As technology goes, barcodes have a relatively good payoff for a small investment. Barcodes are fairly simple to implement in a distribution business and are likely to streamline operations right through the distribution process. Barcodes make your staff more productive, improve inventory accuracy and allow you to implement real-time inventory management.
A Primer on Barcoding
A barcode is essentially a picture that represents data, such as a unique product identifier. Traditionally, barcodes have represented numbers and letters using stripes. More recently, ‘two dimensional’ barcodes have been used by some businesses to carry larger amounts of information.
A barcode will usually contain an item number for a specific stock keeping unit (SKU) and may also have other information such as a purchase or sales order number, warehouse/bin location or batch number. More elaborate two dimensional barcodes can even be used to represent in depth product history and traceability information in order to more easily meet compliance requirements.
For decades, barcodes were primarily used in the retail context. More recently, the distribution industry has embraced barcoding as a way to reduce error and increase efficiency right through the supply chain.
Using Barcoding Through the Distribution Process
When inventory is received, the team unloading the truck or container must reconcile the product received with the relevant purchase order. This process was historically completed using a pen and clipboard and, more recently, using Excel spreadsheets. Barcodes on products can be scanned to reduce the administrative burden, allowing trucks to be turned around much more quickly.
When stock is loaded onto shelves and into bins, staff are able to scan the item’s barcode as well as the barcode for the bin or shelf where the item is being stored. This allows stock to be accurately located at a later date. Although stock locations can be recorded manually, this is a time intensive process and can be fraught with data entry errors, resulting in misplaced inventory. Accurately loading inventory into storage locations can speed up the order picking process, particularly where an order involves a large number of obscure, low turnover items.
In some businesses, it may be appropriate to implement a further check – when material is being stored, the inventory management system can use information from bin, shelf and item barcodes to check that the location is appropriate for the type of item. This approach helps maintain order in the warehouse, and can also be valuable when certain types of stock must be stored in a particular way (dangerous, fragile or perishable goods, for example).
Likewise, when inventory is moved between warehouses or shipped to a customer, barcode scanning can be used to speed the process up and improve the reliability of inventory location data. Scanning barcodes as stock is picked and again when it is loaded onto pallets or into a truck can help to verify that the correct products are being transported. This reduces stranded products and prevents staff accidentally shipping the wrong product or order to customers.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.