We’re picking up from our intro, last post, to talk today about data collection systems… Our post is based on some sound points made by our friends at DMS in a white paper found here.
Even companies with electronic data management systems still record a lot of physical transactions on paper. Sometimes it’s almost unavoidable. Handwritten receipts… parts issued to jobs… shop floor travelers… vouchers… shipping documents, etc. Eventually, most of these need to be translated into the firm’s electronic realm. Too often, however, the document is lost, or delayed when found, or improperly recorded (typos, number errors, etc.).
There is a cascading effect to this. When a picker pulls something from inventory improperly or without recording it, the system’s inventory levels will show more stock than is physically there. Even once the problem is recognized, it typically involves pulling someone away from their regular job and correcting the mistake. Productivity is reduced if this happens often, with a corresponding effect on margins. And if the problem is not recognized, the results can be worse: unfulfilled production or customer promises, bad delivery quotes, expedited shipments, and so on.
It’s been said that a 10% degradation in on-time delivery results in a 1% market share loss.
The point is: recording transactions on paper is a highly volatile and potentially destructive practice. In most cases we find the effects are actually far worse – once they’re actually measured – than clients ever know. In other words, the damage is even worse than you probably expected.
Here’s where our friends at DMS make a key point, and where the introduction of data collection (barcode and RFID technologies) begins to come into play. First, break your processes down to the simplest, most common sense components. “Applying lean principles to a paper system ensures that, prior to implementing an electronic solution, your processes are completely streamlined.” Capture your data at the point of physical transaction. It’s the first step to reducing delays and lost information. After that, it’s time to look into automating the collection process.
Two key technologies exist in the shop floor data management arena: RFID and Barcode. We’ll take a brief look at RFID first.
RFID (Radio Frequency Identification) technology uses small “tags” that contain unique information that describe whatever it is they may be attached to. They share this information wirelessly (most typically have tiny antennae build into them) with computers, networks and databases. Multiple RFID tags can be read simultaneously, for fast operation. A tag could identify a single item, or if applied to a pallet can identify the entire contents of that pallet, or skid, or even a full truckload.
RFID works especially well in high-value, as well as high-volume environments. It’s great when real-time visibility is crucial. However, RFID tags are still relatively expensive for tracking inventory. They generate a lot of data, which can sometimes cause confusion when trying to obtain succinct information. We’ll continue next post with a comparison to barcode and what makes sense where. Stay tuned…