage, especially in the healthcare industry.
  • PDF 417: PDF 417 is one of the 2D barcode types that encodes large data. A PDF 417 file stores more than 1.1 kilobytes of data, four times larger than many 2D codes. It is used in transportation, ticket sales, driving licenses, visas, and other identification documents.
  • Aztec: Aztec is one of the 2D barcode types that takes up less space. Aztec barcodes are used, especially on tickets in the transportation sector. Aztec codes require no quiet zone, occupy less space, and store extensive data in a smaller size.
  • QR Code: QR code is one of the 2D barcode types that accommodates various types of information. QR codes are widely used in marketing materials, campaigns, website links, business cards, etc. QR codes are scanned with a phone camera, directing users to the embedded information. QR codes differ from others due to high scanning capability, even if damaged.

What's the Main Difference Between a Barcode and a QR Code?

The main differences between a barcode and a QR code are scanner limitation, resolution, direction, data storage capacity, appearance, and type of information decoded. The 6 main differences between a barcode and a QR code are listed below.

  • Scanner Limitation: Barcodes require specific scanners, while QR codes are easily and swiftly scanned using a regular phone camera; that is the main difference between a barcode and a QR code.
  • Resolution: Barcodes are comparatively lower in resolution than QR codes, while QR codes possess error correction levels, enabling QR codes to be scanned even if damaged.
  • Direction: Barcodes are read in only one direction, whereas QR codes are read from all directions.
  • Data Storage Capacity: Barcodes encode information with fewer symbols and store less data, while QR codes have a higher data storage capacity.
  • Appearance: Barcodes consist of vertical lines and space, while QR codes are black squares arranged on a white background and store information vertically and horizontally.
  • Type of Information Encoded: Barcodes primarily contain product information, while QR codes store various information and are used across different sectors.

Which is an Advantage of Using Barcodes?The advantages and disadvantages of Using Barcodes?

The 4 advantages of using barcodes are listed below.

  • Cost-effectiveness: Barcodes are cost-effective due to the affordable production and printing costs. It allows companies to use a personal barcode for every product within budgets.
  • Accuracy: Barcodes eliminate manual entry errors, ensuring more precise data representation than handwritten information.
  • Speed: Barcodes are created, printed, and scanned swiftly, transferring information within a short duration.
  • Convenience: Barcodes are easily created and scanned using a barcode scanner without requiring specialized advanced tools.

What are the Disadvantages of Barcodes?

The 4 disadvantages of barcodes are listed below.

  • Limited Data Storage: Barcodes have limited data capacity and only store a few symbols, limiting the information barcodes contain.
  • One Line of Sight Reading: Barcodes encode and scan information in a unidirectional manner and lack the ability to be encoded or read both vertically and horizontally.
  • Damaged Barcode Problems: Barcodes are not scanned properly with minor damage by barcode scanners, leading to scanning issues if a barcode for products is damaged.
  • Special Scanner Dependency: Barcodes are not scanned using a regular phone camera and require specialized barcode scanners for scanning.

What information is stored on a barcode?

Product information such as price, weight, manufacturing date, last usage date, and manufacturer's name are stored on a barcode. However, the information varies depending on the type of barcode. Different barcode types store different amounts and types of information. 1D barcode encodes information ranging from 8 to 25 characters. The size of a 1D barcode increases as the number of characters it contains increases.

 The characters typically include details regarding the product, company identification, and pricing. 2D barcodes encode between 1 and 2000 characters, signifying a higher capacity for information. 2D barcodes encode the details encompass the information found in 1D barcodes and include inventory tracking, sales registries, supply chain management, mobile marketing, and logistics data.

How to Get a Barcode for a Product

To get a barcode for a product, select a specific type of barcode, obtain a company prefix from GSI, and generate the barcode for products using a generator designed for barcode creation. Firstly, the barcode type must be chosen based on the purpose of creating it among the available barcode types. 

Secondly, acquiring a company prefix from GSI, the global organization governing barcode standards, is essential. It helps identify products through the prefix. Thirdly, assigning unique numbers to each product becomes crucial as it distinguishes one product from another with barcoding systems. Finally, the barcode is created using a generator and utilized according to the appropriate sector's needs or specifications.

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