The data contained in a barcode is typically tied to things like a SKU or a purchase order. Once scanned, this data is accessed and displayed for the user to learn more information or take an action.
A barcode on a shipping carton can identify the order and access information such as products in the carton, customer name, delivery address or mode of shipping. Barcodes on documents like purchase orders or return documents can retrieve the appropriate record from the server.
Shipping and manifesting systems have used barcodes for a long time, but not to their full potential. In recent years adoption is increasing as merchants find they can dramatically reduce costs and increase control of their fulfillment center operations.
Barcode let you track the “what” “who” and “when” for all activities within your FC. Many of the merchants we work with use in areas such as receiving, put away, replenishment, picking, packing, shipping/manifesting, returns, cycle counts, value-add functions and labor tracking.
For managers not involved in system selection and implementation, it’s important to understand that barcode marking and scanners without the integration to WMS or a standalone inventory system are of no value. Barcode technology is vital to maximizing the benefits of a WMS.
Here are 11 ways we’ve found that barcode can provide greater operational efficiency, cost savings and a good ROI:
Increased Speed and Order Throughput
Shipping a high percentage of orders on the same day is very difficult without barcode scanning of inventory and all key processes. If your business is in growth mode, it is essential.
Decreased Clerical Costs
Fulfillment centers which don’t use barcode for scanning and data capture are very manual and require workers to key all activity documents, including receipts, inventory transfers between locations, cycle and physical counts and returns.
Clerical keying of the manual source documents leads to data entry errors from illegible or misinterpreted handwriting and data entry keying errors. Handwritten documents and keying have a couple percentage points of error, whereas barcode scanning is 99.9999+% accurate. On average the accuracy of barcode scanners is 1 error for every 70 million pieces of scanned information.
Better Inventory Accuracy
Inventory is one of the single biggest balance sheet assets in multichannel businesses. Most warehouse management systems (WMS) have tight inventory audit trails. You can access all inventory locations a SKU is in and has been in. And you can see what products have been stored in every inventory location. Barcode scanning inserts an employee number/date/time stamp on every transaction. The two technologies together enable you to lock down accuracy to 99.9% or higher.
Cycle counting accuracy often allows you to eliminate physical counts, resulting in substantial savings after the accuracy is proven out. Better control leads to faster inventory turns and less cash tied up in idle inventory.
In addition to inventory management, you can use barcode to scan purchase order headers and retrieve PO records; pick tickets; returns processing from labels and order documents to access customer records; individual employee identification; and production identification on individual SKUs, cartons or pallets. Each zone, aisle, level, bin and slot should be barcoded for tracking inventory movement through various processes and locations.
Better Labor Management
Barcode data capture of activities, data and time stamp by employee allows tracking of employee performance, enabling better productivity measurement, reporting and labor scheduling.
Handheld scanners allow data capture of inventory location throughout the supply chain, and identifies where activities are happening, such as through use of forklift-mounted scanners.
Security of high-value goods is assured with barcodes. Pack verification by scanning products into the carton increases order accuracy, leading to higher customer satisfaction and eliminating mistakes.
Reduced Training Time
A barcode system can reduce employee training time. It takes only minutes to master the handheld scanners vs. learning from a written procedure manual.
A Foundation for Future Efficiency, Automation
Barcodes are the central technology to for all automated and advanced sortation, conveyance, robotics and voice-based systems. In this previous post we wrote about why barcode is one of the four foundational prerequisites to getting the most out of a new WMS.
The technology continues to decrease in purchase price. Many smartphones now include apps that scan and interpret barcodes. They are not as durable as gun-type scanners but are considerably cheaper and lightweight for various kinds of data capture by associates and line managers.
Improved Dashboards and Management
There is tremendous data available throughout your FC operations but much is paper-based and hard to access. Barcodes and WMS give you real-time data capture of major functions, allowing line managers and fulfillment directors to be more proactive. Merchant companies can no longer afford to manually key all the data in a timely manner.
To sum up, barcodes are a critical technology for reducing costs and increasing order throughput at your FC and across the supply chain, now and in the future.
Brian Barry is president of F. Curtis Barry & Co.