This is the conclusion of our two-part post about improving your warehouse through better data. As we pointed out in our prior post, having a decent Warehouse Management System within your ERP system is not enough – it needs to run with accurate data. The answer: barcoding.
In our prior post we reprised comments from Insight Works’ Brian Neufeld regarding how barcode scanning is the best choice for warehouse goods tracking. As Brian notes:
- Barcode scanning efficiency results in more frequent inventory and cycle counts, and faster cycle counts can improve data accuracy which also improves productivity and fill rates.
- Order fulfillment is more accurate, ultimately improving shipping times and customer satisfaction.
- Warehouse managers see a reduction in necessary labor time, so barcode systems can pay for themselves after the first annual count.
How? Well, in a manual environment, ONLY with great effort. Inventory counts performed outside regular hours and requiring overtime are often required to collect, record, check and input the data. It can take days, as we’ve seen with some companies. And the counts are still subject to many errors.
With barcoding, employees utilize handheld scanners to scan bin numbers, and 2D labels on products and bins make unit counts quick and easy. Counts can be entered into the scanners when required, and each employee is a unique (and accountable) scanner/counter. Scanning can cut inventory count times by up to 90%.
As always, it comes down to cost, but here, the news is mostly good. Most barcode solutions, once successfully implemented (and yes, there is time and a learning curve and some integration to be considered) can yield a payback with a relatively quick ROI — especially when you’re saving up to 90% of the time-value of those costly and tedious inventory counts.
A consultant can help you determine answers to issues like selecting the right barcode method, the right devices (fixed or mobile), and the right formats, labels and media. The cost recapture on the savings from reduced data entry errors, reduced picking errors, and especially from reduced inventory, can add up much faster than most people realize. The combination of savings in a typical warehouse can run into the tens of thousands of dollars in savings in very short order. We’ve seen it often.
In the end, it’s not a question of “if” you should do barcode, but “when.” You have to crawl before you walk before you run, as we often like to say. It’s not usually the first warehouse project we tackle, but when your WMS and ERP and inventory systems are ready, it can be one of the fastest and biggest payouts you’ll find inside your company.
Sounds like a great way to start the New Year, doesn’t it?