The work aims to propose a color code automatic positioning method to improve the positioning accuracy of pillow packaging machine color code as it is difficult to ensure the positioning accuracy of color code because of color code printing deviation, tension imbalance, mechanical vibration and other factors. The color code compensation principle was expounded in detail through the analysis on the operation law of packaging machinery. The synchronization between horizontal sealing and vertical sealing was estimated by color code and cutter spacing signals, and the deviation value was calculated. The positioning compensation was achieved by adjusting the pulse frequency and pulse number of vertical sealing motor with the horizontal sealing position as reference. At the same time, the control system of pillow packaging machine was designed based on PLC and the design philosophy of its hardware and software structures were introduced. Finally, the experimental study was carried out. The experimental results showed that tangent points on color code could realize color code positioning. The control system and method can meet the positioning accuracy required by packaging machinery and improve the packaging precision, efficiency and reduce defective rate of packaging machinery.