The first level of compliance is the labeling of individual products. Examples are the (universal product code) and its two-dimensional counterpart, the .

The U.P.C.-12 and Data Matrix bar code perform the same function. They identify an individual item. The U.P.C. is scanned at the POS (point of sale), or the register. For the customer, it performs inventory functions and automates the purchase process by returning the item price and adding it to the total sale.

The U.P.C. is commonly preprinted on product packages or printed on ‘hang-tags’ for the apparel industry, where they are applied with a removable plastic hang strip.

The Data Matrix identifies a component. Its function starts at the factory, where it aids the supplier in warehouse inventory and order filling. At the customer location, the Data Matrix also is used for inventory and the routing of components from the dock to the assembly line. If a particular part is defective, the Data Matrix reveals the vendor number and a trace code (1T).

One of the primary features of the Data Matrix is that a single symbol, containing up to 500 digits can be engraved or molded directly into the object itself. The symbol can be placed on something as small as a computer chip.