Picking the Best Bar Code or RFID system for Your Company

Ok, assuming you have read the previous post "The Cost of Doing Business?" and have collected information for 30 days, you now know what it is costing you to do business the way you are doing it now. What do you do now?

The first step is to research what solutions are available to meet the challenges that you have identified. If you are a "do it yourself" type of person you could get on the internet and look for solutions. If you are not, you could seek the help of a consultant who specializes in these types of solutions or possibly contact the vendor of your ERP system for a referral.

Most of the major ERP systems for small to medium business have solutions available. How do you choose? I would recommend that you assign one person to be the "Bar Code or RFID Advocate". This person will be the leader of the project and will interface with back office staff, warehouse staff and management. I hate to use the word "committee" but it is very important that all the people affected by this change have buy-in and can participate in the process. If any one group tries to shove this down the throat of any other group, the project will fail.

The Advocate will get information and conduct phone conferences with potential vendors. Look for vendors that are interested in your specific challenges and are better at listening than talking. You need them to understand your business. After screening out the vendors that you are not interested in, arrange for a phone conference with the committee and the vendors that you want to explore further. Don't rush to a software demo (common mistake). This phone conference allows the team to ask questions of the vendor and gives the vendor more information about what specific concerns the team has. After the phone conference have the team decide if they want to proceed to the next step with this vendor, the demo.

Integration. Integration. ERP Integration to me this is the most important factor. You can have the greatest Warehouse Management System with all of the bells and whistles but if the entire enterprise is not able to access inventory information in a real time basis, it only helps part of the company, the warehouse. Speaking of bells and whistles, many of these things are "cool" and people get excited about them. But evaluate if you will really use them and if they will really contribute the effectiveness of the organization.

Make sure the system fulfills the basics:

• PO Receiving – Items received and the ERP inventory is updated as close to real time as necessary.
  
• Physical Inventory - The system should allow both full and cycle counts and provide for reconciliation of variances.
  
• Inventory Movements – Warehouse Transfers, Bin moves (if the ERP system supports the same item in multiple bins)
  
• Pick, Pack Ship – Allows for picking orders, scanning what is packed and integration to a shipping manifest system. Invoices and packing slips should be generated.
  

During the demo, pay attention to the handheld devices user interface. Is it easy to use? Remember warehouse staff will be the users and many of them are not computer savvy. If the system is supposed to be integrated, have the vendor show how it can validate real-time against your ERP database and have them demonstrate transactions being created in your ERP.

A word about hardware. There are specific devices that are designed for the rigors of a warehouse environment. Don't waste your money on cheap devices. You will just spend more money over time in replacing broken devices and loss of productivity. The same is true of wireless networks. Don't go to Best Buy and get a $50 access point. There really is a difference between the $50 ones and the $900 ones. If your warehouse is over about 35,000 sq', I recommend an RF or an RFID survey to determine exactly what the hardware requirements are. Make sure the vendor agrees to provide any additional hardware needed at no extra charge if the survey proves to be inaccurate.

After you think you have found the perfect (there is no perfect) software, how do you insure the vendor is qualified. There are two things that people "think" they should do. One is go and have a "site visit" and the other is references. When people ask me for references, I reply "Do you want the good ones or the bad ones?". Of course a vendor is only going to give you references that are good. So, what purpose does it serve? However, this is an opportunity to hear someone else's experiences. Find out what they felt they did right and wrong on their project. Learn from their journey. It's OK to inquire about the vendor too but in my opinion there is little value. One thing that I do recommend is to contact your ERP software publisher and ask them about the vendor. If there are or have been problems, they will probably have heard about them and you are already their customer.

Site visits are another waste of time, money and energy. Put yourself in the place of the company you want to visit. These people, who you don't know, want to come to your facility and take up your time for free to help them make a purchase decision. Again, will the vendor give you a bad site to visit? In my opinion anything that can be gained from a site visit can be done on the phone.

So now it is time to evaluate the quote(s) from the vendors and apply that against your costs that you calculated. What is a reasonable ROI? In my opinion a Bar Code system should recover cost in about 18-24 months, a RFID system in 24-36 months.

Obviously, there is more involved in this process than I can cover in this short post. If you feel it would be helpful, I can be available to help you with this process.

Next, Implementation     Stay Tuned……………..