What is the 80/20 Inventory Management Rule?
The 80/20 inventory rule states that 80% of your profits come from 20% of your inventory. But, how do you take advantage of this information?

Barcode inventory control for manufacturers is essential for certain industries. Discover barcode scanning, the benefits, and how to implement.
If you’re a manufacturer reaching the stage where relying on pointing your finger at your inventory and counting becomes a not-so-reliable strategy, it might be time to consider beefing up your inventory management tactics.
Introducing barcode inventory control for manufacturers, the quickest and most reliable way of monitoring your inventory movements.
Without barcodes, you’re at risk of miscalculating your stock and going into negative inventory or losing track of the expiration date of your items, which can have serious consequences for your business.
That’s why, in this article, we’re going to explore barcode management, the benefits, and how to implement them.
Get a head start with cloud manufacturing software. Taking these tips and implementing them alongside a real-time manufacturing system will help you take your business to the next level. Try for yourself with the 14-day free trial.
Barcodes are a method of visually representing data in a machine-readable form to quickly identify items and track inventory.
However, barcode inventory control isn’t just for tracking products, it also allows you to implement them:
Traditionally, a barcode came in the form of a square or rectangular print containing a series of vertical and parallel black lines and white spaces of different widths, which, once scanned, translates and relays information to the user.
Barcodes come in two different forms:
But what exactly is the difference between the popular choices of these two types of barcodes?
The international barcode standard for retail products. The code can be registered with GS1 (Global standard organization). GS1 assigns a dedicated company code that will be globally recognized.
This is mostly used on goods that a company is selling – in order to get a unique barcode for a specific item. GS1 will make sure the company code is unique and all the products can be traced back to their origin.
This code can hold more numbers. CS1 128 can also be registered with GS1, but the applications are broader for this code type. CODE 128 is widely used when items, processes, or activities are tracked internally, and its uniqueness is essential.
Here are just some of the examples in which these codes can be used:
In these cases, the barcode numbers should be generated so that they are always unique throughout the company – that’s why it’s important to find an MRP software that can perform this task.
Data Matrix and QR code – these are the most common 2D barcode types.
2D barcodes can hold far more information than 1D barcodes. For example, if there is a need to direct a user to a specific URL to see a Document or share contact details in a machine-readable way, then these are the best options.
In general, 1D codes can be considered the better choice when identifying something and 2D barcodes are better at sharing information.
Scanning a 1D code is usually considered faster, though the technology is catching up fast for 2D codes as well. The benefit of 2D codes is that all modern smartphones have built-in functionality in their camera app to recognize QR codes.
Now you know everything about barcodes, so much so you can probably hear your own heartbeat, and it sounds like the beep of items being scanned at your favorite store.
So, let’s get to the exciting parts, the benefits of implementing barcode inventory control.
When you start taking advantage of barcodes, you can expect to find:
At the end of the day, using barcodes to process data is going to be far more accurate than inventory data entered manually.
As awesome as humans can get, we all make mistakes.
A typo here, or any other type of error there.
Barcodes remove the chance for human error and even reduces the need for training new staff since when taking inventory, all they need to do is point and click.
This ties in with the previous point, computers tend to have the edge on us when it comes to speedily reading and storing information.
Using barcodes for inventory control, you can take advantage of data being immediately available, including:
NOTE: Be careful that you label items correctly and be sure to check for duplicate barcodes, as this benefit can quickly become an issue the longer the mistake goes undetected.
Barcode scanning tracks inventory yields at a more accurate count, as well as improved calculations of inventory turnover rates. With a better understanding of your inventory turnover, you can hold less inventory and reduce carrying costs.
Once you’ve installed your barcode system, you can start generating barcodes immediately. Once you’ve taken the time to apply your barcodes to items, you can start monitoring your savings and reap the benefits.
Barcodes for inventory control allow you to keep your data up-to-date and error-free. Having the valuable information to hand allows you to accurately forecast demand and make better decisions in regards to your procurement, maintenance, and budgeting policies.
Maybe barcode inventory management might seem too ambitious if you’re a manufacturer that isn’t handling 100’s and 100’s of items.
Thankfully, you can still take advantage of barcode technology, and at relatively low costs too.
This is how to implement a barcode system for inventory using an Excel spreadsheet:
Open Excel and set up the first cell (A1) with “Inventory” or “Items” to begin the set-up, press enter to move to the next black cell.
Plug your barcode scanner for inventory control into your computer, smartphone, or tablet, and scan one of your items.
The blank cell should now be populated with the barcode number and the spreadsheet cursor should drop down to the next cell.
NOTE: If the cursor doesn’t move automatically, be sure to check your scanner’s documentation to see how you can fix this. Otherwise, you’ll manually need to press enter on your keyboard to select the next empty cell.
Simply continue to scan all your items into the document for automated inventory tracking.
NOTE: From here, you can now begin to use the built-in functions of Excel to:
However, this method isn’t foolproof, and the inefficiencies of using spreadsheets can still become apparent even why using a scanner, mostly because of the spreadsheet’s limitations.
It’s great for performing audits on your inventory levels, but that’s about it.
Now you know all you need to know about the exciting world of barcodes next is knowing what you need to do to implement inventory control with barcode scanners.
Here are five tips to get you started:
Here are four reasons why manufacturers use barcodes:
Security – Barcodes for your high-value items with long-term investments and need extra vigilance. Usually, this type of equipment should have labels that can’t be easily taken off. For example, tamper-evident labels.
Mobility – If your items require frequent checkouts at different locations and have a chance of getting misplaced. With these barcodes, it’s best to have identical assets for backup, for example, two-part asset labels.
Durability – Bigger items, such as office furniture, stuff that is more likely to be moved around and cleaned. Then sturdier laminated asset labels to withstand the wear and tear is what you’ll need. For example, polyester asset labels.
Adhesion – Items that are rugged or have uneven surfaces, such as rugged mechanical equipment, will need labels that can adhere to the surface. For example, foil barcode labels.
Introducing a barcode system for inventory control allows you to comply with industry regulations.
It’s important, and a legal requirement, to figure out which government regulations to avoid potential lawsuits.
When using a barcode scanner for inventory control, you’re going to need to determine what information the barcode should reveal.
However, what’s most important is the barcode’s uniqueness. Barcodes are IDs, and ultimately you’ll want the barcode scanning system to tell you information such as:
Though, it’s essentially endless how much the database can tell you about an ID.
So, you’ve done all this hard work on your barcode system for inventory control, and then you get the barcode printed onto the relevant items. Then you realize that the barcode is obstructed or damaged from where you place it.
Putting the barcode in the perfect spot is essential. Otherwise, if you mess this stage up your entire barcode inventory control system comes tumbling down.
As a scaling manufacturer, you’re going to be managing all different types of software to help you keep on top of your business, from manufacturing to marketing.
This is why it’s important to find a barcode inventory control system for your business that can integrate with all your other software to integrate your inventory management with your entire workflow.
For example, Smart Manufacturing Software is a powerful cloud-based ERP system that comes equipped with barcode scanning and allows you to integrate your other business systems.
Before we look into the scanner aspect of barcode inventory control, how exactly does the barcode scanner work?
When you aim and click your scanner at the barcode, the sensor within the scanner detects reflected light from that little red light you see and generates an analog signal for decoding.
This is then translated by the decoder, is validated by the check digit is correct, and then coverts that data into text.
That text then appears on your computer software and displays the information you decided should be represented by the barcode.
Scanner’s work very much like a keyboard hooked up to your PC. But, instead of using keys, your scanner is going to be what helps you input data into the computer.
So, you’ve got your barcodes set up, it’s time to pick a scanner for your barcode inventory control.
Here are 5 tips to help you choose a barcode scanner for your business:
Look into your shop floor manufacturing… Flooring…
What this means is that if you opted for a cheap plastic scanner, if you were to drop it on your factory floor or in the warehouse, would it survive the fall?
Manufacturers should consider purchasing rugged barcode scanners to avoid the risk of damaging the scanner when transporting it across your business.
Do you have a dusty warehouse? Or is your workshop covered in sawdust or any other particles from your machinery?
You’ll want to look into the Ingress Protection (IP) rating of the scanners you shortlist, as this will indicate if the device will be able to survive extreme elements such as being covered in dust or submerged in water.
Instinctively, you’d think that if you have a low level of lighting – possibly to protect light-sensitive material – it may interfere with your scanner.
However, the scanner works by reflecting the light from the barcode and analyzing the light and dark spots of the barcode. The issue is actually if you have bright lighting or sunlight that drenches your items.
It’s important to be sure that the scanner is going to work under your business’s lighting condition.
If your operators will be wearing gloves while on the floor and using the barcode scanner, then you should find a scanner that can accommodate these conditions, such as having larger keys, so it’s easier to use the scanner.
Will you be scanning barcodes from a distance or up close? If it’s from a distance, you’ll need to look into scanners with Advanced Long Range or Extended Range capabilities.
On top of that, if you’re using 1D or 2D barcodes you’ll need to consider if you’ll need to use laser scanners or even if the camera on your smart devices is enough.
When you start the hunt for a barcode inventory control system for your business, you can use software comparison sights such as Capterra or Software Advice to see what other manufacturers in your industry are using.
However, when compiling your shortlist for choosing software and scanners, be sure to follow this checklist to give you a head start:
By following this, you’ll be surely on the right path to finding the perfect barcode inventory control system.
But, how about we help you get started on this journey?
Katana Smart Manufacturing Software is a scalable manufacturing software for those starting to grow or larger manufacturers with warehouses and factories spread all over.
Katana supports a wide range of manufacturing processes and workflows and even comes with barcode scanning capabilities.
With Katana, you can improve your inventory management processes for handling raw materials and batches by:
Katana’s feature allows users to use barcode scanners for inventory control to help you and your employees easily keep up with your inventory methods, such as ABC inventory, and perform those inventory tracking responsibilities quicker, reduce the chance for errors, and identify materials and items easier.
Barcode inventory control is perfect for any manufacturer who works with:
You can learn more about Katana barcode inventory management by checking out the video below:
But Katana doesn’t stop there, it also gives you access to monitoring manufacturing with the MRP dashboard, more control over the floor level with shop floor scheduling, and our API to customize your own integrations.
Don’t just take our word for it, see for yourself.
Katana offers a 14-day free trial, so you can see firsthand the benefits to be reaped with Smart Manufacturing Software and barcode inventory control.
And that’s it for now. We hope you found this article useful, and if you have questions and barcode inventory control with Katana, please don’t hesitate to .
And until next time, happy scanning.