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Insight Works

Barcode Scanning Software for NAV


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When it comes to managing a warehouse, even a small warehouse, there is no shortage of data and so, in today's world, for any company to be competitive, they are going to need a data management system.

Whether you choose an ERP system like Microsoft Dynamics NAV or something else, the data management system you choose acts as a repository for your warehouse data. Once a system is integrated you may feel you have complete control over your operation. However, in many cases, your system will expose the inefficiencies in your warehouse. For example:

  • Inventory overstock tying up working capital
  • Expedited purchases due to inaccurate inventory records
  • Lower than expected margins or lost receivables
  • Increased office overhead
  • Poor customer service

How accurate is your data?

In all the examples above, the root cause of every issue can be traced back to inaccurate data. Had the warehouse data in the “system” been correct, you wouldn't need to overstock inventory in fear that orders can't be filled or, maintain more staff to track down the missing stock.

Even when a Warehouse Management System (WMS) is used, many physical transactions are still recorded on paper. For example, handwritten receipt confirmations, inventory counts, and order fulfillment picks. At some point, physical transactions are converted to a digital form. This process is time-consuming and error-prone. And every error comes at a cost which I'll demonstrate later in this post.

For a company to realize a competitive advantage, the information within their data management system needs to be accurate. So, how can Inventory Managers and Warehouse Personnel ensure their warehouse data is accurate? One answer is barcode scanning software for NAV.

Why consider barcode scanning software?

When it comes to tracking "stuff" in a warehouse, barcode scanning is currently the most accessible in terms of cost and universal acceptance. In a nutshell, barcode scanning enables warehouses to process transactions much more quickly and with significantly fewer errors. A transaction can include inventory counts, receipts, put-aways, picks, shipments and more.

Consider a small distributor with several hundred SKUs (stock-keeping units). Without barcode scanning, performing inventory counts was a major undertaking. Overtime staff was brought in on weekends to perform the manual counts. Staff would then spend the next full week entering and reconciling the data. In total, 144 person-hours were required.

Now, consider the same scenario using barcode scanning software. This time, the solution consisted of 2D barcode labels for product and inventory bins with employees equipped with handheld scanners. The same warehouse was counted and reconciled in only 12 hours.

The efficiency of barcode scanning resulted in more frequent inventory and cycle counts. Faster cycle counts improved data accuracy, which also improved productivity and fill rates. Order fulfillment was more accurate which improved shipping times and ultimately customer satisfaction. With only a reduction in the necessary labor, the barcode system paid for itself after the first annual count.

The cost to implement barcode scanning

Most out-of-the-box barcode scanning software solutions are priced to deliver a high payback and short return on investment.

Getting a system to match your unique requirements may cost more. Experienced outside consultants can help determine ROI when considering factors like linear barcodes vs 2D barcodes, mobile devices vs fixed terminals, and potential hardware and software providers.

Is barcode scanning worth it?

Barcode technology can have instant positive effects on a company's bottom line. Reduced picking errors, inventory levels, carrying costs, and data entry errors are just a few of the examples of where a barcode system can help you achieve significant gains from a relatively small investment.

Payback on barcode scanning software varies but can be as short as one inventory count. The following tables illustrate how much of an impact a simple barcode system can have on your operations.

Savings from Reduced Data Entry Errors
Data Entry Transactions Per Day 100 500
Keystrokes Per Transaction 30 30
Keystrokes Per Day 3,000 15,000
% Critical Keystrokes 10% 10%
Critical Keystrokes Per Day 300 1,500
Errors Per Day 1 5
Cost to Correct Errors $25 $25
Cost Per Day to Correct Errors $25 $125
Work Days Per Year 250 250
Annual Cost Savings $6,250 $31,250

By identifying and reducing data entry errors at the most critical points, you can eliminate costly data entry errors.

Savings from Reduced Picking Errors
Lines Picked Per Day 500 1,000
Error Rate 1% 1%
Errors Per Day 5 10
Error Reduction Rate 50% 50%
Error Reduction Per Day 2.5 5
Cost to Correct Error $25 $25
Daily Cost to Correct Errors $62.50 $125
Work Days Per Year 250 250
Annual Cost Savings $15,625 $31,250

“Cost to Correct Error” is a blended average, considering both internal and external error identification costs. If recognized quickly, the cost could be as low as $5, whereas a mistake found later in the sales/delivery process could cost up to $75.

Savings from Reduced Inventory
Assumed Reduction Rate 5% 7.5%
Inventory Value $5.000,000 $5.000,000
Annual Value of Reduction $250,000 $375,000
Assumed Carrying Cost % 15% 15%
Annual Cost Savings $37,500 $56,250

Inventory barcode systems provide real-time, accurate inventory information, that can be used to run at leaner inventory levels.

Conclusion

When considering barcode scanning software, it is not a matter of "if" you should implement it. Rather, it's a question of "when". When you decide to adopt a barcoding system, make sure you know where and why it will make a difference to your operations. Selecting a system that accurately reflects your business processes will ensure that you receive the most from your productivity investment.

Learn more about how to improve efficiency with barcode technology by downloading the white paper Keeping the Physical World and the Virtual World in Sync.

3 Responses to “Barcode Scanning Software for NAV”

  1. Barcode scanning is one of the most useful processes in a warehouse. It has not only significantly reduced human error but also human efforts and time consumption. It is a boon not just for huge warehouses storing millions of products or supermarkets having a variety of products or giant e-commerce companies selling almost everything but for small general stores as well.

  2. Steve says:

    My company uses NAV (going to purchase the Warehouse Module), and we want to implement barcoding. I am a bit confused dealing with outside consultants right now. Why do we need extra software? Is the bar code software simply the software (from any third party) that links the scanners to the NAV system on our servers? Or is it possible to buy out-of-the box solutions, as you suggest, and set it up ourselves.

    Overall, can we do this ourselves or do we need to spend tens of thousands of dollars on consultants and licensing, etc.?

    We have 3 warehouses with about 800 SKUs right now and want to track inventory, shipping, receiving, etc..

    Thank you kindly,
    Steve

    • In order to leverage handheld devices to scan barcodes in NAV you’re going to require software, like you pointed out, in order to interface between the hardware and NAV. As for integrating things yourself, that will depend on how NAV savvy you are. Using the right NAV Partner has its benefits as they will be able to identify gaps as well as help configure the solution specific to your needs. As with many things, there are high-end expensive solutions on the market but there are also options for smaller operations that won’t break the budget. Regardless of the solution, whenever you’re integrating a 3rd party solution that interfaces with NAV, you will require a NAV user license. Often, the license is where a lot of the cost comes from. I work for Insight Works and our solution is Warehouse Insight. You can check it out here: https://www.dmsiworks.com/products/mobile-warehouse-data-collection/