Barcode tracking involves assigning codes to tools, and scanning the tool labels and employees' I.D. badges when tools are issued and returned. Barcode labels can be placed directly on large tools. For smaller parts, the labels can be applied to bin locations. The tool crib attendant uses a barcode reader to scan information into a computer's tracking program. Now both the tool and the employee are on record.

If one employee goes to the tool crib to get a pipe wrench, the attendant may discover that another employee didn't return one from an earlier shift. The attendant won't waste time looking for the wrench since it's probably with the second employee. If not, the person has some explaining to do and it's hard to argue with barcodes.

There are handheld scanners that you can use to check tools in and out on jobsites.

Barcoding is also an important feature of electronic lockers that operate without an attendant. Dispensing a cordless drill can be as simple as dispensing a candy bar with an electronic tool management vending system that combines an electronic locker, barcode tracking and software. To check out a drill, the employee scans his identification badge and selects the tool on a computer screen. He clicks an "issue" button to unlock the compartment where the drill is stored. Similarly, to return the tool, the employee scans his badge and clicks a "return" button, then places the drill in its compartment. If someone needs a tool that's already been issued, the computer will reveal the item's location.

Tying barcode tracking to inventory management software enables you to reduce inventory yet avoid stock outs. Set minimum inventory levels on both durable and expendable stock, and re-ordering becomes automatic. The software also enables you to monitor costs by department, employee, machine, etc.

In addition, you can track stock sent to repair and keep its complete life history. For example, you can find the date a grinding tool went out for repair and when it's expected to come back. The record may show this is the third time it's been reworked for the same problem. Check its usage history and you might find it was in the hands of one particular employee each time it broke down or that a certain operation caused each breakdown. These patterns may tell you something so you can head off future problems.