Barcode Solutions: Money Making or Money Saving?

If you are part of a company, then you know that there two categories of initiatives for you company to engage in.

Category 1: Money Making Initiatives are the primary reasons a business exist. Into this category fall all investments, employees, activities and efforts which have the singular goal of generating greater ROI. In summary, generating more revenue in hopes of higher profit earnings.

Category 2: Money Saving Initiatives are equally as important as the money making initiatives for similar reasons. In this category fall all investments, employees, activities and efforts which will reduce operational costs in an effort to increase profit. It goes back to that Business Management 101 class you took in college, where you learned the formula Profit = Revenue – Cost

Traditionally asset or inventory management solutions fall into the “money saving” category. This is because barcode solutions increase productivity and accuracy and reduce operating cost. It’s time, though, that the business community realizes that a barcode solution will not only save you money, it will increase speed, throughput and overall profitability which will in turn generate higher returns. I will highlight a few of the major ways in which Auto-ID solutions such as inventory management, employee time & attendance, capital asset tracking and job costing will have a direct impact on your companies profit earnings.

Acurate Estimating:

If you are a contractor in the construction or restoration trade, then you know from experience that cost of labor takes a large percentage of your total estimated operational costs for a job. Thus, reducing ill-productive activities such as searching for, replacing or repairing lost or broken tools and equipment is a high priority. While replacing lost tools is expensive, so is driving your cost of labor over the estimated amount for a job. If you are a custom manufacturer or custom fabricator, you also have to estimate your jobs. The more data you can collect regarding hours worked on prior jobs, the more accurately you can estimate the cost of labor on new jobs. It is quite logical to conclude that if your operational costs fall at or below the estimated amount then you will have maximized you profitability.

Objective Forecasting:

You don’t have to be in business long to discover that accurately forecasting your business is almost an “art-form”. The good news is that a barcode or automatic data collection solution can make forecasting much more of an objective science. Companies forecast sales, cost of operations, capital equipment requirements, and so on. Having an abundance of accurate, real-time data facilitates precise forecasting, which in turn helps balance schedules and labor requirements, not to mention your sales pipeline.

For example, manufactures and fabricators want to track materials used on job, labor, tooling and material inventory. Up to the minute information regarding job status will identify bottlenecks and other issues during the manufacturing process. For a construction company that manages several jobs at a time, being able to re-deploy expensive tools and equipment from one job to another quickly will avoid unnecessary duplication of equipment and make it easier to schedule jobs tightly.

World-Class Customer Service:

There is no doubt that happy customers make companies money. By using a barcode tracking system, it is possible to provide customers up to the minute information regarding products, orders, shipments and inventory which will result in higher repeat business.

For example, REI (Recreational Equipment Inc.), a Seattle based nation wide sporting goods retailer, is able to provide store inventory to customers visiting their web site in real-time. A system such as this will result in increased sales, reduced churn and greater customer satisfaction. All of this is made possible with an barcode inventory system which allows the retailer to connect their vendors and suppliers, incoming freight, distribution centers and stores.

Barcoding 101: What you need to know - F

image credit: Conor Lawless