Archive for the ‘Barcode & Data Collection’ Category

The Internet of Things promises to transform the way humans, through their machines, interact with the Internet, and when you think about it, it’s already here.  Manufacturing is a case in point.

Today, sensors attached to shop floor equipment are capable of sending reams of production and equipment data back to the ERP systems, which hold that data in a repository for future use or analysis.

Handheld scanners are used to track the movement of parts, pieces and production.  Beyond that, they also aid warehouse workers in the movement — the picking, packing and shipping – of countless SKUs.  Everyone from the folks walking the floor to the folks in the front and back offices can have access to the same production and inventory information, in real time, at the same time.

Smartphones in the customer service and CRM arenas have made possible up-to-date information on all manner of data, from customer sales and orders to inventory quantities on-hand to sales reports across the territory or across the globe.  From checking into hotels to allowing physicians to check in on patient records from their phones and tablets, the interconnectedness of machines, ERP and the web has reached critical mass.

It’s the full-flowering of Bill Gates’ long-ago promise of IAYF: Information At Your Fingertips.

By 2020 according to one industry analyst, fully 95% of products are expected to be IoT enabled.  (We think that’s a bit optimistic, but their point is well taken nonetheless.)

All these advances have their advantages of course.  They save time – lots of it.  They save money – again, lots of it.  They speed up delivery, improve customer responsiveness, enable customers to become self-serving, and generally raise the level of satisfaction among a wide range of customers and their supporting companies.

For companies today frankly, there is little choice any more: adopt and adapt, or be left behind.  Sometimes the toughest question becomes: where do we start?  Luckily, there’s no shortage of consultants and solution providers willing and capable of providing the necessary guidance to get started.  About the only thing you can’t do any more is… wait.



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Our friends at Insight Works, a provider of automated warehouse and software solutions, have pointed out the most common ways companies lose money through warehouse and inventory mistakes.  Considering that these mistakes are common, and that the U.S. Bureau of Labor Statistics says that the number of U.S. warehouses has risen 15% since 2010, they are worth sharing.

Overstocking.  It’s an expensive issue for all supply chain operations.  Statistics show that U.S. companies are sitting on $1.43 of inventory for every $1 in sales – and that’s too much.  Errors that range from incorrect bin labeling and putaway procedures, to lack of oversight or pure laziness are all contributors.  But the bottom line is a considerable amount of tied-up working capital which, if recaptured, represents a sizeable bump in the bottom line.

That’s where automation helps, and often, very quickly once implemented.  A warehouse management system can automate stocking processes and ensure accuracy in stock counts, while also supporting managers with insights into optimal time to restock.

Mispicks-and Mis-shipments.  A single mis-pick costs, on average, about $22, and the average U.S. company has been shown to lose $390,000 annually due to mis-picks (yes, this obviously includes some pretty large firms, but not exclusively).

Here again, automation pays.  A robust warehouse management system can pinpoint and address inefficiencies. Barcode scanners help reduce the chances of mispicks and mis-shipments by eliminating risks associated with manual data entry.  Any picking errors are identified instantly by the barcode scanner, and incorrect items never make it to shipping, let alone customers.

Inventory count errors.  Mistakes in cycle counts, prevalent in manual or paper-based systems, hurt efficiency and drive up mistakes of either too much, or occasionally, too little inventory.

As the folks at Insights Works note… While inventory counts are undertaken to help support accurate inventory records, manual counts are time-consuming and prone to error.  A worker may, for example, accidentally group differently sized items together and count them as the same size, resulting in an incorrect count.  Replacing these manual processes with an automated system that leverages barcode scanners can reduce time spent on cycle and inventory counts and cut down on errors.  Best of all, when items are scanned and counted, data is automatically added to the inventory management system, further reducing administrative tasks and supporting accuracy without extra work.

Picking time.  Today’s WMS systems can direct workers on the most efficient routes to make their picks when filling orders.  Some can even provide optimal picking order based on certain order characteristics.  Workers save time, increase pick rates, and substantially reduce picking errors compared to manual systems.  This helps make even new, less experienced workers more efficient in short order.

Incoming inventory errors.  Some warehouses still use time-consuming and error-prone manual processes for counting and reconciling incoming shipments, which delay outgoing orders awaiting updated inventory data.  Instead, workers can leverage barcode scanning to more quickly receive and verify incoming shipments because scanned data is automatically sent to the warehouse management system — no extra steps needed. This supports speed and accuracy, and ensures that human errors related to incoming inventory are avoided.


The bottom line is this: Automated warehouse management systems have been around for years, and they greatly improve the efficiencies of all warehouse operations.  In fact, probably no other ERP automation component provides a faster payback.  If you’re not already fully automated ‘out back,’ perhaps it’s time you asked yourself why.


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A recent post by Brian Neufeld of Insight Works, a manufacturing and warehouse management supplier of software add-ins for Microsoft Dynamics points out a few of the key areas where companies lose money due to inaccurate inventory – points we think worth passing along today.

One key area of waste involves, of course, the tying up of working capital.  Inaccurate counts create situations where purchasers buy more inventory than they need, tying up precious capital.  How often is it the case that misplaced inventory, or double-locations, cause confusion and increased costs?  Having 100 of something when you only need 50 is simply wasteful – but unless you know just how many you have of an item, and its precise location, it’s a mistake that’s all too easy to make.

Multiplied across enough items, in the end you’re reducing the amount of capital available for more important uses, basically a lost opportunity cost.

And then there’s inventory shrink.  According to the National Retail Federation, 1.44% of all sales are lost to inventory shrink.   Shrink does not only refer to theft and damage, but can also be a byproduct of bad counts and other tracking inaccuracies.

And then there are labor costs.  A lot of time gets lost chasing down items that aren’t there… or aren’t where a system says they are.  That lost time is compounded when others have to join the search.  And it doesn’t have to happen all the time to add up to a fair amount of lost labor efficiency chasing product.

Then there’s the cost of lost customers due to the inability to fulfill customer orders or meet their time demands, often caused by out-of-stock situations.

All these issues and more can be turned around by embracing the benefits of warehouse and inventory automation.  Paper-based systems are error-prone, labor-intensive and time-consuming.  Today’s digital solutions, consisting of software integrated with the company’s inventory, production and sales orders, and coupled with commonly available handheld bar code scanners, can make these mistakes and costly issues a thing of the past.



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RFIDIn an APICS Magazine article entitled “RFID at Work” three PhD’s who serve day jobs as computer professors and consultants detail many of the requirements for implementing Radio Frequency ID systems in manufacturing.  While you can find the full article (if you’re an APICS member) in the Sep/Oct 2015 issue, we thought we’d reprise for our readers here the key steps to implementation.  What follows assumes that you’ve already parsed through the thought process about whether RFID is right for you when it comes to having more accurate and timely information to improve your business processes.

The basic element of any RFID system is the data point – the location where the RFID ‘tag’ is read.  It can be used to receive goods and follow work in process along its route according to the ERP system, tracking progress across all work centers or locations.

The key initial step then is simply to identify the key issues and goals of the system, and follow those with a set of design principles.  Look for the logical and technical process requirements that must be logged or acted upon, as well any constraints.  From these, a prototype can be implemented.

In a typical manufacturing environment, the tag will contain fields including the order number, the finished good ID or product number and the route step identifiers that establish the sequence of work center operations.

Most low-cost tags have relatively limited memory (512 bits), minimal enough at these price points that it requires that the data is produced while moving the tag from one station to the next in the route while interactively obtaining deeper data from a traveler, route ticket or work order already in the ERP system.

Each work center is monitored by data readers with antenna(s) mounted above the shop floor.  Typically, the reader will read any RFID tag that comes within about a ten foot radius of itself.

In such a setting, data points would be equipped with touch screen monitors displaying WIP tags in the queue.  At the exit point from production, a tag bearing the product ID number is attached to the product before being moved to inventory, shipping or secondary operation areas.  The tag is read at this point and that information can be transferred back into the ERP system, thus completing the loop.

The info provided above is intended of course only as a general outline of RFID.  A system requires all the “layers” to work together in order to make the tracking of goods more efficient.  Those layers include the physical RFID network consisting of tags, antennas, readers, touch screens, and the shop floor network.  The second layer is usually the ‘middleware,’ responsible for producing your tag ID numbers, reading and writing to the tags, and managing data transfer from data point to reader and then to the network’s control system.  The point is: there is a fair amount of work involved, as one might expect.

Hopefully, our comments here today, courtesy of our friends at APICS, will get you started in your thinking down the road to RFID.

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key to accurate inventoryA recent article in APICS Magazine (Jul/Aug 2014) reminds us that it is generally accepted that inventory records should be at least 95-98% accurate “in order to enable successful ERP planning and provide good customer service.”

The APICS body of knowledge emphasizes that cycle counting is the key to accurate inventory.  “By counting items regularly and using the cycle count process to identify and correct the sources of errors, companies can quickly raise accuracy levels beyond 90 percent and maintain a continuous improvement posture that maintains a high level of performance,” according to Dave Turbide, CPIM, a consultant and APICS instructor.

But as Turbide points out, just as important as cycle counting is the follow-through necessary to identify and correct the source of errors.  Only then can improvement be attained; cycle counting alone is not quite enough.

While correcting an inaccurate balance may treat the symptom, it ignores the disease, Turbide notes.  You need to figure out how to prevent the errors in the first place – and that requires identifying and remedying the source of those errors.

What’s the secret?  No secret at all actually… The only way to achieve and maintain a high level of inventory accuracy is through a solid and reliable transaction reporting process.  We didn’t say it would be fun or glamorous – but it is necessary.

Transactions, as Turbide points out, are created by people or machines – machines being the more reliable.  Thus, any transaction that can be automated should be.  The hierarchy of transaction accuracy looks about like this:

  • Direct connected sensors, like PLCs for recording inventory movement and usage; after that come computer-validated entries, like…
  • RFID – radio frequency identifications – though signal interference and bad scans can affect results
  • Bar codes – similar issues to RFID, but computers and a good WMS system can help validate scans
  • Validated manual entries – systems usually can validate at least some of the data entered by humans
  • Manual entry – the least accurate.  Systems often cannot validate unexpected transactions like adjustments, certain scrap or unplanned issues.

In the end, cycle counting helps – a lot.  But it’s not enough to achieve the premium (95%+) levels of accuracy required to maintain strong controls and customer service.  To achieve these goals, companies need to make the best use of automation, ERP and error correction.


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dms_keeping_WPIn this final post (derived in part from a white paper from Dynamic Manufacturing Solutions that can be found here), we’ll provide a few key takeaways when considering barcode data collection in your own firm, and take a quick look at payback.

Common points to look for payback when implementing barcode technology include:

  • Shipping & receiving
  • Time entry
  • Part or Item picking
  • Inventory counting
  • Invoicing
  • Production labor input tracking

Each company needs to look at the high cost of inaccurate data, and consider which areas are most ripe for improvement through process automation.  Look for where data entry is required, determine the significance of that function, and then look for how automation will improve the accuracy or speed of that process.

What is the cost of the solution?  Many out-of-the-box solutions to enable data collection are relatively inexpensive.  Sometimes, as our example showed in our prior post, the entire system cost can be recouped in a single annual inventory replacement.  Generally, you’ll find modest investment and rapid payback.

When evaluating payback, look at the obvious tradeoffs: system implementation costs versus the positive benefits of such things as:

  • Reduced picking errors
  • Reduced inventory levels
  • Reduced carrying costs
  • Reduced data entry errors
  • Reduced inventory counts/expense
  • Reduced shipping errors (when you ship the wrong item and fail to ship the right one!)
  • Improved on-time delivery
  • Reduced out-of-stock situations

… and the list goes on.

Given the benefits, most data collection systems can have a payback horizon as little as 6 months to a year.  That doesn’t even include the intangible benefits of improved goodwill, customer retention, employee satisfaction and brand image.

In short, most firms that employ barcode technology intelligently – with a good plan and some forethought – find it both a short-term and a long-term money maker.  Start with a conversation and some guidance from your technology or ERP provider.  If they’ve done this for awhile, they will have no problem taking it from there.


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dms_keeping_WPIn this series of posts we’ve been illuminating some key points of interest for companies interested in improving their business with technologies like barcode and RFID for data collection and inventory tracking purposes.  Our inspiration comes from a white paper from our friends at Dynamic Manufacturing Solutions (DMS), a provider of add-on products for Microsoft Dynamics NAV software users.  That white paper can be found here in its entirety.

Our 4th of 5 posts today covers an example of benefits derived from these technologies in inventory management, as described by DMS at one of its client firms.

This was a company with thousands of items (SKUs) and which conducted annual inventory counts manually.  As you can imagine, inventory counts were a major event at this firm, as DMS points out.  To avoid business disruption, counts usually occurred over a weekend, for which employees were paid overtime.  Prep work began ten days before the actual counts, including the entire prior weekend.  After the counts, it took four staff five days to reconcile all the numbers.

When the company decided to employ a 2-D barcode-based system for product and inventory bins and to utilize handheld readers to receive inventory, put away items and pick product for shipments, improvements rapidly followed.  They were able to carry out small, more frequent, easier counts.  They reduced the number of inventory adjustments required.  Faster cycle counts improved accuracy, which in turn improved order fill rates.  Customer satisfaction rose with improved quoting of delivery dates.  Counting only the reduction in inventory labor, the firm reported that the entire barcode system paid for itself after the very first annual count.

Our own deployment of these types of inventory and WMS automation solutions bears out similar success stories over the years.

Besides improving virtually all facets of a company’s inventory concerns, barcode technology has also been found useful in data collection during production (counters that tally production, or count lengths of material used during extrusion processes).  They’ve also been used to track the labor component in product assembly, and can be integrated with timekeeping systems for payroll purposes as well as improved job cost tracking – ultimately yielding more accurate actual time tracking that in turns leads to better future job quoting.

The results are almost always improved productivity, the result of using fewer people (or less time) to accomplish more production, more accurately, or to reduce the overhead costs of some previously manual, often inaccurate tracking chore.  Not to mention, reduced rework, improved accuracy, better quoting and improved on time delivery.  The end result when properly implemented is almost always twofold: improved customer satisfaction coupled with lowered costs.

And finally… the time to recapture barcode inventory investments represents one of the fastest recapture rates in all of automation today.  We’ll take a quick look at that in our next and final post on the data collection/barcoding topic.  Stay tuned…


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