How Do Barcodes Work?

How do barcodes work? What role do they play in asset tracking and inventory management? It’s hard to believe that barcodes have been around less than 45 years, given the fact that they’re almost everywhere you look today.

What is a Barcode?

Invention of Barcodes/History

On June 26, 1974, the very first Universal Product Code (UPC) passed across the checkout at Troy’s Marsh Supermarket in Troy, Ohio. Printed on a 10-pack of Wrigley’s Juicy Fruit Gum, the UPC registered on an optical scanner and rang up the purchase: 67 cents. It was anything but a small transaction.

Alan Haberman is the man credited with the familiar black-and-white graphic we know as the barcode, but it was actually inventor Joe Woodland who first drew the pattern of a barcode in the sand with his fingers. Woodland was a graduate of Drexel Institute of Technology in Philadelphia, a school whose dean had recently been challenged with the task of devising a system to get shopper through grocery stores more quickly. The dean at Drexel didn’t pay much attention to the challenge, but a Drexel student named Bernard “Bob” Silver did. He teamed up with Woodland to come up with a solution. The men received a patent in 1952 but weren’t able to move their invention much further because it required technology that simply wasn’t available then. During the remainder of the 1950s and 1960s, several manufacturing and retail companies tried to implement their own product coding systems. The only problem was that each company had its own unique system, and the systems couldn’t “talk” to one another. Grocery manufacturing companies needed one universal system for product codes; otherwise, they’d have to abide by one set of rules for one grocery chain, another set of rules for another chain, and so forth. The challenge was on to devise a universal system.

Haberman would, in fact, be in charge of the industry committee that ultimately chose a barcode, created by George Laurer of I.B.M., over other possible solutions, including bull’s-eyes, circles and various patterns of dots.

The impact of the UPC can’t be underemphasized. A 2011 New York Times profile of Alan Haberman upon his death at age 81 provided an astounding statistic from GS1 US, the nonprofit organization that issues and administers UPCs. Each day, more than 5 billion UPCs are scanned in retail establishments worldwide. The original UPCs had 11 digits, while today’s UPCs have 12. A PricewaterhouseCoopers study several years ago found that UPCs save the supermarket and mass-merchandise sectors $30 billion per year.

So How Do Barcodes Work, Anyway?

After a barcode is generated, a scanner translates it into a line of text.

1D Barcodes

The first barcodes were 1D, or one-dimensional; they carried information in one direction only and stored small amounts of data. As digital technology continued to evolve and grow in complexity, however, barcodes needed to carry more data. Stacked barcodes did just that – they stacked 1D codes on top of one another in order to store more data, but they were difficult to read.

2D Barcodes: How They’re Generated and Printed

2D Barcodes, which can be generated online through various websites (note: If you’re seeking a UPC, you’ll need a GS1 Company Prefix), can include significantly more data than 1D codes – hundreds of times more data, in fact – and are read both vertically and horizontally. They also require a more powerful scanner than do 1D barcodes. QR codes are probably the most recognized form of 2D barcodes, although many formats are available. 2D barcodes have many additional advantages: They can be read by your smartphone or tablet, tend to contain fewer errors, may be read at higher speeds, can be forwarded via text message, and may be encrypted for security. Thanks to advancements in technology, today, you can print your barcode labels from home or use a service, depending upon your preference.

3D Barcodes: How They’re Generated and Printed, Differences and Applications

3D barcodes are the next evolution of barcodes. Manufacturers need to track their inventory and parts, but traditional barcode labels are subject to environmental extremes, like high temperatures and potentially corrosive chemicals. 3D barcodes are embossed onto products and scanned, therefore eliminating the challenges associated with labels. Scanners may either be handheld or built into the assembly line.

How do Barcode Scanners Work?

With 2D vs 3D Barcodes

Both 2D and 3D barcodes may be read with a smartphone. Although 2D barcodes do allow for some error correction in the event a barcode label has been damaged, they can’t withstand temperature extremes, harsh chemicals and other environmental challenges that necessitate the need for 3D barcodes. 3D barcodes are read based on the height of the embossment, versus the ratio of black to white, as is the case with 2D barcodes.

Asset Tracking and Management Using Barcodes and Mobile Scanners

Today, it’s easier than ever to generate barcodes and track and manage your assets and inventory, efficiently and accurately. With Asset Panda, it’s as simple as downloading our free iOS or Android app, which syncs with the cloud and includes a mobile barcode scanner, eliminating the need for a separate (and expensive) handheld scanner. The app also includes a QR code generator. Visit our online store,, and order barcode labels or tags built for durability and reliability. Using Asset Panda’s cloud-based software, you can track and manage the exact location, condition, quantity, and value of your assets and inventory, and keep every one of your stakeholders in the loop for maximum accountability.

Try Asset Panda free for 14 days, and learn how you can save time and money with this incredibly powerful, customizable and intuitive mobile platform. To learn more, visit



Courtney Roush

Courtney Roush is a freelance writer, editor, and communications strategist with 25 years of experience. Her favorite discipline is crisis communications – and it’s a highly relevant one in our present times.

See Asset Panda in action

Our FREE demo will show how we can transform your asset management system