CC4Fnews

In the interest of getting back to saving a lot of money on internal operations we are going to do a 3 series newsletter on cost savings from leveraging simple technologies adding a fresh twist by improving their usefulness adding something to help save you more money.

Working with one of our customers we just finished a client upgrade (to our Food Connex ERP system), based on his input we designed a put away label that now eliminates the need for a vendor bar code to implement a scanning solution.

We did a quick analysis below. See for yourselves the savings. 

Remember accurate order picking is critical for customer satisfaction and stopping the ugly runbacks that cost you money.

When it comes to inventory and warehouse management the hands down king of cost savings in the small to medium food distribution and processing market is still the humble bar code.  In an ideal situation where a product bears a complete UCC 128 label a bar code reading solution will provide:

What you Gain:

• Increased Pick Accuracy through item SKU verification
• Decreased Over and Under ship through quantity picked verification
• 100% Catch weight accuracy

Back in Issue 135 we identified that approximately 45% of your shipping errors would be eliminated by utilizing a bar code checking system to confirm picks (most of the remaining errors are attributed to you making a mistake during order entry.)

But this is the real world and not all products carry a barcode and many that do carry barcodes don't conform to industry standards.  You can't "force" your vendors to conform (well most of us can't, Walmart and Whole Foods can.) So what can you do? - One solution is to label products as they come in the door. 

What you Gain:

• Warehouse Management
  • Add Put Away Locations
  • Add Inventory Rotation Information
• Branding Opportunity
  • Your Company Name
  • Your Item IDs and Descriptions
• 100% Readability and Consistency of Labels
• Increased Pick Accuracy
• Decreased Over/Under Ship

What you Miss:

• 100% Catch Weight Accuracy (You'll need an integrated weighing solution to get this back.)

Let's look at the math from Issue 135 again and take out the "Invoicing" errors (which in many cases are catch weight concerns).  To be conservative we'll assume that you don't improve those errors at all and you'll still see about a 33% reduction in shipping errors from self applied labeling and barcode reading. Now let's not fool ourselves, there are costs associated with this.  You'll need a robust label printer (to create the labels),  a purchasing and receiving system (to feed product info to the printer), and an order entry, scanning and invoicing system (to create the orders and scan out the product for invoicing), and you'll probably need someone to tie all the technology together.

Sounds expensive, but consider that in Issue 137 we saw that a company moving from manual systems to best business practices for effort prevention could easily move 5% and up to 7.3% of their total revenue from expenses to profit. Take a look at our Thinking Inside the Box to see how this plays out for a small distributor.

 

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