Visit our website

January 2014

Bar Coding: Is it the Holy Grail?

It seems to happen regularly. I am called in to visit with a prospective client. They are having some sort of inventory problem or struggling with warehouse productivity. We discuss their issues and needs. I even get a guided tour of the warehouse. Then, invariably, I get THE question. �How about bar coding?�

In many of these cases, the company is operating with a very fundamental software system, perhaps something as basic as QuickBooks. Either the system does not provide inventory management functionality or (if more sophisticated software is in use) that functionality has not been implemented, or is being used incorrectly.

Jumping, rather catapulting, into a bar coding environment is a quantum leap -- like throwing a person into a pool who can barely swim free style and asking them to swim a medley � free style, back stroke, breaststroke and butterfly. This leap cannot be done without purpose and training. And, as we�ll explore shortly, the leap should be aligned to both the current and longer term needs of the company.

Bar coding seems to have a certain cachet about it, particularly to those who have had limited experience with the process. For the right purpose and in the appropriate environment, bar coding can provide these extraordinary benefits to warehouse operations and performance:
  • Improved operational efficiencies
  • Reduced errors
  • Decreased costs
  • Time savings
  • Information reliability

But like that baby, gotta crawl before walking, much less sprinting. There are so many elements to consider before plunging into the world of bar coding.

First and foremost . . . why? What are the compelling strategic reasons to employ bar code technology and processes? Will operations become more efficient? Are customers demanding its use? Will costs decline and productivity soar? Is it a want rather than a need? The decision to employ bar coding is not unlike most other business decisions. It MUST be made only after a thorough analysis and alignment with strategic goals. It must be a decision that considers these factors:

  • Systems/ Technology � Can current software and technology support bar coding efforts? If the functionality is not available within the system(s) in use, then what? Upgrading existing software? Identifying bolt-on inventory management applications that will enhance present software? Or might it be necessary to start fresh with a whole new system?

    And then consider the hardware changes needed to meet the requirements of bar coding efforts. In many cases, existing hardware cannot support the software. These changes go beyond replacing the server box in the IT room, and include equipment like scanners, readers, wi-fi, printers and monitors that will need to be purchased.
  • Processes � With the implementation of bar coding will come modifications to current processes, the extent determined by the amount of change involved. Think about how many times the bar code is likely to be read � upon receipt of goods, when inventory is placed on the shelf, when the item is pulled, when packed, and so on. Many items arrive without a bar code. How does the code get on the box, or the individual item? Bin locations could require a code affixed to the shelf for receiving and picking validation. How does that get done? There is more to the transition than is generally anticipated.
  • Staff / Labor � Can the current staff adapt to the new ways? Sometimes yes, but frequently not. In a manual environment, current employees operate satisfactorily. Layer in the sophistication of the new processes and some might not be able to adjust. Or it might be necessary to hire different management staff experienced with bar coding systems. Either way, there�s a learning curve. Staff disruption is quite possible.
  • Cost � Each step along the way will have associated expenses, an investment that, depending on the starting point, could reach into the six figures. Just consider the costs associated with these steps. Preparing a budget that thoroughly identifies all areas of expenditure is a necessity. Do not move blindly forward.
So what is the message? Bar coding is not for every company at every stage. But it is for some. Carefully evaluate. The Internet is full of information about bar coding and its implementation. Consult professionals who are experienced in this discipline. Talk to associates in your industry and at your trade association events. Have them share their experiences.

Remember that swimmer who, over time, learned to be skilled in multiple disciplines? First was the basic free style, then the next discipline, then the next until all were achieved. Bar coding may be the last step taken in efforts to improve inventory management processes. Because it is not the right solution today does not mean it will not be the right solution later on. Crawl before you walk, and take each step only after deliberate planning.

Read this article on our website

View the newsletter archive

I welcome your comments at [email protected].

You are welcome to forward Keys to Profitability to colleagues as long as you credit the Schwartz Profitability Group and its source at

If this issue of Keys to Profitability was forwarded to you, you may begin getting your own by sending a message to [email protected].

Driving Profitability by Uncorking Operational Bottlenecks for Manufacturers and Distributors

Manufacturing Nugget of the Month

Industrial manufacturers are optimistic about revenue gains in 2014. Do you share their optimism? Click here to learn why they�re so confident.

Distribution Nugget of the Month

Wholesale distribution is transitioning to a more data-driven mindset. Learn about key trends by reading MDM�s State of Analytics in Distribution report.

About the author

Lee Schwartz, Principal and founder of the Schwartz Profitability Group (, is a consultant, author and speaker who has been uncorking operational bottlenecks for manufacturing and distribution companies for almost 13 years, saving them time and money, and boosting their bottom line. His consulting and operational turnaround work helps clients find solutions related to process improvement, supply chain management, inventory control, workflow design and operational performance improvement. Prior to launching his consulting practice, Lee spent over 20 years with manufacturers and distributors, many in senior management positions of CEO and President. Lee can be reached by phone at (310) 450-2628 or by e-mail at [email protected].

View my profile on LinkedIn

Copyright © 2001-2014 by the Schwartz Profitability Group.
All Rights Reserved.