Location labels are far more than just stickers in a warehouse – they are the backbone of navigation, accuracy, and efficiency.
But what exactly should go on a warehouse label? And should you keep your existing numbering or relabel entirely?
Here’s a practical guide, grounded in real-world experience and best practice, for what to include on a location label – and how to decide whether to relabel your warehouse or keep the status quo.
Purpose of location labels
A label is the operator’s guide, the system’s handshake, and the warehouse’s signpost all at once.
It must:
Be instantly human-readable, reducing delays or mistakes at the rack
Support efficient scanning and integration with WMS/EWM systems
Scale and adapt as layouts change or warehouses grow
Support your processes (putaway, picking, replenishment, audits) rather than work against them
You’ll see inefficiencies creep in when labels are not properly thought out: mispicks, wasted time and resources, confusion, and frustrated staff.
Key elements to include on a location label
Every warehouse label should communicate location information quickly and clearly to both operators and systems.
The core elements are common across most operations, but the exact combination will depend on warehouse design, storage type, and operational requirements.
Essential elements
- Location code: This is the core identifier for each position, usually combining as a minimum Aisle–Bay–Level or a similar structure. This can be numeric, alphanumeric, or mixed depending on system requirements and warehouse layout (see below to understand how to choose from different conventions).
- Barcode / 1D code: Most warehouses use a Code 128 barcode to enable fast, accurate scanning (although old systems may still use Code 39). To maintain consistency between visual and system references, the barcode should mirror the printed location code exactly. The data contained within a code 128 barcode uses fewer bars and spaces, so it tends to have a longer scan range than a code 39 barcode. Be especially careful with putting lots of information within a code 39 barcode, as it can significantly hamper scan ranges.
- Readable text: Large, high-contrast characters will help operators identify locations quickly. Maximise beam heights without the roll at the top and bottom of the beam, i.e., the flat section. Labels work less well when going round the bends at the top and bottom of the beams. Slight indentations in the middle of the beam surface don’t tend to cause any issues, such as the indentation on Whittan beams as an example. If in doubt, please contact us for support.
- Logical structure: To support intuitive navigation and consistent training, the numbering sequence should follow a clear, physical logic; bottom-up for levels and left-to-right for bays, for example.
Optional or situational elements
- Colour coding: Used increasingly in warehouses to help operators distinguish between levels. But it can be used for zones and subdivisions if it suits you to do so.
- 2D barcodes / Data Matrix: This is increasingly requested but not always necessary. While they can store more data, they typically require more uniform label space and can be less flexible with long-distance or angled scanning.
- Subdivide labels: In shelving systems with multiple pick faces, subdivisions can be added for precision.
- Zone or section codes: Large or multi-building sites often add a prefix or suffix to identify a specific zone, improving organisation and scalability. However, if the operator doesn’t need the building reference in the eye-readable format, don’t put it on the label. Make it as simple as possible. Put references in the barcode if needed, but be careful to test for scan range.
- Human readable under barcode: always put the human readable under the barcode showing exactly what the barcode contains. If for any reason that barcode can’t be scanned, at least the data can be manually input while a solution is sorted out.
- Directional indicators: To clarify the order of locations in complex racking or mezzanine setups and reduce errors and speed up picking, arrows or visual markers can be used.
Different requirements in practice
How you use these elements will vary greatly from one warehouse to another. For example:
A major cosmetics firm uses a very simple three-part numeric structure. Likely set up before the colour-coding system was introduced, this old-style format is surprisingly effective – covering picking, racking, and shelving with just three divides to map thousands of locations.
While they work well, adding colour could make navigation even faster – humans often register colour blocks faster than alphanumeric strings.
Ultimately, this shows how label size and structure can be tailored to different parts of the warehouse while maintaining a clear logic.
A cold storage chain uses a numeric-only Room–Aisle–Bay–Level format with upright labels only and no upper levels, more suitable for food storage rather than rapid distribution. This reflects the different operational priorities of cold storage, where vertical segmentation is less relevant than clear, simple location identification for food storage.
At a fulfilment centre, shelving labels use an additional suffix (1, 2, 3, etc.) to indicate subdivisions on a single shelf level. This allows operators to differentiate between multiple pic faces on the same shelf, showing how directional indicators or extensions can support denser storage environments.
Choosing a numbering convention
When designing your location labels, one of the first decisions you have to make is whether to use a numeric, alphanumeric, or mixed numbering convention. Each system has its advantages, and the right choice will depend on the type of warehouse, systems in use, and how operators interact with the space on a day-to-day basis.
Alphanumeric vs numeric
Alphanumeric systems help the brain switch context more easily, allowing operators to navigate larger sites without confusion.
Numbers and letters together tend to break long sequences into more digestible chunks, ultimately improving readability.
Numeric-only systems can be simpler and often are better aligned with SAP EWM best practices, particularly in new (greenfield) implementations where numbering logic can be designed from scratch. That said, alphanumeric formats are equally valid if defined consistently.
Examples in practice
- Numeric: 100–001–01 (Aisle–Bay–Level)
A traditional, numeric-only system. These are upright labels with no upper levels, focused on static storage rather than rapid distribution.
- Alphanumeric: AA–1–01 (Aisle–Level–Bay)
This represents a simple, clean structure that’s easy for operators to interpret. This format keeps to a logical order but adds letters for easier identification across aisles and levels.
- Mixed: T4–A–4–E1 (Zone–Aisle–Bay–Subdivide)
Found in a warehouse setup where each shelf has multiple pick faces. The alphanumeric prefix defines the zone and aisle, while the suffix (E1, E2, etc.) marks specific subdivisions within a shelf level.
These examples show that the structure of the numbering scheme should mirror the physical and operational structure of the warehouse.
There’s no universal “best” format – only what best supports the environment and the people using it.
What to consider when choosing
- Warehouse size and complexity: Larger, multi-zone warehouse operations may benefit from alphanumeric or mixed conventions to maintain clarity.
- Integration with third-party systems: If your existing interfaces rely on numeric codes, consistency may outweigh redesign.
- Operator familiarity vs system optimisation: A numbering system must work for the operator first and foremost and then be compatible with the software.
- Future expansion plans: You should always number with scalability in mind – build in space for potential future aisles, levels, or zones without disrupting the existing pattern. Number towards the expansion areas and not away from them.
Relabelling vs keeping existing labels: pros and cons
A common problem in new warehouse implementations, particularly when introducing SAP EWM, is whether to keep existing bin numbers or relabel entirely.
Both approaches can have strong arguments, but the right choice will depend on compatibility, cost, and operational impact.
Keeping existing labels
Some advantages of keeping existing labels:
- Reduced operational disruption: Keeping existing bin numbers avoids downtime and minimises the risk of errors during changeover.
- Easier change adoption: If the staff is already familiar with the layout and numbering, keeping the same system would reduce training requirements.
- Simpler system integration: Existing interfaces with other systems will remain unaffected.
- Lower costs: No need to purchase and apply new labels.
And some downsides:
- Potential incompatibility: The existing numbering system may not align well with SAP EWM best practices or data models, which ultimately can limit system functionality.
- Lack of optimisation: The legacy numbering system might not support newer processes such as wave picking, slotting, or replenishment strategies.
- Data quality concerns: If legacy data carries inconsistencies, they may migrate into the new system.
Best practice, though, is to establish whether incompatibility or inefficiencies actually exist before assuming these are issues. If your current system is well-structured and aligns with operational logic, many of these drawbacks may not apply.
Implementing new labels
Some advantages of implementing a new system:
- Alignment with best practices: A new numbering system can be designed around EWM’s data model and capabilities.
- Process optimisation: Starting fresh would allow numbering to reflect the current workflows, and improve efficiency in putaway and picking.
- Data accuracy and integrity: New labels can provide a clean data set and get rid of historical inconsistencies.
- Scalability: A new scheme can be built to support future growth and potential layout changes.
And some drawbacks:
- Higher initial cost and effort: The relabelling process involves printing, installation, and labour costs.
- Operational downtime: Relabelling may require sections of the warehouse to pause or slow down the operations.
- Training: Staff will need to familiarise themselves with the new numbering logic. That said, the adjustment is typically quick if the system is intuitive.
Advice from experience
Before committing to either, you should evaluate your current numbering system’s compatibility with SAP EWM.
If the structure already fits system logic and is understood by operators, it may be the best choice to keep it.
If your site has become fragmented over time, or if future expansion is expected, introducing a new, scalable system can deliver long-term efficiency gains.
Ultimately, the decision should balance operational simplicity, data integrity, and future flexibility rather than just system preference.
Practical design considerations
Once you have defined the numbering logic, you should start thinking about the physical design of the labels themselves. The right label specification depends on the warehouse environment, the type of racking, and the way operators interact with the system.
Label size
You should select label dimensions according to visibility, racking type, and the distance from which scanning will take place.
Larger labels allow for clear visibility across large spans while keeping information legible from ground level.
Smaller and more compact dimensions are suitable for standard step beams where space is limited or where scanning occurs at a closer range.
Choosing a consistent but context-appropriate size across the warehouse ensures both readability and flexibility.
Durability
Different environments call for different materials.
Cold storage operations, for example, require labels that withstand temperature fluctuations and moisture, while ambient warehouses can use standard substrates.
It is helpful when checking data sheets to understand the difference between service temperature and application temperature. Service temperature is the temperature that the labels can be used at after application, i.e., minus 30 degrees to plus 85 degrees, etc.
The application temperature is critical; however, if the application temperature is 5 degrees, it won’t work if the beam is already at minus 25 degrees. Most standard self-adhesives can be applied at above 5 degrees and can then be frozen down to minus 25 – 30 degrees.
If the freezer is already on and the building is minus 25 degrees, you must use a material with an application temperature that is correct. If you don’t, the labels won’t stick! Also check to see if freezer adhesives need to be acclimatised prior to installation. i.e., they need to be taken down to temperature before being installed.
The key is to choose materials that will maintain print integrity, adhesive strength, and barcode readability over time.
Scanning distance
Barcodes must be proportionate to the distance from which scanners will be used.
A larger barcode with a higher x-dimension is essential if labels are positioned high on racking in order to maintain quick and reliable reads.
Undersized barcodes can slow operations and increase scanning errors. Our recommendation is to test scan everything with the equipment you are going to use when you go live. It’s the only way to know if it’s going to work well for the operator!
Installation strategy
Consider whether to install them all at once or in phased stages when deploying new labels.
A phased approach minimises operational disruption and allows for early detection of any potential issues.
While a full replacement can be faster overall, it may require planned downtime.
The best method often depends on the size of the warehouse, operational schedules, and staffing availability.
Recommendations & best practices
After decades of labelling projects across different industries and warehouse types, a few consistent principles stand out.
- Prioritise operator usability first, then system logic.
A label is, ultimately, for the person on the warehouse floor. The numbering must make sense to the operators before it serves the system behind it.
- Keep it as simple as possible.
We’re firm believers in simplicity – complexity rarely adds value. A straightforward, well-structured system is easier to train, scale, and maintain.
- Design for future growth.
You should always number with expansion in mind. Build headroom into your structure so that new aisles, levels, or zones can be added without disrupting the existing pattern.
- Pilot test before full rollout.
To validate visibility, scan performance, and operator understanding before applying them warehouse-wide, it’s best to trial new label schemes in one area.
- Be cautious with 2D barcodes.
While increasingly requested, 2D and Data Matrix codes don’t always offer practical advantages and can introduce scanning challenges due to their square format. Use them only where there’s a clear operational benefit.
A good location labelling design sits at the intersection of system compatibility, operational usability, and future scalability.
It’s about creating a system that works as well for the people walking the aisles as it does for the systems driving them.
Take the time to audit your current setup before deciding whether to keep existing labels or start again. Check for compatibility with your warehouse management system, identify any inefficiencies or inconsistencies, and weigh the costs of change against the long-term benefits.
More often than not, the most effective approach isn’t a complete overhaul but a phased, practical rollout that builds on what already works
