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Electrical Supply Inventory Optimization

Electrical Supply Inventory Optimization

3 Big Benefits of Barcoding and Inventory Optimization for Electrical Supply Distributors

Bar coding, a form of key less data entry facilitating automatic identification and data collection (commonly referred to as Auto ID), is not just for grocery stores anymore. The familiar stripes are popping up in new and unusual places such as doctors’ offices, law firms, post offices, retail stores, security applications, electrical supply warehouses and rental cars. Bar coding and related technologies have been used in manufacturing companies for shipping and receiving operations for more than 30 years. But even in these more traditional settings, bar code applications have spread throughout the enterprise to include warehousing, accounting and customer service functions, time and attendance, and package delivery, as well as the assembly line operation itself.

In all of these applications, the motivation to begin bar coding is the same: improve data management and accessibility and reduce costs. In the 1970s and 1980s, the increased use of computers in the commercial and industrial companies fueled the need for improved data capture. Companies hired armies of data entry professionals tasked with entering repetitive information into network terminals. In the 1990s, this need for immediate and accurate reporting was compounded with the introduction of just-in-time inventory tracking,
build-to-order manufacturing and supply chain management practices. Today, many manual data entry tasks
have been replaced by bar coding.

The widespread acceptance of bar coding within industry over the past three decades has lead to the
development of numerous industry standards by formidable industry groups, such as AIAG (Automotive), EIA
(Electronics), HIBCC (Healthcare), and HAZMAT (Chemical) to name a few. Such standards ensure universal
compliance and easy identification of product shipments among trading partners in the supply chain as well as
ensure that product (such as hazardous chemicals) is handled properly to prevent injury or loss of life.

Improved Data Accuracy

      • Improved data accuracy is the single most common motivation for implementing a bar code system. Often the backbone of operations, data entry enables a company to produce accurate reports and predictions about future needs and actions.With data entry playing such a critical role in a company's operations, it is important to identify the extent to which data entry errors are tolerated.

        Companies with integrated bar coding systems that enable users to scan bar codes rather than type numbers are commonly achieving 99% data accuracy. For companies in which data errors are a mere nuisance, the difference between 85% and 99% may not seem that extreme. But for organizations in which data entry errors are catastrophic, such as hospitals, crime labs, and manufacturing companies, the goal is 100% accuracy. Bar coding is the best tool that these organizations have to ensure data credibility and thereby greatly reduce the impact of human error.


      • Besides providing near-perfect accuracy, bar coding also enables users to work faster, without sacrificing accuracy.When factoring in the time it takes to correct simple data entry errors, it is easy to see the improved efficiency that comes with bar coding. In addition, by providing computer systems the capability to “see”  is happening within an organization, bar codes enable instant conversion from physical actions into digital transactions exactly what. This conversion of former manual tasks to electronic processes occurs in real-time,  and allowing management to make decisions based on current data and personnel to be employed increasing efficiency other, more productive areas.

        While the time saved in data entry operations is easily recognized, the true efficiency improvements emerge when bar coding capabilities are extended to other areas of the organization, resulting in functional automation. This automation greatly simplifies information collection, processing, and tracking.

        Consistency Bar coding, particularly in fast-paced industrial environments, enables consistent and predictable operations for enhanced product quality by combining data management functions and preventing bottlenecks at data entry stations. Auto ID systems usually operate at a defined pace, either self-determined by the printer’s maximum speed or triggered by the action of another device. For instance, in an assembly line, operations that were previously slowed by congestion at the point of data entry can now progress smoothly through a system of automated print-and-apply labeling machines and fixed scanners. In addition, employing standardized bar code symbologies and compliance labeling ensures that bar code information is captured and relayed in a manner that is universally understood and accepted.

Improved Inventory and Asset Management

      • Bar coding can help any company get a handle on resources. Companies are routinely bar coding assets such as manufacturing equipment, computer hardware, office furniture, and tools in order to record the number of each item, as well as the condition, color, features, and designated user. Libraries around the world are starting to place bar codes on books to track borrowing history. Likewise, automotive fleet owners, public transportation agencies, and rental car companies have begun utilizing bar codes to track detailed maintenance records for each vehicle. Manufacturing companies have similar applications in place to track both resource and finished product inventories. Many companies complete the manufacturing process by affixing a label to the finished product, container or pallet. This label often contains very specific information about the product in both bar-coded data and human readable text. The human-readable portion of the label is likely to describe the product characteristics, the packaged quantity, and the names of both the manufacturer and the customer, if known. The bar code contains internal information such as production line number, date of completion, materials used, serial numbers, and miscellaneous quality control information. By scanning the label in the shipping department, the company can identify the exact inventory, in real time, as well as the precise date and time that any product leaves the warehouse.

Cost Benefit/Analysis

Besides the cost of the equipment, including the printer, scanner, and media, the cost justification of an Auto ID system can be a tricky computation. It is widely thought that most Auto ID systems pay for themselves in less than two years, but this figure is dependent on a company’s commitment to widespread implementation and acceptance of the bar coding technology. The “two year” argument alone is often not enough to gain approval of a proposed bar coding system and, similarly, is not even a sound consideration when planning an executive mandated automation project.

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10 Automation Benefits of an Electrical Supply Inventory Optimization System


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