Organizations implementing two-dimensional (2D) barcodes in warehouse and distribution environments can reduce operational costs by more than 60 percent, representing annual savings of over $500,000 per facility, according to research commissioned by GS1 US and conducted by VDC Research on May 29.
The report, titled “Advancing Intelligent Data Capture in Modern Logistics Operations,” compares traditional one-dimensional (1D) barcodes with 2D barcode workflows. The findings show that using 2D barcodes results in fewer scan failures, less need for relabeling, and lower shipment error rates among mid- to large-scale distribution centers.
GS1 US is introducing an interactive online cost-benefit calculator to help companies estimate the potential return on investment from transitioning from 1D to 2D barcodes. This tool allows users to input variables such as labor costs, scan volumes, and error rates to determine possible financial benefits.
Gena Morgan, vice president of Global Standards at GS1 US, said, “Organizations are recognizing that 2D barcodes address long-standing scanning inefficiencies associated with traditional 1D barcodes, unlocking measurable improvements in speed, accuracy and operational cost savings while also enabling richer product transparency. As this research shows, these efficiencies create a more reliable data foundation that supports better inventory management, traceability and supply chain visibility as the industry continues to move toward more connected, data-driven operations.”
The research highlights challenges with current use of 1D barcodes such as readability issues and limited ability to capture detailed product information. Organizations relying mainly on 1D codes reported a seven percent first-pass scan failure rate and a one-and-a-half percent relabeling rate—factors that increase labor time and operation disruptions. VDC estimates facilities using only 1D workflows can incur over $800,000 annually due to shipment errors and extra labor required for rescanning or relabeling.
In contrast, a single machine-readable symbol like a GS1 DataMatrix or QR code powered by GS1 Standards can encode product identification along with key attributes such as lot number or expiration date. Industry initiatives like Sunrise 2027 are encouraging broader adoption of these technologies across retail point-of-sale systems while organizations focus on back-end benefits including improved inventory management.
