Technological advances over the last few years have revolutionized the way we do business, and warehousing, just one part of the supply chain that helps companies move their inventory from raw goods to finished products on customer doorsteps, is no exception. The use of mobile devices, cloud computing and automated software has made supply chain management more efficient than ever, and yet the crux of these changes is a technology that has been in widespread use since the 1970s: the barcode.
More than just a helpful front-end tool, both simple traditional barcodes (the series of lines and spaces often seen on retail items) and more complex 2D barcodes (QR codes that can do everything from hold photos to send users to a webpage for more information) are incredibly cost-effective and useful for building a comprehensive inventory management system.
Barcode technology can be applied to a myriad of uses throughout your warehouse, from warehouse paperwork to individual employee ID to facilitating the movement of inventory into and out the door. There are three main ways in particular that barcodes save money and increase efficiency for your business.
1) Time management
Barcodes are simply a more time-efficient way of imparting information about your inventory to the rest of your business. It takes only a few moments to scan a barcode, and the same amount of time to pull that information back up on a computer when needed. Compare that to scribbling all warehouse data on a notepad (or typing it into a mobile computer) and then cross-referencing that with information recorded by other employees, and the process of finding a single item in a massive warehouse can take entirely too long, even a few minutes per product adds up to unnecessary sunk hours.
Barcode scanning can also help improve employee performance and productivity. Key performance indicators such as high inventory turnover, order accuracy and low carrying costs can be tracked closely using barcode scanning, which allows the company to set benchmarks for employees to reach and easily access the data to see if they were met. Employees that aren’t working as efficiently as you know they should can be held accountable, and most importantly be helped to improve.
2) Accuracy
Accuracy in a warehouse can save a company thousands. Manual processes for recording inventory is almost guaranteed to have errors: Skilled typists will make an error every 300 keystrokes, meaning that many items will be improperly labeled and perhaps misplaced or lost, or even worse, mistakenly shipped out to a customer who is expecting something else. Not only is this a massive drain on your workforce’s’ time and energy, but the hit to your company’s reputation can be irreparably damaged when customer satisfaction takes a hit.
On the other hand, a barcode-powered system can do everything from help balance your inventory turnover ratio to safeguard your products from employee theft. Both of these benefits can help reduce the true cost of carrying inventory, which includes holding costs (such as warehouse rental fees and security fees) and stock-out costs (such as emergency shipping fees).
3) Durability
Warehouses can be brutal environments. Some are subject to extreme temperatures, others are especially dry or humid and some hold on to inventory for extended periods of time. All of which can affect the readability of the labels attached to them. Barcodes, depending on the way they’re produced, can be highly resilient. They are applied to all kinds of surfaces (rough, waxed, wet, angled and so on) and resistant to a variety of chemicals as well as rips and abrasions. Investing in a barcode label for your product is never a waste, especially if you’ve resorted to keeping track of code numbers with simple paper and pen.
No company better exemplifies the power of a barcode-based system than Amazon, perhaps the most successful retail company of all time and certainly of the present. Amazon’s entire business model, to ship nearly anything to anyone at any time, and to easily facilitate returns and repeat purchases in order to best serve the customer, is made possible by barcodes. Ad consultant George Parker wrote about this in an article on Business Insider:
Perhaps the thing that impresses me most about Amazon’s unconventionality is its ability to structure its business model in unexpected ways. Because of the massive volume of product it sells 24/7/365, Amazon maintains 80 enormous warehousing and fulfillment centers scattered around the known universe.
These multi-football arena sized premises take care of sourcing, organizing, packing and shipping millions of orders a day… And surprisingly, they do it with a vast number of workers who use simple barcode scanners to find, and expedite on its way, any item in the warehouse.…
There isn’t a single robot in the place.
In fact, Amazon uses barcodes and barcode scanners so effectively that they can engage in “chaotic storage,” where incoming items are placed seemingly at random on unoccupied shelves. Because each item and shelf has a barcode, the computer system knows exactly where that inventory is located. This allows for more flexibility, more efficient use of shelf space and saves time in terms of how far employees need to go to find items, as well as how long it takes to train new employees.
While chaotic storage isn’t the right system for every business, it’s a testament to the power of the barcode: it allows a company that ships out billions of products per year to engage in what is seemingly “random” warehousing practices. In actuality, Amazon operates at peak efficiency, utilizing a well-worn and low-cost technology that nearly any other company can adopt.
Sometimes the simplest answer is the right one, and that’s certainly the case for barcodes, which are the building blocks of even the most complex and profitable inventory management systems in the world. Warehouses seeking to address issues of organization, accuracy and durability, not to mention other factors like scheduling and shipping/receiving, would be wise to consider the power of the humble barcode.
How would implementing a barcode inventory system in your warehouse help your employees save time when filling orders?
