A product identification system can help your organization improve product traceability, enhance supply chain transparency, combat fraud, and protect business continuity. However, creating a product identification system can seem daunting, especially if you already have an extensive product lineup.
Fortunately, building out an ideal product identification system is easier than you might expect. The automatic identification and data capture (AIDC) market was worth over $69 billion in 2024. With a projected CAGR of 11.7% through 2030, there’s increasing demand for these systems—and plenty of innovations available in this space.
To help you navigate this process, we will explain what a product identification system is and why it’s important. This guide also outlines four easy steps for creating your own identification system and best practices for streamlining it.
A product identification system (PIS) helps organizations identify, track, and manage products at every stage of development. A product identifier moves with each product from manufacturing through distribution.
Businesses often use different identifiers for their needs, but tracking products using barcodes, QR codes, serial numbers, and even advanced radio-frequency identification (RFID) tags is common.
Product identification systems help companies generate unique identifiers for each product or batch. This not only helps verify a product’s authenticity but also ensures compliance and safety.
Product identification systems are also helpful for traceability, which links raw materials to finished products, customers to specific products, or shipment details to logistics companies.
There are plenty of identification standards to choose from, although Global Standards 1 (GS1) is widespread. GS1 is an international organization that created a system of supply chain standards designed to streamline product identification systems. It’s a helpful standard that ensures interoperability across countries and products, although it isn’t the only standard for product identification.
Following standards like GS1 allows businesses to track, monitor, and analyze every product’s movement, which reduces inefficiencies and helps you make better decisions.
With so many identifiers to track, most companies use product identification software to monitor products at every stage of the supply chain, offering visibility, compliance, and speed like never before.
Before we focus on how you can create the system, let’s explore the reasons to create the system. By developing a structured mechanism for identifying your products, your business can:
Fraud is a major issue affecting consumers and every member of the supply chain. For example, in 2023, consumers lost approximately $10 billion to fraud in the US alone — and that doesn’t include billions in business losses.
A product identification system allows retailers and other supply chain members to verify the authenticity of your products. This setup is particularly important if you manufacture high-value goods like electronics or luxury apparel.
A product identification system will help you fight fraud and improve supply chain traceability. By tracking products as they move through each stage of the supply chain, you can gain valuable business insights that will help you operate more efficiently.
This can improve profitability and allow you to serve your customers better.
Supply chain transparency benefits everyone, including your business partners. You can share data with manufacturers, shippers, distributors, and retailers to optimize your entire supply chain.
Improving supply chain transparency will boost your resiliency against unexpected disruptions as well.
In order to build an ideal product identification system, you will need to:
All companies that adhere to GS1 standards are assigned a GS1 prefix. This prefix is a series of numbers listed before an item’s Global Trade Item Number (GTIN).
The GS1 team partners with healthcare, transport, logistics, technical, and retail organizations. However, if you prefer to partner with another entity, we recommend seeking an organization that creates standards for your industry.
You can start assigning GTINs to your products after you have a GS1 prefix. Each product in your lineup should be assigned a unique GTIN. GTIN data must be entered into GS1’s database, as well as your own record-keeping software.
Once an item has a GTIN, you will need to place that number in a conspicuous location on your products. There are several ways to affix GTINs to products. However, it is important that you select a method that’s difficult to replicate so fraudsters can’t easily alter, remove, or modify GTINs.
With that goal in mind, we recommend creating identification nameplates, panels, or other ID labels and affixing them to your products. If you aren’t sure which specific durable solution to implement, an experienced nameplate and panel manufacturer—such as Metalphoto of Cincinnati—can help you find the ideal option for your product identification needs.
Companies like MPC can assist with every panel and nameplate design aspect, including selecting which materials to use and choosing a placement location. They can also help you decide what size and shape to make your custom panels so they don’t interfere with product performance or aesthetics.
The final step is to implement your system. While rolling out your new system across your entire product line simultaneously might be tempting, consider a more incremental approach.
Doing so can minimize the chances of significant manufacturing delays and ensure business continuity.
GS1 is a helpful standard, but businesses must still implement product identification systems carefully. Following these industry best practices can further streamline operations and improve product tracking.
Never mix part-numbering systems. A consistent standard is essential for ensuring seamless identification across your organization and the supply chain as a whole. A unified format prevents confusion and reduces errors, simplifying inventory tracking at scale.
Every part number must be unique to prevent misidentification. While GS1 provides helpful numbering standards, your organization must implement these standards, so ensure your team understands the importance of unique PIS numbering.
In practice, this approach also means avoiding reusing identifying numbers.
Your employees likely don’t have the time to assign product identifiers manually. An automated labeling system reduces your team’s workload and reduces errors. Most of these systems integrate with product identification software, bringing all your product identification and labeling needs under one solution.
This technology is improving daily. In fact, some solutions are now using machine vision to detect misaligned, missing, or incorrect labels before products move through the supply chain.
Instead of relying on employees to create and apply these labels, you can rest assured that the system handles them effectively and accurately at scale, freeing up your workers to focus on higher-value tasks.
Barcodes are a popular standard for product identification systems, but they’re not as efficient as modern alternatives. Upgrading from traditional barcodes to QR codes or RFID tags enhances product identification, tracking, and inventory management.
These technologies provide real-time visibility, improve operational efficiency, and support automation, reducing reliance on manual scanning.
While GS1 isn’t technically a legal requirement, it’s considered the standard for product identification in many industries, and failing to follow its requirements could result in regulatory action from oversight agencies.
Heavily regulated industries, such as food and pharmaceuticals, must also follow additional product identification requirements in addition to GS1 and other best practices.
For example, the Food Safety Modernization Act (FSMA) requires traceability for all food products to recall contaminated foods quickly. The Drug Supply Chain Security Act (DSCSA) also requires drug makers to serialize prescription drugs to reduce counterfeit medications.
These are just some of the industry-specific legal requirements you may encounter, and you should work with your legal team to determine which additional standards you may be required to follow. While this is an extra step, it’s crucial for not only protecting the public but also avoiding regulatory action and fines.
Implementing a product identification system is a must for improving traceability, preventing fraud, and staying compliant. While GS1 is a popular standard, your business must ultimately create and follow a reliable framework for tracking products at every stage of the supply chain.
Regardless of which approach you choose, you must have an experienced fabricator in your corner to help.
Metalphoto of Cincinnati (MPC) has the knowledge and expertise to help you choose the best identification tags and labels for your applications. Contact us today to speak with a team member or request a quote online.
Creating a product ID involves assigning a unique identifier to each product. To create a product ID:
Absolutely! Small businesses can benefit from a product identification system, especially if they manage inventory, sell across multiple channels, or need to meet compliance standards.
Simple solutions like GS1 barcodes, QR codes, and automated labeling help small businesses improve efficiency without requiring large-scale investment.
Emerging trends include AI-powered tracking, blockchain-based traceability, and IoT-integrated product tags. Blockchain ensures tamper-proof product authentication, while IoT (Internet of Things) enables real-time monitoring of product conditions. RFID-enabled smart shelves and automated checkout systems also improve retail and logistics accuracy.
Our sales engineers are experts in automatic asset tracking, tagging and identification,a nd can answer all your questions. Get in touch now.
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