For over 20 years manufacturers, retailers, and distributors have used barcode labelling to better manage their inventories, proving that a relatively simple, cost-effective system provides up-to-the-minute information on inventory status.
When integrated into an existing information system, barcoding allows you to track your merchandise and to conduct both full-scale inventories department-wide cycle counts. Inventory can be reconciled in a day instead of weeks. And barcoding provides more accurate data while saving both time and costs.
Manufacturers and distributors use barcoding to track production, parts, shipping, and warehousing. A variety of labels and scanning systems are available to accommodate both warehouse and manufacturing environments. Many national chains now require manufacturers to ship their products already tagged and barcoded to their specifications.
Retailers utilize barcoding for the inventory control, which is crucial to the success of their businesses. Inventory cycle counts, point-of-sale checkout, purchasing, and sales analysis are just a few of the benefits of a retail barcode system.
In today’s business environment, staying competitive is critical to your success. Barcode data-collection technology is an effective way to improve the bottom line and meet the competitive challenges your organization faces every day.
This guide is designed to give you and your company information about barcode data-capture technology and the benefits of using barcoding in inventory management.
Combined with data-collection technology, bar codes provide a rapid, accurate, and efficient means to collect, process, transmit record and manage data in a variety of industries. Retail, package delivery, warehousing and distribution, manufacturing, health care, and point-of-service applications can all benefit from the use of barcodes.
About Barcodes: A barcode can be described as an “optical Morse code”. Series of black bars and white space of varying widths are printed on labels to uniquely identify items. The barcode labels are read with a scanner, which measures reflected light and interprets the code into numbers and letters that are passed on to a computer.
Automatic Identification: Automatic identification or “Auto ID” encompasses the automatic recognition, decoding, processing, transmission and recording of data, most commonly through the printing and reading of information encoded in barcodes. Barcodes allow for rapid, simple and accurate reading and transmission of data for items that need to be tracked or managed. Barcodes can be printed directly on mailing tubes, envelopes, boxes, cans, bottles, packages, books, files and other paperwork, furniture, cards and many other items for identification.
The emergence of Auto ID systems, including barcodes and the related printers, scanners, decoders and software, has significantly increased the speed, efficiency and accuracy of data collection and entry. Early application of barcode scanning, which included retail point-of-sale, item tracking and inventory control, have been expanded to include more advanced application such as time and attendance, work-in-process, quality control, sorting, order entry, document tracking, shipping and receiving and controlling access to secure areas. These expanded systems have measurably increased productivity by linking production, warehousing, distribution, sales and service to management information systems on a batch or real-time basis. Consequently, opportunities to improve operational efficiencies and customer responsiveness have developed for retailers, transportation and package delivery companies, manufacturers, wholesale distributors and service providers.
Benefits of Barcoding in Inventory Management: Barcode data collection systems provide enormous benefits for just about any business. With a barcode data collection solution, capturing data is faster and more accurate, costs are lower, mistakes are minimized, and managing inventory is much easier. Barcoding has become a popular and efficient way of controlling inventory management throughout the manufacturing process and is widely used in many industries. There are several benefits available to your company, which we shall explore in this article.
The following are some of the benefits of barcode:
Fast and Reliable Data Collection: Faster Data Entry: A barcode scanner typically can record data five to seven times as fast as a skilled typist.
10,000 Times better Accuracy: Keyboard data entry creates an average of one error in 300 keystrokes. Barcode data entry has an error rate of about 1 in 3 million.
Reduced Labor Costs: This is the most obvious benefit of barcode data collection. In many cases, this cost savings pays for the entire data-collection system. Do not put all of your attention on this benefit, however. Even though this is the most apparent benefit, it is often overshadowed by even greater savings from other areas.
Reduced Revenue Losses Resulting from Data Collection Errors: This benefit often surpasses the savings in labor costs. You know that if you make a significant error on an invoice in the customer’s favor, you will never hear about it again. However, if the error is in your favor, you will hear about it immediately. In most companies, it does not take many errors to amount to a great deal of lost revenue.
Necessary Inventory Levels: Using barcodes are one of the best ways to reduce inventory levels and save on capital costs. Keeping a tight handle on inventory can save significant amounts of money.
Improved Management and Better Decision Making: Although hard to measure, this is an important benefit. In many cases, improved management due to automated data collection technology could be the best benefit of a barcode system. A barcode system can easily gather information that would be difficult or impossible to gather in other ways. This allows managers to make fully informed decisions that can affect the direction of a department or company.
Faster Access to Information: This benefit goes hand in hand with better decision-making. With better information, you can gain opportunities and get the jump on the competition.
The following are just a few of the many ways barcodes are being used to improve the profitability and efficiency of a variety of company types:
Point of Sale: Point of sale is one of the most common segments of the barcode market. Everyone is familiar with the scanners in grocery and department stores. Benefits of barcoding in point-of-sale systems include:
Cost Savings: This is the most obvious benefit. A medium-to-large store can save enough checker time to significantly reduce payroll. You also save direct labor costs through less time spent taking inventories and ordering product.
Customer Satisfaction: A proper barcode system will speed customer checkout. This will improve customer satisfaction enough to directly increase revenue over time.
Reduced Inventory Costs: Immediate access to inventory information on a real-time basis can be used to reduce inventory levels. This will reduce costs for a company in a number of ways, including interest, labor for handling excess inventory, and facility overhead.
Automated Reordering: Accurate stock levels allow for automated replenishment of low inventory.
Better Decision Making: With barcode data collection you can tell not only what the customers are buying, but also when they are buying it and in what combinations. This can improve business management by suggesting better locations for goods in the store and identifying advertising targets.
Point-of-Sale systems can be used in any retail setting. The grocery industry is the best organized setting, but most vendors in that area are concentrating on high-end scanner/mainframe systems. There are abundant opportunities for PC-based systems in small to large-sized businesses, such as video stores, convenience markets, and clothing stores.
Work In Progress: Many manufacturing and other industries have work that must go through several steps to completion. Barcode systems can track material through each step of the work and keep detailed records on each piece or batch. When a problem occurs in the output, supervisors and managers can track the work back and quickly resolve the issue. This is one of the best ways to improve both quality and yield in virtually any multi-step process.
Inventory Control: Tracking inventory manually is a laborious process. With barcodes applied to each item in inventory, portable scanners can be used to track shipping and receiving and quickly take physical inventory. The data from portable scanners can be uploaded to a central computer system at regular intervals or portables can update inventory in real-time, depending on the system you choose. Barcode inventory control provides accurate, real-time inventory updates. This allows a company the opportunity to reduce stock levels and thereby reduce carrying costs. It also reduces the time taken to collect data for purposes such as annual inventories. With improved efficiency, operating costs are lower.
Secured Access: A secured access system provides door and gate security by controlling access using encoded employee identification badges. Barcode badge scanners or magnetic stripe readers are mounted at doors and gate entrances, and authorization is provided from a central computer.
Time and Attendance: A time and attendance system uses encoded employee identification badges that are scanned when employees start and stop work. This allows automatic tracking for payroll and eliminates paper time sheets and time clocks.
Quality Control: Barcode systems in quality control can be used to tell a person which test to perform for a given part and where to send it if it fails. Barcode systems can also create permanent records for tracking component and subassembly failures.
Packaging: For packaging, a barcode printer is used to generate a label to identify part numbers, serial numbers, and shipping information. This labeling can be used to automatically sort packages for shipment, automate receiving and greatly enhance package tracking.
Collection of Data from Forms: Businesses such as medical and dental practices rely on complex patient forms. Using barcodes, detailed information can be quickly entered in the computer. Barcodes printed by check boxes on a form allow fast, accurate data entry by simply scanning the codes by the check boxes. This makes easy task of gathering large amounts of information for a client. Reduced data collection costs and better service are the results.
Productivity Measurement Systems: Productivity measurement is a practice that can drastically reduce labor costs in manufacturing, warehousing and most other types of business. A well-managed system will allow supervisors to isolate the problems that may come up so that they can take steps to solve them. Within an organization, departments may have different types of activities, making it difficult for supervisors to keep track of what everyone is doing. Productivity-measurement systems automatically track what work is being done and compare the work to expected output. When the results do not measure up, supervisors can take corrective action. This type of informed supervision and management can typically cut department costs by 15 to 20%.
Summary: These are just a few examples to get you started thinking about what you can do with bar codes. Barcode systems routinely save companies money while improving quality, on-time performance, and other key business factors.