WHITE PAPER BARCODING 101: WHAT YOU NEED TO KNOW Barcoding 101: What You Need to Know INTRODUCTION Barcoding, a form of keyless data entry facilitating automatic identification and data collection (commonly referred to as auto-ID), originated in grocery stores and has since extended to use in doctors’ offices, law firms, post offices, retail stores, security applications, car rental returns and countless others. Barcoding and related technologies have been used in manufacturing companies for shipping and receiving operations for more than 40 years. But even in these more traditional settings, barcode applications have spread throughout the enterprise to include warehousing, accounting and customer service functions, time and attendance, and package delivery, as well as the assembly line operation itself. WHITE PAPER BARCODING 101: WHAT YOU NEED TO KNOW In all of these applications, the motivation to begin barcoding is the same: improve data management and accessibility and reduce costs. In the 1970s and 1980s, the increased use of computers in commercial and industrial companies fueled the need for improved data capture. Companies hired armies of data entry professionals tasked with entering repetitive information into network terminals. In the 1990s, this need for immediate and accurate reporting was compounded with the introduction of just-in-time inventory tracking, build-to-order manufacturing and supply chain management practices. Today, many manual data entry tasks have been replaced by barcoding. The widespread acceptance of barcoding over the past four decades has led to the development of numerous industry standards by major industry groups, such as AIAG (automotive), EIA (electronics), HIBCC (healthcare) and HAZMAT (chemical) to name a few. Such standards ensure universal compliance and easy identification of product shipments among trading partners in the supply chain as well as ensure that product (such as hazardous chemicals) is handled properly to prevent injury or loss of life. Benefits of Barcoding IMPROVED DATA ACCURACY EFFICIENCY BENEFITS Improved data accuracy is the single most Besides providing near-perfect accuracy, common motivation for implementing a barcode barcoding also enables users to work faster, system. Often the backbone of operations, data without sacrificing accuracy. When factoring entry enables a company to produce accurate in the time it takes to correct simple data entry reports and predictions about future needs and errors, it is easy to see the improved efficiency actions. With data entry playing such a critical that comes with barcoding. In addition, by role in a company’s operations, it is important providing computer systems the capability to identify the extent to which data entry errors to “see” exactly what is happening within are tolerated. an organization, barcodes enable instant conversion from physical actions into digital Companies with integrated barcoding systems that transactions. This conversion of former manual enable users to scan barcodes rather than type tasks to electronic processes occurs in real time, numbers are commonly achieving 99 percent data increasing efficiency and allowing management accuracy. For companies in which data errors are a to make decisions based on current data and mere nuisance, the difference between 85 percent personnel to be employed in other, more and 99 percent may not seem that extreme. But productive areas. for organizations in which data entry errors are catastrophic, such as hospitals, crime labs and While the time saved in data entry operations manufacturing companies, the goal is 100 percent is easily recognized, the true efficiency accuracy. Barcoding is the most cost-effective improvements emerge when barcoding tool that these organizations have to ensure data capabilities are extended to other areas of the credibility and thereby greatly reduce the impact organization, resulting in functional automation. of human error. This automation greatly simplifies information collection, processing and tracking. zebra technologies 2 WHITE PAPER BARCODING 101: WHAT YOU NEED TO KNOW CONSISTENCY as the condition, color, features and designated user. Libraries around the world place barcodes Barcoding, particularly in fast-paced industrial on books to track borrowing history. Likewise, environments, enables consistent and automotive fleet owners, public transportation predictable operations for enhanced product agencies and rental car companies use quality by combining data management barcodes to track detailed maintenance records functions and preventing bottlenecks at data for each vehicle. Manufacturing companies entry stations. Auto-ID systems usually operate have similar applications in place to track both at a defined pace, either self-determined by resource and finished product inventories. the printer’s maximum speed or triggered by the action of another device. For instance, in an Many companies complete the manufacturing assembly line, operations that were previously process by affixing a label to the finished slowed by congestion at the point of data product, container or pallet. This label often entry can now progress smoothly through a contains very specific information about the system of automated print-and-apply labeling product in both bar-coded data and human- machines and fixed scanners. In addition, readable text. The human-readable portion employing standardized barcode symbologies of the label is likely to describe the product and compliance labeling ensures that barcode characteristics, the packaged quantity, and information is captured and relayed in a manner the names of both the manufacturer and the that is universally understood and accepted. customer, if known. The barcode contains internal information such as production line IMPROVED INVENTORY AND number, date of completion, materials used, ASSET MANAGEMENT serial numbers and miscellaneous quality control information. By scanning the label in the Barcoding can help any company get a handle shipping department, the company can identify on resources. Companies are routinely barcoding the exact inventory, in real time, as well as the assets, such as manufacturing equipment, precise date and time that any product leaves computer hardware, office furniture and tools, in the warehouse. order to record the number of each item, as well Cost / Benefit Analysis Besides the cost of the equipment, including the printer, scanner and media, the cost justification of an auto-ID system can be a tricky computation and is dependent on a company’s commitment to widespread implementation and acceptance of the barcoding technology. Barcoding only generates a profit when supported by improved processes. When considering barcode implementation, every possible process improvement should be evaluated. There are some obvious improvements that can be achieved by implementing auto-ID systems, such as placing barcodes on retail goods to spare employees from manually entering each product’s price or serial number. There are also several new capabilities and controls that appear from the improved data management achieved by implementing a barcoding system, such as enterprise resource planning (ERP), wireless networking options and radio frequency identification (RFID) smart labels (adhesive label embedded with an ultra-thin RFID tag “inlay” in which digital data is encoded and then captured by a reader using radio waves). zebra technologies 3 WHITE PAPER BARCODING 101: WHAT YOU NEED TO KNOW The initial cost savings companies discover after implementing an auto-ID system include labor cost reduction, improved customer service and supplier response times, better capital and inventory management, more efficient space management and lower equipment costs. In addition to the apparent savings, each of these areas also produces several hidden savings that must be considered during the cost analysis, though the answers may not surface until the implementation is complete. Once the data entry on the production line is automated, can production be sped up? If we create unique barcodes for each product, can the company fulfill customized solutions? Once inventory is monitored in real time, can we trim warehousing costs? These are just a few examples of the hidden gains resulting from barcoding. Several other opportunities will emerge as the use of auto-ID gains synthesis with operations. Barcode Printing Technologies The variety of technologies available for barcode printing can be overwhelming. Further complicating the decision is whether it is better to invest in a barcoding system or to purchase pre-printed barcode labels. ON DEMAND VS. PREPRINTED LABELS Thousands of companies have benefited from ordering preprinted barcode labels from service bureaus rather than investing in a barcoding system. Preprinted labels are useful in operations that require only a low volume of identical (i.e., fixed, non-variable data) labels, often with extensive use of colors or graphics. are ordered with the necessary color, graphics However, companies that start with preprinted or standardized text (such as return addresses labels quickly discover the limitations of this on shipping labels) and are then fed through solution option. Besides restricted flexibility, a barcode printer to receive customized the use of preprinted labels prevents companies (i.e., variable) information. from including variable customer data or combinations of text and barcode information. Whether a user elects to use preprinted or As a result,