Switching to barcode scanning can save the work of 3 full time employees.
Are you still using paper forms, pencils, and clipboards? An estimated 80% of small to mid-size manufacturing plants are still using paper forms and manual keyboard data entry to track inventory and manufacturing operations.
The drawbacks to this manual system are twofold:
- The probability for human error
- The cost of the labor involved is typically equivalent to one to three employees at a cost exceeding $50,000 per year per person.
While paper, pencils and Excel spreadsheets are cheap, $150,000/year isn’t. Especially when those employees could be doing much more valuable work.
How Many Forms Does Your Operation Use?
If you gathered up one copy of every form that is used in your warehouse or manufacturing plant and laid them out on a conference table how many do you think there would be? Probably a lot more than you thought.
How much duplicate effort is being done?
How much information is being missed?
How much time is lost looking for or recovering information?
These are hidden operation costs that could be costing you hundreds of thousands of dollars a year.
Why Make the Switch to Barcode Scanning?
So if time and money is being lost, why are manufacturing plants slow to implement a more efficient system?
The two main concerns are cost and complexity. Change can be hard, even if it is beneficial.
Several years ago the standard procedure was to hire a full time IT person at the plant and purchase expensive hardware and software to execute and maintain the new system. This is also costly. Luckily, today with the availability of Cloud-based barcode tracking solutions like BellHawk Online this isn’t necessary.
You can start saving money right away. The monthly cost to use this operations tracking software is often under $1,000 per month and includes such IT functions as doing nightly backups. Even better, there is no software to install on any mobile device or PC. Instead, the user interface is a web browser. There is no need for an onsite IT person and you don’t have to purchase software.
How Does the Barcode Scanning Solution Work?
- A user points the web-browser on their device to the plant’s private website running at a secure data center in the USA
- They can start doing barcode data collection with the barcode scanner attached to or embedded in their device.
- Managers, staff, and customer support people can then view the real-time status of their operations using any web-browser equipped device, including smart phones, over a secure data link, anywhere, any time there is an Internet connection.
What About Customization?
Each plant is different and the complexity of configuring and customizing a tracking system for a specific application used to require a significant amount of professional support services. Again, this was a major cost factor that often caused management to forgo implementation.
Fortunately, systems like BellHawk Online now make extensive use of Artificial Intelligence to simplify the setup of the software. This allows most clients to implement the system themselves, further saving money.
Generally, clients set up their systems for under $2,000 in support costs.
What About Equipment?
Mobile computers and barcode scanners have dropped dramatically in cost over the past few years. Now you can get a barcode scanner that plugs into a PC for under $60 and a ruggedized mobile computer with integral barcode scanner for under $1,000.
Barcode label printers are also very affordable or can be handled by IIOT (Industrial Internet of Things) appliances which are, again, configured using Expert Systems rules. These IIOT appliances typically add $200/month each to the cost of each system. As a result, smaller manufacturing plants can get up and running for an initial cost (first quarter of operation) for under $5,000, with an ongoing cost of under $1,000/month. This is a savings of at least $4,000 a month in labor costs.
The costs for larger manufacturing plants are somewhat higher but the savings are proportionately greater.
The Benefits of Barcode Scanning
Besides reducing labor costs, there are other reasons to make the switch including:
- Real-time visibility as to the status of inventory and customer orders, anytime, anywhere users have an Internet connection.
- Point-of-action mistake prevention, both in data collection and in preventing operational mistakes before and not after they occur.
- Accurate capture of actual cost data for jobs and comparison with estimated cost.
- Automated capture of materials traceability data, including quality assurance testing.
- Ability to do real-time scheduling of operations to ensure orders are delivered on-time.
These benefits, combined with the data collection labor cost savings, make a strong case for switching to the use of barcode scanning and mobile data collection.
How To Get Started
PaladinID has been helping manufacturing plants for over 20 years to ditch the clip boards and pick up a scanner. We’d love to learn more about your processes and goals and figure out the right system for you. We can help facilitate the partnership with Bell Hawking Online and ensure you have all the proper label equipment to maximize efficiency and cost savings.
Let’s see if we can save you some money while saving some trees too!
Source: This post was inspired by the white paper Economics of Replacing Paper forms with Barcode Scanning for Tracking Manufacturing Operations by Dr. Peter Green.
About the Author:
Dr. Peter Green is a recognized expert in real-time operations tracking methods for manufacturers and other industrial organizations using technologies such as mobile computing, barcode scanning and RFID. He is also an expert in applying real-time artificial intelligence techniques to solve operations management problems for these same organizations. Dr. Green was educated at Leeds University in England where he received his BSEE and Ph.D. Degrees in Computer Engineering. He was previously a senior member of the research staff at MIT, where he worked on real-time artificial intelligence methods applied to tracking problems and was a Professor of Computer Engineering at WPI where he was also principle investigator of a USAF and NASA sponsored research program into real-time AI software techniques. Dr. Green was the lead systems architect in the development of the BellHawk software and now serves as the Technical Director for BellHawk Online.
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