Every Monday, LogistiekProfs lets a logistics professional talk about his or her expertise. In a three-part series on barcoding, Peter van Minnen discusses whether barcodes can benefit you. Today the last part: on quality, efficiency and the 9 logistics movements within companies.
Hundreds of thousands of companies use barcodes more or less successfully. Based on an analysis of a large number of (inter)national companies, the usefulness can be focused on 2 characteristics. These characteristics are equally the two pillars on which every company rests: quality and efficiency.
A company receives goods from outside (input) and does something with them, adds value (throughput). Then the goods leave the company (output). Can we improve this process? To improve the process, we need to take a look under the logistics bonnet. What we then see are the 9 logistics movements within companies. These can be visualised as follows:
- Crossdock-Inbound: Goods arrive directly in stock, on location in the warehouse. This is the case, for example, in cross-dock activities where the customer has already labelled the boxes and pallets, but also when service technicians put stuff back in.
- Reception: Goods are received at a reception location. Here they are tested, unpacked, broken down or just bundled, for example, before being put into stock.
- Production inbound: Goods can also come in from the production department or from subcontractors. These goods are also tested, counted and processed before going to the warehouse.
- Clearance: Goods are stocked from the receiving location in the warehouse.
- Internal movements, counting and replenishment. Internal movements take place in the warehouse: from bulk to pick location, back and forth. Counting can also be seen as movements where not the location but the number can change.
- Clearing: Based on pick orders, goods are taken from the warehouse and brought to the shipping department.
- Shipping external: In the shipping department, goods are counted, tested, packed and shipped. This is how the goods leave stock.
- Production Outbound: From the shipping department, goods leave stock to the production department or to subcontractors, the relevant information remains in the automation system but the goods are not available.
- Crossdock-Outbound. Goods disappear from stock, from a location out of the warehouse, without specific handling. This is the case in cross-dock operations where groupage uses already labelled products, but it also concerns service mechanics bringing spare parts.
The nine basic movements can each in turn be subdivided into specific movements, each with its own reason and also each with its own follow-up: because from supplier 1, the items can go straight to the racks, but upon receipt from supplier 2, they must first be counted, inspected and re-stacked.
However you look at it, we always come back to these basic movements when working with barcodes. And that helps us move forward.
General Problem
The 9 logistics movements include all logistics activities within a company, which have a relationship with the physical place where goods are located. And if we then analyse these movements, it turns out that every logistics movement, every 'supply chain event' can be seen as a movement.
This is actually a very simple principle. So let the solution to get a grip and insight into logistics movements be that simple.
We would like to introduce The Triangle here:
At the top of the pyramid, management determines the company's vision, what it wants to achieve and in what way. Here, management determines whether we make bicycles or pastries, whether we deal in chemicals or lingerie.
To achieve strategic business goals, business processes are set up. In smaller SMEs, these processes are very manageable, people know from each other what they are doing and can step in during illness and holidays. In larger companies, this is a complex job, sometimes based on surrender and gradual growth. Business processes also rely on best-of-breed, where experiences from other companies come together and lead to a new and modern, innovative company.
The monthly, weekly and daily operations are monitored by the board on the basis of reports. Analysis of data, comparisons and trends discovered lead to new insights to the board which can then adjust the organisation.
Reports are compiled from purchases, sales, costs, depreciation, staff turnover and more data stuffed into some computer system. Collecting all this financial and operational data is a tough desk job for which, fortunately, very user-friendly software packages have been developed. Here we find the major ERP systems such as SAP, Oracle and Infor. But software from Unit4 (Multivers), Afas, Accountview, Minox, Exact also plays a role here. Up to the smaller accounting packages such as Snelstart and Osirius, widely used by ZZP and MKB.
So the software has to be filled with data. This involves data from purchases and sales. We think of these as expected movements of goods: based on purchasing, we expect incoming items; based on sales, we expect outgoing deliveries. Both the expected movements of goods and the actual movements are called Supply Chain Events. The science that deals with this is also called "Logistics".
The people who deal with the expected movements, the salespeople and buyers, must always cooperate with the people who deal with the goods themselves: the people in the warehouse, production or in the service field.
Communicating messages of receipt, deliveries, movements of goods: who is responsible for that? Have the ordered items been received yet? How many item-X can I sell this customer? What is in stock? Where are the screws Y for customer Z?
Because all actual movements must be recorded in software (otherwise reports are incorrect and the right decisions cannot be made), we are dealing here with a difficult and time-consuming job. And time is money.
To save time, we often 'just add it on'. But 'just add to it' at the expense of quality. And quality is also money.
Summary
For barcoding, you don't have to travel far. For a quick start with barcodes in your logistics processes, plenty of growth opportunities and with links to your administration software, you don't have to do much.
- Take a critical look at who you are, what you do, what you want
- Talk to an expert or supplier and learn from predecessors
- Calculate current costs and then potential savings
- Look at the logistics process and decide where to start
- Base yourself on your own numbers and your own belief whether it will get you anything or not.
Some may benefit a lot, others little and sometimes it doesn't make sense.
Barcoding doesn't make you happy but it provides time to devote to more meaningful things.
Peter van Minnen - ict & logistics consultant, article identification specialist
Also read here:
Part 1: barcoding for beginners (and advanced users)
Part 2: what should it cost?
