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Barcodes Savings

Barcodes Saving Money:

Scanning a barcode is more accurate and takes less time than writing things down. Using barcodes also eliminates the time required to identify and fix mistakes in writing data and keyed entry. Let’s look at an example, using the 12-digit number that is attached to a product in a grocery store.

Blue Barcode

Imagine that you were hired to write down all the unique 12-digit product numbers in a small grocery store. How long would it take you to write down each 12-digit number? A guess would be two seconds to recognize the number, and another six seconds to write it down. So for each product number, it would take you at least 8 seconds for each number, so at most, you would write down 450 numbers per hour.

Now we have to adjust for the errors you will make….on average 1 out of every 300 characters written. The 450 numbers you write down every hour represent 5400 digits. There will be 18 errors on average, making 18 of the 12-digit numbers incorrect, so your real production of good numbers is 432 numbers per hour.

The average time to locate and scan a barcode is roughly 2 seconds, or 1800 per hour.

That’s a big difference, huh? The calculations above are conservative. Studies have shown that using barcodes yield an 8 to 10 fold increase in productivity.  In this example, using barcodes eliminates a painstaking and error prone process. And we haven’t even started talking about the cost of finding and fixing any of the errors, or the time of keying your sheets into the computer, etc.

Barcodes Saving Money – Another Example

Most barcode scanners are coupled with computer programs that bypass manual writing or keyed entry entirely. That means that the data automatically updates the central database when the barcode is scanned. That means there’s no delay between the manual sheet being generated and the data actually being entered into the system.

Using barcodes to automate the process of manually entering data often pays for itself in a very short time. One client was required by the government to keep a log of the man-hours spent on each assembly that made up the finished product for a contract. The client installed barcode scanners and a little database program just to keep track of time spent working on the government contracts so that reporting to them would be easier.. The operator scanned his employee number and the work order for the job when he started and the program started a clock. When he was finished, he scanned the two numbers again.  Eliminating the process of writing down start and stop times saved the company 30 minutes per employee per shift. So for every 10 employees, making $15 per hour, working 220 days per year the savings was $16,500 per year. HINT: The system (equipment and software) cost less than that!

Generally, the cost of implementing a barcode system will pay for itself in less than a year in direct labor savings. Against that type of pay back, its easy to see why those barcodes seem to be just about everywhere.

Barcodes Saving Money – Too Many Examples, Too Little Space

We could provide example after example of why using barcodes makes sense and saves money. Just to give the words more life, here are some real-life examples of some our clients who reaped the benefits of barcodes saving money:

  • A pharmaceutical company uses gas cylinders as part of the manufacturing and R&D process. The system we helped them implement improved stock levels for each building, stopped vendor double-billing, and improved customer response time by 60%. ROI was 60 days. They saved over $100k in the first 3 months.
  • A circuit board manufacturer was required by their customers to put a unique barcode on each board. If the code was un-readable, they assessed a $2,000 fine. If it was a duplicate, it was a $5,000 fine. Fines were averaging $9,000 per month. We stopped the fines with a system that paid for itself in 2 months.
  • The General Managers of a construction company complained the company didn't have enough heavy equipment like backhoes and bobcats. With an asset tracking system the company discovered GM's hoarded heavy equipment when they weren't using it. They cancelled an order for 2 backhoes.
  • A plumbing house rents portable toilets as a side business. Customers were complaining units weren't serviced. Each year, 1% of the units went missing. Now, they can track deliveries, service and inventory. Now, there's no loss of units. They have proof of service and have generated 12% more sales for extra service calls. They can predict their rental levels so they know when to buy new units or rent them from their competitors.
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 Barcodes Saving Real Money