Barcode & RFID Applications for Inventory Management

This blog post outlines the required steps to maintain traceability across the supply chains using Barcode & RFIDs in combination with SAP offerings.


Maintaining traceability across the supply chain is critical. In any industry, having precise and real-time information on materials is vital. It provides visibility of the material throughout the supply chain: where it is located and in what state (raw, in-process, or finished). Businesses can maintain lean inventories and ensure items deliver on time with this information. Lean-stock reduces storage space and labor costs, improves asset usage through serialization and batch management, enhances inventory turns, and allows for faster billing cycles, all of which help to improve cash flow. Barcode or RFID can strengthen traceability.

Overall processes and places where the impact can be felt end-to-end can be as depicted below.


Reduced clicks and elimination of user data entry errors is also of significance. Besides these, there are several other benefits.

Prerequisites to use of bar-codes and RFID

  1. Link UPC/ EAN numbers in material master (UPC is a 12-digit American code, EAN is a 13-digit European code).
  2. Link Equipment to material linked to UPC/EAN number.
  3. Design of pdf forms for labels
  4. Finalizing the process of fixing the labels to the material
  5. Generating the QR code or Barcode

Sample overview of some applications

Goods receipt

The MIGO transaction is used to post typical SAP Goods Receipts. A business user must go to his/her laptop/desktop and enter the information. To make the proper entry, the user must input the Purchasing Document Number. The screen for transaction code MIGO is shown below.

This screen can be modified for a bar code or RFID gun to provide flexibility to the user to post goods receipt either against a Purchasing Document or against the material itself As a result, the user does not need to remember the number of the Purchasing document.

A few clicks’ and the user is able to post the receipt document with minimal data entry.

The user also has the option of posting a material’s Goods receipt if the user forgets the Purchasing document number, as illustrated below.

The user can post a goods receipt with just a few clicks, as seen above. The user needs to input the quantity that was received. The user is exposed to what has been obtained earlier in contrast to the Purchasing document, as well as the open quantity that needs to be received. Some other benefits can be summarized as under

Goods Issue

In standard SAP, materials are issued to a cost center or a Work Order (which might be a Production, Plant Maintenance, or Process Order). This must be done at the user’s desk, where there is a risk of material being issued incorrectly or material being entered incorrectly. With a smaller screen, the user may immediately begin issuing stuff from the warehouse by scanning the appropriate material on a mobile device. The user can scan the material to produce a list of Work Orders for which the material is needed, or the user can issue the material against an Order or cost center, as illustrated below.

The Goods Issue app allows users to upload Goods Issue Documents with just a few clicks.

Benefits of using Goods Issue app

Delivery and shipment

Delivering a product is a critical duty for any business. The safe delivery of the product to the consumer is a critical feature. Customer satisfaction is improved by timely and accurate delivery, which leads to an increase in the number of customers.

Typically, products are packed in containers/boxes with labelling. The product’s traceability is manual with this method. The customer, the organisation, and the Logistics vendor are all involved in tracking the consignment through phone, which is a laborious process. This signifies a significant amount of time is spent. A pdf based label form can be used to trace all products that leave the organization. This is scanned at every stage and level until the consumer receives the goods. This makes it simple to keep track of the products that have been delivered.

It aids in:

  • Providing inventory until it can be picked up by the freight forwarder at the shipping point
  • Freight carriers’ handling and tracking of the product
  • The buyer can easily track their shipment till it arrives at its destination.
  • Receiving consumer returns or warranty products.

Maintaining Physical Inventory to manage cycle count

Inventory counting can be a difficult undertaking. Normally, in any firm with an ERP system, someone would physically count the inventory and compare it to the inventory available in the ERP system. Using ABC analysis, physical inventory counting might be divided into three categories: monthly, six-monthly, and yearly. Manually entering the count on a sheet of paper could result in manual errors, recounting the material, and system reconciliation. In the process, time and human effort are wasted. The advantages of using a minimum viable product on a mobile device for this are as follows:

  • As you count, enter it into the system.
  • If a material is about to be counted twice, the system informs that the user has already counted it and asks if a recount is needed. Before counting and reposting, it asks for confirmation from the person. If any errors are discovered, the material can be reviewed again for clarification.

Benefits of physical inventory application

Transfer of materials

Material handling is moving commodities/ materials from one storage site to another to save space or moving products between factories/plants to solve supply restrictions.

The physical transfer of materials may not always match the system transfer. This causes a physical and stock mismatch in the system. It may also result in plant-level transfer pricing. Materials can be scanned and updated in the system right away.

Benefits of Transfer posting application

Manage Equipment

  • Returns to Vendor
  • Equipment sent to customers to address warranty issues

Many businesses struggle to maintain track of assets delivered to vendors for repair or servicing, as well as equipment sent to customers for warranty concerns.

We solve this problem by employing a barcode/RFID tag to tag the asset.

Benefits of Manage Equipment application is

As we conclude traceability of materials can be managed using the Barcode/ RFID application effectively, easily and quickly at the point of use.

Source: Images – V3iT