The Benefits Of Bar Coding

Bar coding is no longer a technology for high-tech organizations, but a user-friendly tool that can help all companies. The cost of scanners and the amount of required software have declined to a point where almost anyone can justify implementation of a bar code system.

The data contained in a bar code is nothing more than product reference information, which the computer uses to look up records associated with the product. Product records such as on-hand balances, warehouse locations and production status can be readily obtained by scanning a bar code.

Bar code systems consist of two main components: the hardware (scanners and decoders) to read the bar code labels, and the software to process the information and interface with your existing business management software.

Bar coding offers numerous advantages:

1. Reduction in errors. Bar code systems reduce the number of data entry errors. This has been proven in studies showing the typical error rate for manual data entry to be one error in 300 characters. Today’s bar code scanners are almost error free, with some scanners documenting error rates of one per many million characters. This reduction in errors can have far reaching impact on service levels throughout a company (and ultimately to its customers).
2. Savings in Time. Beside being more accurate than manual data entry, the entry of data using bar codes is much faster. Whereas routine manual data entry for a particular customer order may take a few minutes, transferring this information via bar code can take just a few seconds. In a company that processes hundreds or thousands of transactions, these time savings will mount up.
3. Improved Operating Efficiency. Considering bar codes provide faster and more accurate data collection, less time is spent on the data entry process and follow-up error resolution. This frees up your staff to handle other tasks, while still responding to the needs of your customers.
4. Overall Cost Savings. Each of the above benefits contributes to ultimate cost savings. Although there will be an initial outlay for the hardware and software required to establish a bar code system, this outlay will be recovered in short order through improvements in accuracy, savings in time and greater operating efficiency.

Another benefit of bar coding is the ability to capture data you could not (or would not) previously collect. Information requested by customers, such as shipping manifest data, is easier to obtain with bar coding.

There are many applications for bar coding, such as the following examples:

• Time and attendance—employee badges with bar codes are scanned into a reader and attendance data is automatically sent to a computerized payroll program.
• Job costing and tracking—employee badges can be used to record the beginning and end of each work order. Multiple employees can use one bar code reader in a central location. If employees move from one work area to another, they can scan their badges at the new bar code reader, allowing appropriate payroll cost allocation.
• Asset inventory control—many companies have numerous fixed assets that need to be tracked so costs can be properly allocated. In such cases, bar codes are placed on all items and linked to a bar code in the specific work area.
• Payment processing—printing a bar code on an invoice allows accounting personnel to bring up the data and complete remittance processing when payments are received. n Warehouse—the computer prompts an operator to pick a list of items associated with an order. After picking the parts, the operator scans the bar code. The computer reads the code to be sure the right items were picked and adjusts inventory levels.
• Warranty and service tracking—as units are received, the bar code on the unit is scanned, bringing up the history for that unit. As the unit is repaired, scanning the parts required for repair will aid in failure analysis and spare parts planning.
• Value-added services for customers—having bar code printing capability allows companies to qualify as suppliers to customers who require labels on materials shipped to them, and it creates revenue.

These are just a few of the ways that bar coding can be used to help your company. If you are not presently taking advantage of bar coding technology, it’s time to think seriously about doing so.