Types of Electronic Inventory Systems

by Bryan Richards; Updated September 26, 2017
Barcodes are a common type of electronic inventory management.

Inventory management is an extremely important part of a businesses operation. Maintaining and storing inventory can be extremely costly and companies that have learned to efficiently manage their inventory have gained a distinct advantage over competitors. While inventory was once managed in ledger books and kept track of by hand, modern techniques use electronics to direct, monitor and count inventory throughout the supply chain.

Barcodes

Barcodes are probably the first thing that pops into most people's minds when they think of electronic inventory management. The most common version of the barcode is the UPC barcode. Barcodes work by using a series of lines of alternating widths to represent numbers. These lines, or bars, are read by a scanner and contain information about the product which can then be transferred to a computer system. For example, when items are scanned at a grocery store, the store's inventory can be adjusted to account for items leaving the store. This can alert the store manager when to replace inventory or provide a picture of what items are selling faster than others.

RFID

RFID stands for Radio Frequency Identification. RFID involves placing a small radio chip in inventory items. This can be either an individual unit for later sale or an entire pallet or truckload of items. The chips send out a weak radio signal that can be picked up by workers walking within a few feet of the chip. This allows an employee to scan potentially hundreds, thousands or more items with a quick walk through a warehouse. One criticism of RFID technology is the cost of the individual chips, which, when used on low-margin products, can be cost prohibitive. As the technology improves, however, most analysts expect the cost per RFID to fall considerably.

Bokode

One of the newest items in the world of inventory management technology is known as a bokode, a slight play on the word "barcode." Bokodes can read thousands of times the information as barcode readers and can be read by digital cameras, most interestingly cellphone cameras. Bokodes were developed by MIT and are made of an LED with a small lens. It is the light emanating from the LED that actually contains the information contained on the chip

About the Author

Bryan Richards has been writing since 2002. His work has appeared in the "Eau Claire Leader Telegram," the "Wisconsin State Journal" and "Small Business Opportunities." His areas of expertise include business and legal topics. Richards graduated from the University of Wisconsin School of Journalism where he also majored in economics and political science. He is currently a JD/MBA student at the University of Minnesota.

Photo Credits

  • Maria Toutoudaki/Photodisc/Getty Images