New GS1 US and VDC Research report examines how 2D barcodes may reduce scan failures, relabeling, and operational costs in warehouse and distribution environments.
A new research report commissioned by GS1 US suggests that broader adoption of two-dimensional (2D) barcodes could significantly reduce warehouse operating costs while improving inventory visibility and supply chain data quality.
Annual Facility Savings of $500,000+
The report, Advancing Intelligent Data Capture in Modern Logistics Operations, was conducted by VDC Research and examined barcode workflows across warehouse and distribution operations. According to the findings, facilities transitioning from traditional one-dimensional (1D) barcodes to 2D barcode systems could reduce operational costs by more than 60%, representing modeled annual savings exceeding $500,000 per facility in some mid- to large-scale distribution environments.
The research compared traditional barcode workflows with operations using 2D barcodes such as GS1 DataMatrix and QR codes powered by GS1 Standards.
According to the report, facilities relying heavily on traditional 1D barcodes reported a 7% first-pass scan failure rate and a 1.5% relabeling rate. These issues can contribute to rescanning labor, operational delays, shipment errors, and reduced inventory visibility.
VDC Research estimated that such inefficiencies can generate more than $800,000 annually in operational costs tied to relabeling, rescanning, labor inefficiencies, and shipment errors.
Advantages of 2D Barcodes
Unlike conventional 1D barcodes, which primarily store basic product identification information, 2D barcodes can encode a broader range of data within a single machine-readable symbol.
This may include lot numbers, serial numbers, expiration dates, and other attribute-level product information increasingly important for traceability, inventory management, and supply chain synchronization.
“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,” said Gena Morgan, vice president, Global Standards, GS1 US.
“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 report also highlighted ongoing limitations associated with many existing 1D barcode environments, including readability issues, inconsistent labeling practices, and limited support for more detailed product-level data capture.
Operational Benefits
The findings arrive as the industry continues preparing for Sunrise 2027, a broader GS1 initiative intended to accelerate retail and supply chain readiness for 2D barcode adoption at point-of-sale and throughout logistics operations.
While much of the public discussion around 2D barcodes has focused on consumer engagement and expanded product information access, the report suggests that operational benefits within warehouses and distribution centers may be equally significant.
Potential back-end advantages identified in the research include improved inventory management, enhanced traceability, lower fulfillment error rates, and better synchronization between physical product movement and digital supply chain systems.
To help organizations estimate potential financial impacts within their own operations, GS1 US also introduced a new online cost-benefit calculator that allows users to model projected savings using variables such as labor costs, scan volumes, and error rates.
The research was based on a survey of 400 U.S.-based organizations, along with interviews conducted with supply chain leaders across the retail, manufacturing, logistics, and healthcare sectors.
Broader Supply Chain Perspective of Savings
While the GS1 US study primarily frames the business case around direct warehouse savings such as reduced rescanning, lower relabeling costs, and fewer shipment errors, the broader supply chain implications may ultimately prove even more significant.
Improved data capture not only benefits the facility performing the scan. More accurate and consistent product-level data can create operational advantages across multiple supply chain participants, including manufacturers, retailers, logistics providers, healthcare organizations, and consumers.
For example, more reliable barcode data may support improved inventory synchronization, faster recalls, expiration-date management, reduced food waste, better traceability, and fewer fulfillment disputes. In highly automated supply chains, cleaner data can also improve forecasting systems, replenishment accuracy, AI-driven analytics, and interoperability between connected systems.
The result is that a technology investment made by one organization may generate spillover operational or financial benefits well beyond the original implementing party.
This broader distribution of value is increasingly relevant as supply chains become more digitally connected. Technologies such as 2D barcodes, RFID, IoT-enabled reusable packaging, and AI-powered inventory systems often create network effects where the total system-wide benefit may exceed the direct private return visible to any one participant.
In that sense, the GS1 findings may point to something larger than warehouse labor savings alone. They may also reflect the growing importance of shared data infrastructure as supply chains evolve toward more automated, traceable, and interconnected operating models, as proposed in our MBAM model.
GS1 US is a not-for-profit standards organization best known for administering UPC barcodes and developing data standards used throughout global commerce and supply chains.
Rick LeBlanc, EMBA, is the founder and editor of Reusable Packaging News (subscribe to the free newsletter) and editor of Western Pallet Magazine. A supply chain journalist with more than 30 years of experience, he specializes in pallets, reusable packaging, material handling and related operations. Rick is co-author of Pallets: A North American Perspective and Pallets & Progress: A Collected History of Pallets and Palletized Handling 1922–1945. He is also an advisory board member of the Virginia Tech Center for Packaging and Unit Load Design. Read Rick’s full bio.
