Every Monday, LogistiekProfs lets a logistics professional do the talking. In a three-part series on barcoding, Peter van Minnen discusses whether barcodes can bring you benefits. In his second article, Van Minnen zooms in on the benefits and burdens of barcodes. What may it cost and what can it possibly deliver?
What can barcoding yield? Go through the points below and calculate for each point what the error costs you. By listing all these costs, you will find out what introducing barcodes in your business may cost.
Hard to calculate:
- Wrong delivery to customer
- phone call with complaint
- check what went wrong
- resend good (2nd) shipment
- having things returned (3rd) - Too little stock
- selling no, or
- reorder quickly, and
- send back orders later (backorders) - Too much stock
- money in goods yields nothing
- stock ages quickly
- shop daughters
Quick to calculate:
- Direct booking of receipts
- no writing of receipts
- no manual entry in computer
- everything cleared up quickly - Direct booking of shipments
- no receipts
- no manual entry
- control possible immediately and afterwards - Moving
- always an overview
no searching and walking
up-to-date stock data - inventory
- no annual balance sheet days
- just open to customers
- no extra staff costs
One of your best customers discovers that the wrong item has been delivered. He puts this wrong article aside and calls you as the supplier, he returns the article at your expense and in turn you send a new article. Then we are talking about three shipments instead of one, plus the administrative hassle and time for calling and administration. All in all, a quick €35 cost for calling back and forth. Including shipping, administration et cetera, the costs here add up to €100. At a margin of €10 per item, you have to sell another 10 products to get back to Zero. Could you have avoided this? By scanning the goods before shipping?
Read also: Barcoding for beginners (and advanced users) - part 1
Suppose you count and scan the items when you receive goods. Then the stock is immediately updated. Then you scan the location where they go. Then you also know where they are. Since you no longer have to search, you don't lose anything so you don't have to double order either. Searching and double ordering are commonplace, both among your colleagues and in large companies.
Suppose we do scan and don't have to search, we also don't have to balance/inventory every year. If we can avoid searching and counting with scanning, what may scanning cost?
Companies that have gone before you and are already using barcodes are happy to tell you about their success. Besides less searching, uniform information and faster work, one of the striking success factors is the good reputation they make with both customers and suppliers. Just using a barcode label on packaged products shows that you value quality. And in such a way that in case of complaints, people think before they call you. And that prevents a lot of unnecessary calling and writing to solve problems. Your quality becomes unquestionable.
Four aspects
Four reasons to invest time and money:
- Your market share increases, you get more customers
- Your margin increases, you incur fewer costs for the same turnover
- Your solvency improves, you can do more with fewer people/resources
- Your continuity is guaranteed, you are prepared for the future with this investment and both staff and the outside world see you as a solid company
If you examine these four reasons and value them in monetary terms, you will know what investing in barcoding may cost.
Peter van Minnen - ict & logistics consultant, article identification specialist
