Efficient Inventory Management With QR Codes and a Smartphone

A Bit of History: QR Codes Were Created For Inventory Management

It may be hard to believe now, but QR Codes were originally invented not for marketing, not so that advertisers could put them on every possible product, business cards or banner.Efficient Inventory Management With QR Codes and a Smartphone They were invented specifically for inventory management. By the early 1990s, Toyota Company found out that barcode system they used to track parts was running out of capacity: the number of components the company used was about to exceed the maximum number of items they could encode in a standard barcode. Therefore, in 1994 Toyota’s subsidiary, Denso Wave invented two-dimensional graphical code system they called Quick Response, or QR code system. It was designed to allow high-speed component scanning during manufacturing process.

How QR Codes And Smartphones Help With Inventory Management

Even if you do not deal with very high numbers of components, exceeding regular barcode capacity, your inventory management process will benefit from incorporating QR Codes. Why? Because of the new part of equation – smartphones. Instead of using traditional scanners, your employees can use smartphones (that most of them have in their pockets already) to track inventory items.

It means that you no longer need to purchase scanners in order to be able to record inventory transactions efficiently and eliminate mistakes associated with the manual data entry. Even if you do not mind the cost of extra hardware, think of how much more convenient it is to use the a smartphone instead of a scanner.

Scanners need to be either physically connected to a computer, or be in close vicinity, while most inventory management operations happen in the warehouse, on the shop floor, or in the field — far from the office computer. Smartphones work in any location, can easily fit in the pocket (unlike a bulky scanner), and in fact are already in the pockets of the most of your employees. No matter how many employees in your organization handle inventory, they can record inventory transactions as they happen – and send data to the central database in real time, meaning you always have current inventory status.
These “physical” advantages – convenient shape and size, ability to work without a nearby host computer, being readily available for employees who handle inventory are only a part of the story. Smartphones are also much more “capable” than regular barcode scanners. Smartphones are not limited to reading a number from the barcode and sending it to the nearby host computer for completing the transaction. Smartphone applications can allow the person who manages inventory to identify the transaction (sale, restocking, taken for a project, etc.), and select / enter other relevant information (lot number, bin, what project the item was taken for, client, location – everything which is relevant for your small business).

QR Codes Versus UPC Bacrcodes For Smartphone Scanning

Often when people think about using smartphones for scanning inventory items, they automatically link this process to QR codes. This is not entirely correct – UPC barcodes can also be scanned with the smartphones, and smartphone application can bring all required information from the server. Of course, QR codes can include much more information – but if your inventory items are already labeled with UPC barcodes, and it is not practical to re-label them – that’s not a problem. You can still take advantage of the new technology and optimize your inventory management process by using smartphones as scanners.

Addition To Your Current Inventory Management System

If you are currently not using any inventory management system (especially if the reason for it is high cost and complexity of traditional inventory management systems), here is your opportunity to jump in. Modern inventory management software tends to be more affordable, less complex, has web-based interface, and will allow you to use QR Codes / smartphones for inventory management.

Already have an inventory management system in place? Smartphone-based scanning applications can be used as a supplement to your system. You still can give employees an opportunity to use their smartphones to record and track inventory, or look up current inventory status at any location. In this case smartphone applications can be integrated into existing inventory management software, so that all inventory transactions recorded on the smartphones go straight into your system. No matter what software you are using, it probably has an API to allow integration, and at least some vendors can do the integration for you.

Putting It All Together

What can you do to start using QR Codes / smartphones for inventory management and / or asset tracking? There are several parts to that question:

  •  A smartphone client application that can scan barcodes or QR codes and send recorded information back to the server. Notice, this is not a generic barcode scanning application. Generic apps simply show you what is encoded in a QR code. These applications can also recognize encoded urls and redirect you to a website, or recognize contact information and add it to your list of contacts. However, to handle inventory transactions, you need an application specifically designed for this purpose. This application should have a web-based back end, and/or be integrated directly into your current inventory management system.
  •  A central database where all inventory data is recorded, and web based interface that allow you to review current inventory information and run reports. Web-based parts should also allow you to generate and print QR codes for your products. Although there are plenty of sites that will allow you to generate QR codes, they won’t work well for your purpose, unless you know *exactly* what smartphone the application expects to be encoded in the QR code. Normally, the web part will work together with a smartphone application and generate QR codes that smartphone applications can read.
  •  Alternatively, smartphone applications can be integrated directly into your current inventory system via an API. In this situation, you still need an interface to generate and print QR codes, unless you plan to use regular UPC barcodes and they are already on your products, or you have a utility to generate and print them.
About Alex Heiphetz

Alex Heiphetz is a co-founder and CEO of AHG, Inc. AHG develops web and mobile applications for businesses. Our solutions connect business ERP systems and databases with web and mobile clients, and automate ordering and inventory management.