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Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

Logistics News

By Cliff Holste

October 23, 2013

Supply Chains Benefit From Adoption Of 2D Matrix Code Technology

Distribution Centers Can Easily Transition to 2D Code Format

Holste Says:

Perhaps the biggest reason for manufacturers to adopt a mobile application strategy for 2D scanning is cost savings.
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Previous Columns by Cliff Holste

Sorting It Out: Shippers Looking To Increase System Capacity Are Surprised To Find It May Already Exist!

Sorting It Out: For Shippers - Benefits Of Real-Time Control In The DC Are Huge!

Sorting It Out: Shippers Looking to Improve Operations Choose Customer Centric Approach

Sorting It Out: Productivity is a Crucial Factor in Measuring Production Performance

Sorting It Out: Packaging Construction Impacts on Logistics Operations


Ease of installation and a high cost-to-benefit ratio are driving a rapid expansion for data matrix codes throughout the supply chain. A rapidly growing number of retail packages sport them, and whole market sectors like pharmaceuticals are also making extensive use of 2D codes. As usage grows, the knowledge base for material handling system integrators will continue growing, making it easier for companies to install systems and begin reaping the benefits of data matrix coding.

Multi-Code readers (like the one pictured here from ifm efector, Inc. can identify data matrix codes in a variety of applications including dot-penned code on highly reflective metallic surfaces, and printed code on plastic wrapped containers. The camera’s smart algorithm enables the unit to read code placed in any orientation. Even partially damaged or worn codes are reliably identified.

The following byline article on this important and timely subject was provided to Distribution Digest by Donna Fritz, VP at Take Supply Chain, Inc.

“How to Switch to 2D Matrix Codes without Spending a fortune in Time and Budget”

In the past couple of years, chances are that if you have looked closely at advertising mailers, print magazines, product packaging, or even posters and fliers in public spaces, you have seen the rise and dominance of 2D barcodes using the QR (Quick Response) code format. The QR Code’s ability to store large amounts of part information in a small space was the primary advantage, and, coupled with current mobile data collection technology and the move toward social business practices, presents a compelling reason for manufacturers to make the switch from 1D to 2D barcodes.

The manufacturing sector has exhibited some reluctance to move from a 1D to 2D barcode system, primarily due to concerns about equipment costs and downtime associated with such a change, and a perceived lack of ROI for this type of investment. In this article, I’ll explain one way to create a cost-effective 2D barcode implementation strategy.

Create a Cost-Effective Implementation Strategy

Unlike the advertising and social media applications, whose only requirement is that 2D barcodes are readable by smartphones or tablets and correctly link to the web, manufacturing requirements are far more complex. Therefore, it’s a common perception that transitioning to 2D Matrix barcodes will require a cost-prohibitive investment into camera-based scanners for manufacturing use on a large scale. Fortunately, due to recent technological advances in sensors and microprocessors, camera-based scanning systems now require about the same investment as older, laser-based 1D barcode readers but come with significantly higher ROI. These scanners usually can also still be used on 1D barcodes, so if it is already in your budget to upgrade your scanners soon, there will most likely not be a cost increase.

Even if it’s not currently in your budget, the ROI is worth the investment: camera-based AutoID readers, which take a picture of the barcodes, read them in half the time as 1D laser scanners, and they are better at reading damaged codes. Moreover, because codes do not have to “line up” with camera readers, which can read codes in any direction, they are extremely cost effective due to saved labor.

New equipment optimized for 2D barcode reading in manufacturing environments is designed to integrate with a variety of ERP and supply chain management systems. Once you have found equipment options, determine the integration challenges, as well as opportunities for capturing and recording more data than before. Factor all of these into your total costs/benefits analysis.

Support a BYOD Policy for Mobile Data Collection

The rate of consumer device adoption in the workplace (a.k.a. BYOD or “Bring Your Own Device”) continues to rise. It is currently expected that by 2016, the BYOD adoption rate will be 35%. As employees using their personal smart devices for business functions becomes the new norm, companies will reduce the number of enterprise mobile devices.

If we combine these trends with the clear need to develop a strategy for 2D barcode migration, it’s not difficult to predict that the future of barcode scanning will go the way of calculators, maps, and other previously external hardware: barcode scanners will be widely available as mobile apps. This is an important consideration when determining your barcode label format and methods of printing, scanning, and transmitting data back to your ERP. Make sure the 2D barcode format chosen for your organization will be compatible with mobile devices for inventory management and package tracking: new apps for enterprise data collection continue to be released as the manufacturing sector begins to emulate the consumer market.

Perhaps the biggest reason for manufacturers to adopt a mobile application strategy for 2D scanning is cost savings. When faced with the option of either replacing expensive hardware to support 2D barcode scanning, or implementing a BYOD policy and using smartphone-based apps, companies have the incentive of lowering total cost of ownership – in some cases by more than 70% – when they choose the latter.

It’s clear that 2D barcodes are the way of the near future for mobile data collection in a variety of manufacturing environments. Thanks to the recent ascendance of social business combined with mobility, the consumer marketing implementation of 2D barcodes has paved the way for adoption in industrial applications. This is especially significant as employees bring their personal devices for use in the workplace and as business becomes more mobile, social, customer-focused, and connected.

Final Thoughts

Given the huge amount of information that can be imbedded in a 2D date matrix code it is conceivable that one of these codes could replace several 1D bar codes, e.g., UPC, SKU, Shipping Container Code, along with other customer specific labels that are currently being applied in the DC. This will enable DCs to receive, store, pick, provide VAS, and ship package containers from the data contained on one small 2D code.

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