I’ve been in the Data Collection industry for almost 35 years. I’ve seen the rise and fall of Blockbuster Video, the realization of the Internet (Thank you Mr. Gore), the market disruptions that Wal Mart and Amazon created along with a few more key events. BTW … barcoding was a HUGE part of the aforementioned companies’ successes. What still amazes me is the number of companies that are still writing down their inventory levels? Not just small companies either. A scary number of Fortune 500 companies still have not adopted Barcode/RFID technologies to help them run better. Sure, some have used in places but not everywhere it should be used. Effective inventory management is essential for businesses of all sizes, ensuring smooth operations, cost control, and customer satisfaction. However, choosing to forgo modern tools like barcoding/RFID for inventory tracking can expose businesses to significant hazards. I tried to summarize a list of the most popular risks of not adopting barcoding in inventory management (Based on my experience):
1. Human Error
Manual data entry is prone to mistakes. Typing errors, mislabeling, or misplaced items can lead to inaccurate inventory records, which ripple through purchasing, sales, and restocking processes. Barcoding reduces such errors by automating data capture, ensuring precision in inventory tracking.
The typical error rates for manual data entry:
o The average error rate for manual data entry is 1% to 3%, which equates to 1 to 3 errors per 100 keystrokes. So, if your part numbers are 10 characters long then only 1-3 will be wrong. That good enough for you? Hope not!
2. Inefficient Processes
Without barcoding, inventory management becomes labor-intensive and time-consuming. Employees must manually count, record, and verify stock, often requiring double-checks to maintain accuracy. This inefficiency slows down operations, increasing labor costs and impacting productivity. You might be able to obtain a pretty accurate but how many extra people would it take? I assure you a person is more expensive than a scanner.
3. Inaccurate Inventory Levels
Relying on manual processes often results in discrepancies between actual stock and recorded inventory. These inaccuracies can lead to:
Several times, I have seen companies re order products that are in their warehouse but they don’t know their location so when they need this product, they just re order causing them to use more space and store more inventory than needed. This is why accountants drink so much.
4. Regulatory Non-Compliance
Industries like healthcare and food often require strict inventory tracking for compliance with regulatory standards. Manual inventory processes make it harder to meet these requirements, exposing businesses to fines, recalls, or legal action. A MUST! Food manufacturers must be able to trace their ingredients back to a lot for recalls. If you’re making cupcakes and writing down your lot numbers, you’re doing it wrong and risking a lot!
To summarize, get some software from a reputable company base in Shady Shores, Texas 😊 and throw away your buggy whips!
Sincerely,
Marshall Ellis
Automation Counselor
The Wizard of the Wide and Narrow
The Buddha of Barcode
The Check Digit of Automation