Posts Tagged ‘barcode technology’

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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dms_keeping_WPIn our prior post we looked at the basics of RFID as a possible tool in data (or inventory) management as applies to a shop floor environment.  Given the pros and cons of RFID (the cons mostly falling into the cost category), let’s turn our attention to barcoding technology next.

Again, we’re borrowing from our friends at DMS whose white paper on the subject is found here.

In terms of cost (as in low), complexity (as in simple) and universal acceptance (in manufacturing, it really is everywhere)… you can’t beat barcode technology.  More varieties (2-D, 3-D) are becoming available, and they’ve long been available in a number of different (usually industry-driven) “symbologies.”  Increasingly too, more and more data can be packed onto a barcode label.

In addition, most ERP systems have at least some form or rudimentary barcode capability or recognition built in, or at least, easily integrated.  As well, there are many available hardware and software options, thus keeping costs manageable.  This extends to handhelds as well which, while not “cheap” are certainly cost effective, and pack a lot of technology into a small and efficient footprint.

Barcodes can come in the form of labels, stamps, tags, Teflon-coated (dirt-resistant), large format (for higher shelves, say) and small format (in-line scanning), polyester tags, high-temperature resistant tags, and more.  Newer technologies involving data matrix layouts permit more data to be stored in the tag than ever before.

So… when it comes down it, which do you choose, RFID or barcode?

A number of studies have been conducted on the topic, and one out of the Univ. of Western England concluded “… while RFID can deliver improved operational performance over traditional barcode systems, it is found to be less reliable in implementation.”  Studies have found that while processing times with RFID can be quicker, they were less consistent, and that RFID produced higher error rates.  And given RFID’s higher costs and technology requirements, barcode still appears to be, as the DMS white paper describes it, “the most practical and accessible way to automate warehouse and industrial processes.”

While both technologies have seen gains since the study, barcode remains the “ubiquitous international standard for product tracking.”

As DMS notes, regardless of what technology you choose, the benefits can be very significant in key areas like:

  • Rejection and rework
  • Processing times
  • Entry errors
  • Manufacturing costs
  • Sales per employee

In our next post, we’ll take a look at the benefits of using barcode in inventory management.

Finally, we’ll conclude in our final post in this 5-part series with some thoughts on practical matters like where to barcode, and expected payback periods.  Stay tuned…


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dms_keeping_WPWe’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…



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Today we start a five-part post on data collection and barcode, for those interested in the basic What, Why and How of data collection.

Our friends at Dynamic Manufacturing Solutions (DMS) in Canada, (a provider of add-on products for Microsoft Dynamics NAV ERP systems with whom our firm partners) recently created an informative white paper that nicely highlights some of the opportunities and advantages inherent in the application of “mobile technologies” including barcoding and RFID.  We thought we’d reprise a few highlights for our readers in our next series of posts.

Their white paper, entitled “Keeping the Physical World and Virtual World in Sync: Improving Efficiency with Barcode Technology“ can be downloaded here, by the way.

The whole topic of “data management” has become crucial to business today.  In the manufacturing and distribution environments, data that is well managed can become a key competitive advantage.  Properly implemented, shop floor data collection systems can dramatically improve order accuracy and inventory visibility while reducing shipping and billing errors.  In the long run, companies that make mistakes lose market share, plain and simple.  Automated data collection systems remove this obstacle, when properly implemented.

Our own experience implementing these systems over the past decade or more reinforces this point.  On the other hand, poor data management can result in a host of bad results.  DMS points out a few:

  • Inventory Overstock
  • Expedited Purchases (rushed, last-minute order fulfillment usually in a panic)
  • Lower Than Expected Margins or Lost Receivables
  • Decreased Shop Productivity
  • Increased Office Overhead
  • Poor Customer Service

Shop floor data collection solves these problems with typically rapid ROI and cost recapture.  Today’s systems are relatively inexpensive, very cost effective, and have short payback periods.

But we always caution our clients up front: Can you define exactly WHAT you want from barcode?  Can you define WHERE it will be applied?  Where will it make your operation more efficient?  It becomes critical to implement the system that, as DMS puts it “accurately reflects your business processes to ensure you receive the most from your productivity investment.”

We’ll get into the Hows and Whats starting with our next post.  Stay tuned…


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Heard about QR barcodes?  If you’re an avid smartphone user you may have already downloaded a QR reader ap – there are plenty of free ones out there.  If you haven’t seen them yet, it’s likely you will.

QR (Quick Response) barcodes are an easy way for companies to connect you to more information about their products.  The square-shaped codes look a little like a Rorschach test gone checkerboard.  But scan one with a QR ap via your smartphone’s camera and you’re connected to whatever content the product’s manufacturer chooses to provide you.

As a simple example, I recently snapped a photo of a QR code in a magazine and it directed me to a full article reprint on their website.  Admittedly, that’s a rudimentary application, but it gets you started.  The idea is that it’s easier for a consumer to snap a barcode photo than to type in a URL on a cell phone (once you get the hang of centering your shot in the software’s frame).

It’s not a stretch to envision that link taking you to a product demo video, a price comparator, or some other more compelling content.

Two companies, Microsoft and Ricoh Innovations make tag applications which create customizable 2D QR barcodes that can be placed on ads, posters, packages, magazines, websites, even billboards or clothing to link customers back to chosen content.

The idea is to engage customers in meaningful ways – to draw them a little more deeply into your designated user experience.  Of course, compelling content will be the key here.  It’s another new way to merge the real world with the digital one to provide a more meaningful user experience. 

Such barcodes may only be a step along the way, a gateway perhaps to a phenomenon gaining ground lately called ‘visual search’.  With visual search, you point your device at an object and it collects the predominant physical or natural characteristics of that object and then searches the web based on those characteristics.  As one industry player said, “it’s like barcodes without the barcodes.”

Still, pointing a piece of hardware like your smartphone at a physical object as a springboard to search and a broader user experience is pretty powerful stuff.  Useful, too, as marketers learn to exploit the possibilities to be found at the intersection of the real and the digital.

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