The most obvious example of bar codes is on consumer products such as packaged foods. These codes allow the products to be scanned at the check out counter. As the product is identified the price is entered in the cash register while at the same time internal systems such as inventory and accounting are updated.

The special value of a bar code is that discrete objects can be identified at any point where a stationary or hand held laser scanner can be employed. Thus the technology carries tremendous potential to improve any process that can benefit from tight control of material flow. Good examples would be shipping, inventory management, and work flow in discrete parts manufacturing.

Stage: Awareness Training | Bar Coding Questions

Any EDI that reports on material flow can be improved with the use of bar codes. The prime example is the "advance ship notice" (ASN, X12 transaction #856) which suppliers use to let customers know when a shipment is on the way. As a shipment is assembled bar codes can be used to keep track of each component in the shipment. Then a bar code on a box or a pallet can be scanned at the shipping dock to automatically configure the ASN with correct information and to trigger its transmission to the customer. For good measure, the bar code data might also be used to prime internal systems. For example bar code data might tell an accounting system that a shipment went out.

Stage: Awareness Training | Bar Coding Questions

The Uniform Code Council, Inc., a not-for-profit organization whose role is to administer the Universal Product Code (U.P.C.) used in wholesale, distributor, industrial/commercial and general retail applications, maintains a directory of consultants. The list is very long and can take some time to load. It is sorted alphabetically, so you are going to have to search by state or city to get local consultants. Also, the listing does not indicate areas of expertise and many of the consultants listed may be limited to retail applications.

Stage: All
Resources

• Awareness Training
• Business Analysis
• Requirements Analysis
• Design
• Implementation
• Integration and Validation
• Maintenance

Bar coding can increase productivity by making it practical (i.e. fast and inexpensive) to exert precise control over any business process whose efficiency depends on knowing where things (or people) are. Examples include:

• Lot and parts tracking
• Fixed asset tracking
• Time, attendance and labor reporting
• Automating warehouse operations including receiving, storage, picking and shipping
• Document tracking
• Access control
• Tool crib and spare parts control
• Invoicing
• Production reporting
• Inventory management
• Shipping notifications

While bar coding may seem to be an exceedingly simple and useful technology, an important caution must be observed. Bar codes are really nothing more than a convenient method of data entry. It is a method with no value unless there are systems to receive and process the data. Data bases must be maintained. Applications must process data in ways that will produce useful information. Ideally those applications will also be integrated so that data from one can prime the other. (As an example, will bar code data on inventory simply inform people on what supplies are low, or will it automatically generate an EDI transaction?)

Stage: Business Analysis | Bar Coding Questions

You first have to understand the significant cost drivers affecting both your relationships with your trading partners and internal operations. INSIGHT, an independent support group for present and future users of Bar Code and other automatic identification technologies, has developed an excellent quiz to determine if you should consider Bar Coding to solve specific problems.

Summarizing the quiz, Bar Codes may be useful in reducing the following cost drivers in your relationships with trading partners:

• Do you lose sales because your inventory incorrectly reports that a product is not in stock when it really is?
• Do you ever deliver late because your inventory incorrectly reported that you had a product but you didn't? Do you lose customers because of this?
• Are your customers insisting that you bar code your shipments?
• Could you increase your sales by voluntarily offering to bar code your merchandise?
• How often do your pickers encounter "Unexpected Stock Outs" (USO) or "not there's" and what are the consequences? Do you measure how often this occurs?
• What effect would eliminating "USO's" have on your operation? Could you increase the number of picks per hour? Do you lose sales from "not there's"? Do you purchase product from competitors when this happens? Do you incur extra transportation charges?
• Do your customer service people physically verify stock counts before making a delivery commitment because they don't trust the computer inventory? What impact does this have on their productivity?
• How many shipping errors do you make due to picking or packing errors that could be caught with a bar code assisted picking or shipping verification system? Do you measure shipping errors?
• Is invoicing delayed because of the volume of data entry at the end of the month or the quarter?
• Does your sales force spend valuable time apologizing for service problems instead of selling?
• Do you ever make special deliveries to correct delivery errors? How much could you reduce this cost if you made fewer errors?
• What do you spend in rush freight charges because your inventory incorrectly reported that you had product but you didn't?
• Are your customers demanding EDI Advanced Ship Notices?
• Do customers delay payment on invoices containing errors? Does this happen often and how much administrative time is spent on this? How are cash flow and borrowing costs affected by this?

Bar coding may also be appropriate for the following kinds of internal cost drivers:

• Do you have warehouse to warehouse transfers? How many are caused by an inaccurate inventory? What does each transfer cost your company?
• Do you close your business to take physical inventory? Do you lose sales when you close?
• Could you increase your manufacturing throughput by replacing manual production reporting systems?
• Could you increase inventory turns by improving the accuracy of your inventory? Do you have "fear" stock to compensate for inaccuracies in your computer inventory?
• Do you employ production expediters that do nothing but physically track down work in process?
• Do your production supervisors spend time filling out time cards? What value added activity could they be performing if they didn't have to do this?
• Do you stop production to count your work in process inventory? If you didn't have to stop, would you ship more that month? i.e. Do you have a backlog of orders?
• Are you ever forced to stop production or switch from one product to another because your inventory system incorrectly reported the quantity on hand? Do you track how often this happens?
• How much time does your work in process inventory spend in between value added operations? This is "inventory at rest". Could you reduce manufacturing lead times if you knew where and for how long work in process sat idle?
• What does your company spend on forms used solely for manual data entry? Could this cost be eliminated with a bar code data collection system?
• Do you know how much manufacturing labor was actually spent on a given order and can you accurately allocate overhead to your work orders?
• You have to take inventory periodically. Could you reduce the cost of taking inventory by using bar code? Could you make it painless enough to start cycle counting in order to gain better control of your inventory.

Stage: Business Analysis | Bar Coding Questions

The basic hardware and software elements of a bar code system are:

• Data collection equipment, such as hand held or fixed-position scanners
• Fixed or portable data collection hardware, such as display terminals, scanners and controllers
• Printing equipment, such as bar code printers and printer related supplies (e.g., paper labels, thermal transfer ribbons), bar code verifiers
• A network
• A host computer
• Software for data analysis (application generation) and bar code printing and label generation

Stage: Design | Bar Coding Questions

Quoting from the ISIT (Integrated Solutions for Information Technologies

The average cost of a stand alone PC system utilizing 1 or 2 personal computers and several bar code scanners could be obtained for less than $15,000. Enhancements to existing computer systems could start as low as several thousand dollars. Interface software will be the most expensive aspect of enhancing your present computer system for bar coding. The actual costs depend on the type of hardware you are currently using, the number of scanners that you may purchase, and the complexity of the application.

Stage: Design | Bar Coding Questions

Maintenance costs are generally relatively modest, depending primarily on the robustness of the technologies employed, mainly the scanners and printers, and the complexity of the application.

Stage: Maintenance | Bar Coding Questions