Barcode inventory systemshelp you by reducing dataentry error, reporting onaccurate on-hand quantities,locations and reorder needs.Simple but adequate systemsare available for less than$1000 and pay forthemselves almostimmediately.

Why Barcode Your Inventory? The Practical GuideBy Tom Reynolds

Why Barcode Your Inventory?having too little of critical material inventorycan lead to big problems. Just-In-Time (JIT)inventory management principles haverevolutionized inventory processes forcompanies. JIT requirements have floweddown to suppliers, and everyone can savemoney if JIT is properly implementedthroughout the distribution channel.

Smaller companies recognize the trend, withmany managers keeping a “Just-In-Case”inventory for safety. If the inventory sys-tems were adequate, the waste of money topurchase and carry this extra inventorywould be saved. Generally speaking, if thecurrent system requires a “safety stock”,chances are that specific item’s locationdata isn’t very accurate either. This can leadto over-ordering currently used materialsand scrapping inordinate amounts ofmaterials when it becomes obsolete.Inventory soft- ware with a barcode trackingscanner can solve these problems as well.If you’re not reaping all the rewards to us-ing an automated, efficient inventory soft-ware system and barcode tracking system,it’s time to get started.

Why use inventory software and a barcodetracking system? To answer thosequestions,lets examine what inventory is, and why itis important to any business.

According to Webster, inventory is definedas “an itemized list of current assets” and“a list of goods on hand”.

No matter what business you’re in, youmost likely have an inventory - items forsale, raw materials, finished product,tools, parts supplies, etc. Using abarcode inventory system for your stockwill efficiently accomplish the following:

● You’ll know what you have and where it is.● You’ll be able to receive, put away, move and

ship out (to internal or external users) all theitems you have in inventory

● You’ll have pertinent, up-to-date reportsabout stock levels, usage, and reorder timesfor all the items in inventory

● Its easy to enter data into, and get data out of● It makes cycle-counts easy and efficient It

will export data easily to your accounting orother back-end system

In today’s competitive environment,

Specifications subject to change without notice. Copyright ©  2016 Carolina Barcode Inc. All rights reserved.

Specifications subject to change without notice. Copyright © 2016 Carolina Barcode Inc. All rights reserved.

How Do I Get Started?Many companies get hung up onthe selection of inventorysoftware and the project getsstuck from “analysis paralysis”. Ifyour inventory processes /procedures / system could bebetter, we recommend gettingstarted with one of the $1,000solutions listed below whichincludes the desktop inventory

software and a portable bar- code scanner. Here’s why:

● It allows you to prove to your company team that thetechnology is going to save you time and money in thelong run.

● The entry point is inexpensive and after the initialinventory gives an almost instant savings

● If you decide to change or upgrade your inventory systemat a later date, all the information from the inexpensivesystem can be imported in- to the new system.

Regardless of the barcode inventory software orbarcode scanner you choose, the “to do” list forimplementing a barcode inventory system is the same:

Make a master list of everything thatmight be in your warehouse or stockroom.This will include the item number, unit of measure anddescription at a minimum. It may also include thepurchase cost, vendor, minimum inventory amount (theamount you must always have on- hand), and otherpertinent information associated with the item. Put thelist on a Microsoft Excel worksheet, because from thereyou can implement any of the 3 types if inventorysolutions Listed on the next page

If you don’t currently have a master list of materials youshould be able to easily get it from your suppliers. Justask them (or tell them you’ll stop ordering until you getit). This will minimize the time you have to spend puttingit together.

Put barcodes on inventory items andlocations. Most products come from the manufacturerwith barcodes attached. These barcodes have the itemnumber written in text below the barcode. If thesebarcodes currently exist, then your effort here might beminimal. You do, however, have to make sure that thebarcode on the item matches the item number in yourmaster list from the step above.It’s a good idea to get set up to print barcode labelswithin the facility. Even if all your materials come fromyour vendors with proper barcodes, you’ll still find thatyou’ll have to generate location labels and re-label itemsfrom time to time.

There are a variety of methods you can use to printbarcodes. We recommend the lowest cost alternative toget started – a barcode font. Bar- code fonts give you aninexpensive and flexible way to print labels quickly withhigh resolution and a low initial investment.

The location barcode is important because the goal ofthe inventory system is to know not only what your have,but to be able to tell accurately where it all is. You canget creative with the location barcode. Let’s look at anexample:

Let’s say that you have a warehouse with 2 ship- pingdoors, 6 aisles of shelves, with a storage shelf on eachside of the aisle. When you receive inventory to the

The technology is mature. Systems are cost effective.Get Started Now!!

“Many companies get hung up on theselection of inventory software andthe project gets stuck from‘analysis paralysis’... We recommendgetting started with one of the$1000 solutions. .”dock, you might use a location barcode of “DOCK1” or“DOCK2” to indicate that those materials are sittinginside the door. When you go to put them away, youmight put them in location “A3-S6-B4”, which representsAisle 3, Shelf 6, Bin 4. The important thing to understandhere is that the location barcode should not only beunderstood by the inventory system (it doesn’t reallycare as long as the loca- tion barcode is unique andreadable) but also that it means something to theemployee putting away the stock.

These steps are going to take a little time, but the goodnews is that this is the hardest part (from the actual workstandpoint) of putting together a barcode inventorysystem. Try to make sure you have enough help, or atleast enough time to be thorough about this process.Make sure that everyone’s expectations are realisticabout the level of effort required for this step.

Now you’re ready to choose the inventory soft- ware thatyou’ll use.

There are a variety ofmethods you can use to print barcodes. Werecommend the lowest cost alter- native toget started – a barcode font. Barcode Fontsgive you an inexpensive and flexible way toprint labels quickly with high resolution anda low initial investment.

Specifications subject to change without notice. Copyright © 2016 Carolina Barcode Inc. All rights reserved.

Choosing Inventory Software:

Inventory software and barcode trackingscanners have become less expensive overthe last 5 years or so. As you might expect,the capability of inventory software is theinverse of the price. Please note that for thefirst 2 categories below, the mobile barcodescanner will be a “batch” scanner. Thatmeans that you’ll collect inventory data us-ing the scanner, then come back to a PC andpull it out. The third category of sys- temsincludes “wireless” systems, where themobile barcode scanner connects to thedatabase on the network using a WiFi con-nection.

That being said, there are 3 general catego-ries of inventory software: (Note: all pricesare for a single user copy of the desktopsoftware, the mobile barcode scanner,and the program that runs on the scan-ner.)

Least Expensive ($500-$1500) – Runs onthe mobile barcode scanner only. Gives youthe ability to take inventory data - track re-ceipt, put away, move and ship (just anotherword for taken out of inventory). Whenyou’ve collected the data, you come back toa desktop PC and pull out the data file fromthe mobile barcode scanner. From there, youcan open it in Microsoft Excel, or im- port itinto a database program like Micro- softAccess, SAP or Oracle. Although this isgradually changing, most of the least ex-pensive programs will just give you itemnumber information. That means that whenyou open up the file, there will be no de-scriptive information about the items thatyou scanned. You’ll need to cross-referencethis information with the Master List tocome up with the description of the materi-al.

HINT: If you have the Master List in Mi-crosoft Excel, just import the data fromthe mobile barcode scanner into anotherworksheet in the Excel workbook. Thenwrite a simple macro using the VLOOK-UP function to copy the descriptions fromthe Master List worksheet to the sheetthat contains the mobile barcode scannerdata.

Products that fit into this category are: PTSTracer (ptshome.com), CBC Invento- ry,SerialMagic (serialio.com), DoInventory(wakefieldsoft.com/doinventory/)

Budget, Full System ($1000-$5000) – Thistype of system has both the mobile barcode

scanner and a desktop program with theability to pull the data from the scanner. Thedesktop program has the ability to do every-thing the mobile barcode scanner does, butalso gives you the ability to add items, runreports, schedule cycle count, etc. Thedesktop program has an inventory database,most likely in Access or SQL format. Thesesystems are very capable, full featured andcomplete. They can import and export datawith any back-end system you might have.Single-user systems to start, they can be up-graded to multiple users talking to the data-base at the same time.

Products that fit into this category are:RedBeam, Track’Em, RioScan

Full Featured System ($10,000+) – This isa state-of-the-art system with wireless mo-bile barcode scanners. The scanners talk tothe database in real-time, and make any up-dates as they happen so the database is al-ways up to date. On the desktop side, thesesystems tend to be multi-user, and have theability to designate bin sizes and take feedsfrom an MRP system. They can also useordering system data to project warehousecapacity vs. orders vs. item usage, and aother sophisticated features you would needfor complete warehouse management. Oneof the coolest things One of these featuresallows an operator to scan a single palletbarcode on an incoming shipment and pres-ents him with a list of items in the pallet, andthe open location recommendation from thesystem for where to stock it.

Products that fit in this category are:Sage, Intellitrack, CoreIMS

Naturally, your choice of software will bedriven by your goals and your budget. Themost important thing is to take your timedefining your needs and to complete a thor-ough evaluation of the demo programssupplied by the manufacturer. Keep in mindthat many of the “off the shelf” programslisted above can be modified by the manu-facturer to meet your specific needs.

After you select the inventory software andreceive your training, all you have to do isimport your Master List to set up the sys-tem. You’re now ready to put in inventoryinformation.

After you select the inventory software andreceive your training, all you have to do isimport your Master List to set up the sys-

tem. You’re now ready to take the initialbarcode inventory.I Have the Software, Everything’s bar-coded – Now what do I do?:

Complete the initial inventory – Now youhave to scan all the items and locations forthe materials that you have in inventory.This part is fairly disruptive to the normaloperation of the business (that’s why yousee businesses closed for inventory), but youcan do it effectively if you follow theseguidelines:

Make sure you have enough staff andscanners. As a rule of thumb, one operatorcan inventory 30 bin locations per hour ifthere is only one item in each bin location. Ifyour locations have multiple unique itemnumbers in them, assume that they can scan80 unique item numbers per hour. NOTE:These estimates should be conservative, butit’s important to make sure you hit the ini-tial inventory hard and get it done quicklyand completely. You’ll want to minimizebusiness interruptions.

Have a plan. Do the inventory systemati-cally, from one end of the warehouse to theother. Try to complete entire sections at onetime. Mark the locations with a “flag” like apost-it note or a red dot sticker to indicatewhen the inventory of that bin location iscomplete. If you don’t think you can shutdown the warehouse for the amount of timeit will take to complete the inventory, con-sider pulling the inventory required for yourbusiness to run while the inventory is beingcompleted. Put these materials in a specialplace, and have a manual list of what’sthere. That way, your employees can pullfrom that stock to do their jobs while you’recompleting the inventory. At the end, you’llcount the materials left in that area, key inthe item numbers and original quantities,then remove the quantities of each that wasused while the inventory was taking place.

Reconcile the inventory against the ac-counting balances that you’re showing forthe inventory. Most of the time, thedifference between the accounting inventoryand the actual inventory will be substantial.Planning to do this validation before you golive with your inventory process will giveyou the opportunity to spot-check any glar-ing discrepancies between the two.

If you’ve followed along so far, you’re nowready to “go live” with your inventory sys-tem.

Choosing Inventory Software and the InitialInventory - Your First Steps

“If you have the Master List in Microsoft Excel, just import the data from the mobile barcode scanner intoanother worksheet in the Excel workbook. Then write a simple macro using the VLOOKUP function to copy thedescrip- tions from the Master List worksheet to the sheet that contains the mobile barcode scanner data.”

If you don’t use the system torecord all transactions, two thingswill happen. First, the inventorydata you have won’t be accurate foraccounting practices. And, becausethe inventory data is inaccurate, thesystem won’t give you accuratereorder, usage or quantity reports.

Go Live with the NewInventory System

OK, the hard part is over. Honestly. Allthat’s left is to make sure your inventorysystem quantities remain accurate.This is strictly a function of workpractices. Work Practices are defined as“ways of structuring things a workermust do, or ways in which something isdone”. Although the work practices foryour new inventory system are fairlysimple, they must be adhered to in orderfor the data to remain valuable overtime. Here are some guidelines:

Never add, move or remove anythingfrom inventory without first record-ing the transaction with either theportable barcode scanner or thedesktop software. If you don’t use thesystem to record all transactions, twothings will happen. First, the inventorydata you have will not be accurate foraccounting practices. Because theinventory data is inaccurate, the systemwon’t give you accurate re-order, usageor quantity reports. This part is critical.Failure to implement work practiceswhere you log all inventory transactionswill completely invalidate all yourwork!

Everything must have a readablebarcode label. Over time, you willintroduce new items into the inventoryand eliminate others. Your shelvinglocations may change or you may addmore. The power of the system is theability to quickly and efficiently loginventory movements. Make sure thatall your products have valid barcodelabels. Make sure all your locationlabels are readable.

NOTE: You can key in the data froma missing or damaged barcode usingthe keypad on the barcode scanner,but you’ll stand thechance of making more errors usingthis method. Data entry usingbarcodes is much more accuratethan keyed entry.

Designate a responsible person orgroup. In order for the inventorysystem to work, you have to make surethat the folks responsible for theinventory have the commitment andauthority to make sure that theinventory work practices are followed.This doesn’t necessarily mean the timesthat you do a full inventory, but whenyou receive, put away, move and pullout items and materials. Remember, theinventory will only be as accurate as thediligence you put into administering it.

Audit the inventory system data. Overtime, mistakes and omissions will bemade in entering the inventorytransaction data. Use the “cycle-count”option in your inventory system to spot-check the accuracy of random itemquantities. This will let you mea- surethe effectiveness of your workpractices.

Run and analyze reports often.Obviously, using the re-order reportwill help you to make sure that youalways have the materials you’ll needon-hand. Consider harnessing the fullpower of your inventory database. Lookat item usage over time, and make sureyou’re not carrying more inventory oflow-use items than you really need.Eliminate inventory that you’ll never

use. Analyze the fast-moving items andproject your needs for the rest of theyear, and use that data for basis ofnegotiating with your vendors. If youthink about it, the database can tell youthe story of your inventory.NOTE: Most inventory systems have anoption to design customized reports. Thisoption gives you the ability to query thedatabase and generate reports on justabout anything having to do withinventory transactions.

Be open to worker’s suggestions onmaking the system more efficient.Since the folks logging the inventorytransactions are the ones who will makethe system accurate (and success- ful),be open to their suggestions. Most ofthe time they’ll want to make the workpractices more efficient so they can getthrough their day quicker and with lessmindless work. Be responsive andimplement suggestions where everpossible. Sometimes those suggestionswill save your company “big money”.

That’s it! If you used this white paperas a guide while going through yourimplementation – Congratulations! Ifyou’re using this to prepare, good luck!In either case, if you have anyquestions, just give us a call and we’llhelp you any way that we can.