Inventory & AIDC Software Blog

Reduce the Cost of Taking Inventory

December 2009 Inventory Tip: Get Inventory Right!

Are you required to take a physical inventory? Are you one of those countless small and midsized businesses that spend hours taking physical inventory by hand with pen and paper? We feel your pain. No matter the size, a small one-person shop or a full warehouse, the process is all the same. Taking inventory is a tedious, time-consuming process and if you are using paper you open the door to human error.

One of our client's stores material for a manufacturer. They deliver the material on demand to this customer. They are required to supply detailed inventory of available material to the customer monthly. Their customer depends on that count to support their lean manufacturing practices. To our client that meant shutting down the warehouse, bringing in the crew, paying overtime and counting over a quarter million individual items. Their problem was solved with a Warehouse Management System (WMS) using barcodes for locations, tracking inventory receipts, moves and shipments using Wireless Portable Data Collectors. The result is that the reduction in time spent taking inventory was 60%. This was achieved by using a mix of cycle counts and only one yearly physical. Inventory accuracy soared to 99.8%.

You do not need to be a big warehouse to utilize an inventory counting system; the technology doesn't have to be expensive. Think about this. Another client of ours runs a small chain of restaurants who, weekly needs to count inventory to determine the next week's bulk food orders for the chain. The only concern was to know what is in the supply rooms now! Each week with paper order slips, a laptop with an excel spreadsheet, the client headed out to take inventory.  It easily consumed a twelve-hour day. Several problems were generated using the manual system and the most important was mistakes in ordering which often resulted in running out of product or worse, the amount of food going stale which needed to be discarded as spoilage.

The solution was a very simple inventory counting system, IntelliTrack Inventory. By implementing this solution using barcodes and portable handheld terminals, the client was able to assign the task of taking inventory to restaurant managers. In addition, each restaurant manager is in charge of setting minimum and maximum inventory amounts. Managers receive an incentive to keep items in stock while reducing spoilage. Three things occurred. First, the reduction in spoilage was over 85%. Over all, inventory is in line with customer demands and this reduced inventory levels for many items in the restaurants. Bulk supply cost is lower. The most important gain in the chain was that food was fresher and the customers noticed! Business grew and the chain is expanding. We do not claim to take credit for everything after all you have to start with good food in the first place. 

To summarize, anytime you use a paper-based system you open yourself up to "human error" and "human decisions". A barcode inventory system is a smart technology. These barcode based software systems allow customers to see available on hand inventory, compare minimum and maximum levels of inventory, control inventory levels and establish reorder points. They reduce loss and limit human error. Small or large, any business can benefit by using this technology over paper.
 
That! Is the way to get inventory right!

-Will Daniel, COO IntelliTrack, Inc.

Electronic Data Interchange (EDI): Increases Efficiency for Small Business

November 2009 Inventory Tip: Making EDI Simple

Do you run a small fulfillment warehouse? Are you under increasing pressure to provide better services and inventory tracking? Do your customers want EDI fulfillment, real time web based access, the ability to automate the overall fulfillment process. If this sounds familiar then you are one of the many small 3PL providers that are under increasing pressure to provide technology to allow your customers to increase their service levels to their customers. 

EDI does not have to be a difficult or expensive process. Common transaction based services from EDI providers like, 1 EDI Source and GSX Desktop EDI lower the overall cost of EDI implementations for smaller fulfillment warehouses. These applications provide the mapping tools that allow the collection and response to multiple EDI formats.

However, EDI is only half the picture. EDI service products are capable of integrating into back office applications like IntelliTrack ISRP and IntelliTrack WMS and that creates not only customer efficiencies but provider efficiencies as well. This integration streamlines small fulfillment warehouse processes at a very affordable cost.

The IntelliTrack EDI fulfillment Model:

In the example above, we see multiple EDI formats intercepted and responded to by the EDI software. Because the software supports full import and export capabilities to back office applications the exchange of data between the two systems is accomplished using simple delimitated text files. This type of interface significantly lowers integration cost. What does this mean? It means that with proper thought and planning any small provider can offer the same or like services larger operations provide for their customers.

To summarize, you should never feel you cannot compete in this advanced fulfillment environment. Low cost transaction based EDI servers integrated to IntelliTrack products such as ISRP, WMS Standard and I-View make you just as competitive as anyone else! More importantly, you can sell to your customers your ability to serve them and their customers.  

That! Is the way to get EDI right!

-Will Daniel, COO IntelliTrack, Inc.

Questions? Ask IntelliTrack.

 

Badly Printed Barcodes Waste Time & Time Is Money

October 2009 Inventory Tip: Barcode Printing Tips

There are three pieces of technology when considering implementing a barcode supported software application like IntelliTrack. The first is the software where the data is stored. The second is the portable or barcode scanner that scans the barcode to pass the collected data to the database. The third is the barcode itself.

The barcode is an essential component of the solution! It is contrast driven. The blacker, cleaner, more defined the barcode is on a white background the more efficiently it is read. The other more important consideration is the size of the label in regards to how far away you need to scan it. Why is this important? Every minute a user spends scanning and collecting data more efficiently is a savings in labor to you.

So why do many customers short-change themselves when it comes to printing barcodes? It sometimes feels like the barcode printing process is the afterthought instead of the piece of technology that ties the solution together.

Common Problems & True Stories

• Wrong Printer Type: A customer called in with a problem. "There's something wrong with your software!" "My scanner can't read the barcodes you (IntelliTrack) print".
• The facts: The customer was using an old laser printer that not only did not have a high enough resolution it was leaving a dark residue over the label. Not enough contrast.

• Bad Maintenance: A customer expressed concern that the label program in our software failed. It once worked fine. I actually went on site for this one. Arriving at the customer we went directly into the warehouse and the customer showed me a label grabbed a scanner and tried to the scan the label, bad scan!  The label looked good, nice white background good black thermal image. There were no lines running through the barcode and the customer was using a recognized barcode printing program.
  • The facts: The customer showed me the printer that printed the labels, a Zebra 105SE. For those in the know the 105 is a recognized industry standard warehouse print workhorse. I opened the case and it looked good. The printer did not appear dirty or misused. Then I saw the platen. Now the platen is the roller just under the print head that the label presses against as it comes out of the printer. The purpose of the platen is to ensure an even surface for printing. The customer platen had a label wrapped around it. To be more specific it had several labels wrapped around it. Like 10! Well this was not an even surface for printing and the extra diameter of the platen distorted the label just enough so that it was unreadable by a scanner.

• Wrong Size: A customer called in asking for help. Their team was having a heck of a time taking inventory or picking orders.
  • The Facts: The customer had an asset-tracking program and had several thousand blank asset labels they wanted to use. They were .5 inch by 1.5 inch. Instead of labeling the supply room with larger labels the customer used the asset labels and employees literally had to be 2" inches away to read the barcode that not only was printed two small were printed on label sheets out of an inkjet. Very wrong label size and wrong printer

To summarize, it never pays to take shortcuts with the technology that you expect to increase your efficiency. When printing barcodes do yourself and your employees a favor:

• Use a printer designed to print barcodes
• Use labels that are correctly sized for your environment
• Keep your printer clean and maintained by following manufacture maintenance guidelines.

You do these three simple things and the investment you made not only in your application but also in the equipment you invest in will save you time and labor. 

That! Is the way to get barcodes right!

-Will Daniel, COO IntelliTrack, Inc.

AIDC Distributor, BlueStar, Inc. helps out with AIM memberships

In the AIDC industry, AIM is known as the "Association of Automatic Identification and Mobility" (Not AOL Instant Messenger). http://www.aimglobal.org/technologies/barcode/

BlueStar, Inc. is currently offering it's Resellers $300 towards their AIM membership fees when they sell at least one software license from a BlueStar software vendor by December 31, 2009. BlueStar distributes data collection and mobility software internationally.

Is anyone currently a member of AIM? What are some of the benefits you've experienced from becoming a member?

September 2009 Inventory Tip: Get Picking Right!

This is a true story. My wife and I remodeled our kitchen last year and we did a lot of the work ourselves. One of the tasks we took on was putting new hardwood into the kitchen and dining room. We ordered 500 square feet of Bamboo Flooring from a local distributor and set up a pick up date.

We arrived at the floor distributor, wrote out a check and took the truck around back. The picker had the order ready and wrapped and dropped the load neatly in the back of the truck. It was a big pallet load! We quickly got back to the house and started unloading the truck and I was thinking it looked like we had too many boxes of flooring. It just did not look right.

I checked my invoice and the order was for 56 cases with each case containing about 9 square feet. I counted the cases and we had 86 cases. The picker had loaded 30 extra cases of flooring at a value of a little over $800.00. The picker's mistake was transposing the 5 into an 8 and the picker didn't double check. In this warehouse, all of the picking transactions are done using paper invoice copies printed on a dot matrix printer and trusting the picker to do the job right!

Immediately the little devil on my left shoulder started whispering in my ear to keep it. After all no one reports when we ship out too much.  My ethics finally got the best of me and I pulled off the 56 cases, left the 30 cases on the truck and went back to the distributor. They were stunned of course that we returned the over pick and when I asked them about their shrinkage and unaccountable lost inventory they estimated a little over $200,000.00 a year.  This is not a large company but they were producing a large loss.

To summarize, anytime you use paper-based systems you open yourself to "human errors" and "human decisions". A barcode inventory system is smart technology. These systems direct users in their activities and ask for validation. They have fundamentally altered the way knowledgeable companies operate by reducing loss, customer service errors and management frustration. Every company should investigate how barcode technology interfaced to smart inventory software can help you curb and stop your losses.
 
That! Is the way to get picking right!

-Will Daniel, COO IntelliTrack, Inc.

August Inventory Tip of the Month: Evaluate Your Buying Habits

It doesn't matter if you are big business, small business, an institution or you are the person that everyone comes to for office supplies the result is the same. When it comes to inventory, someone has to pay for it and that means spending. Inventory is money! It is not a widget, a yellow pad or a Chrysler Minivan, its cold hard cash. Truth is, when we have more of one thing than we can sell, distribute or consume in a reasonable time its money that we could have used far more effectively somewhere else. You can call it velocity, inventory turn or whatever as long as the commitment is to shorten the amount of time that material is tying up your revenue. Do not worry about supply. Both supply and pricing are stable and adequate in this economy.

3 Basic Inventory Buying Controls

1. Know what you have!  It is extremely important that you have a firm grip on what material you have in stock today and the accuracy of the Inventory information.

2. Know your lead times! Some of you with simple requirements can resupply in hours, some of you not so fast.  Lead times negatively influence your internal supply and the tracking and monitoring of lead times will positively affect stocking value by reducing inventory and freeing up capitol.

3. Know your velocity! If you know your lead times, you can control your inventory velocity. If you know your velocity, you can re-evaluate and provide corrective changes in your minimum and maximum inventory values.

To summarize, if you can control your minimum and maximum inventory values you can regularly adjust your re-order points. If you can control your re-order points you can increase your warehouse turns. If you can increase your warehouse turns you can control your spending and align it to the service levels required by your internal or external customers. If you can provide a continuous level of service to your customer, you will positively affect your spending and profit. That! Is the value of good buying habits!

Content submitted by: Will Daniel, COO IntelliTrack, Inc. 

AIDC - What is it?

AIDC- Automated Identification and Data Capture.

There is a decent definition on Wikipedia for those unfamiliar with the AIDC industry: http://en.wikipedia.org/wiki/AIDC

[AIDC is also commonly referred to as "Automatic Identification," "Auto-ID," and "Automatic Data Capture."]

The software world has so many acronyms!

AIDC is used to automate inventory, asset tracking and management, and warehouse management. The basic concepts of AIDC technology include barcodes, tags, or RFID labels, a hand held scanner or reader, and some sort of software. The software is used to capture data using the hand held scanner or mobile computer from a barcode or tag. It then sends the information captured to a database.

Considering Software Modifications?

Working for a software company for the past few years I've come to observe our software services department working all day on complex modification's. I've come to notice several benefits but also consequences with modifications especially when they get too involved.

At our company, we normally try to sell all of our software "out of the box" just as it was written whenever we can. In our industry it's by far the easiest way to do business and allows for the fastest delivery and ROI for the customer. However, we also want to ensure that each software package is going to be the best fit for each client. Often times it's easy to make a few minor modifications to a software package to accomodate for exactly how the customer plans to use it. By doing so we can tailor our packages to each clients needs which can be a great benefit for the customer but at times can be a disadvantage in the long run. For example it may become a burden if the software becomes too customized for a particular client. With highly customized software we run into issues when its time to upgrade and additional modifications may be required. This means the client may not fully benefit from minor upgrades and bug fixes. They may have to purchase a customized support contract or training. And, there are always extra costs associated with our engineers development time to make sure everything is working properly. So, if you plan on having a customized software solution developed solely for your company and its use, I would recommend keeping track of all documentation and ensure you are aware of potential future costs associated with maintaining your software investment. On the other hand, a minor modification can provide increased efficiency and ease of use tailored to your business needs.

Some advice when considering software modifications:

• Ask your developer if they have performed this modification before. If it's been done before the developer will have all the documentation and will know how to adequately provide support moving forward. Easy.
• Ask about any future costs associated with maintaining your investment.
• Make sure the modification is truly necessary and beneficial for your needs, is this going to expedite your ROI?
• Make sure the software installation will fit your time frame. How long will the modification take to develop? Also, schedule a tentative completion and go live date.
• Take action to ensure you will receive proper training and support in the future.
• Most importantly know what your up against and how involved your modification is. If it gets too customized, you may be getting into more than you bargained for. Modifications should be developed as an added benefit, not a cost.  

When have you run into trouble with modified software? Or, when has it benefited you?