Aiming at the identification problem of medicine box traceability code, according to the principle that the relative position of each character in the medicine box remains unchanged, this paper proposes an efficient and accurate barcode identification method based on barcode neighborhood template matching algorithm. First, create a variable shape template of fixed elements in the kit, and then obtain the edge of the variable model, so as to determine the transformation matrix parameters of the collected image. Through geometric transformation, complete the positioning of the kit traceability code, and finally achieve the extraction of the traceability code. In order to verify the accuracy of the proposed algorithm, a test platform is built to verify the application of the proposed method. The experimental results show that the recognition rate of different kit samples is more than 99.4%, the algorithm has good robustness, high positioning accuracy, and fast recognition speed, which provides a new solution for the identification of kit traceability code on the production line, and has high practical significance.