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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
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 lee@schwartzpro.com.
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Driving Profitability by Uncorking Operational Bottlenecks for
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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.
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Distribution Nugget of the Month
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About the
author
Lee Schwartz, Principal and founder of the Schwartz Profitability
Group (www.schwartzpro.com),
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 lee@schwartzpro.com.
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1-310-450-2628