Supply Chain Management is an essential task, that every successful business has to perform. These operations help users asses the viability & functioning of their businesses. There are many methods/technologies that one can use to perform these operations. One of them is an AIDC technology known as bar codes. Barcoding to optimize supply chain management is a popular choice amongst industries due to its affordability and simplicity.
So, let us discuss the benefits of implementing bar codes in SCM operations.
What is Supply Chain Management?
A Supply Chain refers to the entire journey of a product/item from procuring the raw materials to its purchase by a consumer at a retail outfit. Managing this entire operation line is known as the supply chain management definition, or SCM.
SCM was coined for the first time, in the year 1982 by Keith Oliver, a British logistician. However, we’ve been practicing this since the advent of the assembly line in the 20th century.
SCM plays an essential part in maintaining the efficient and well-coordinated functioning of an organization. Nowadays, we use more advanced methods to accomplish SCM, instead of manual and time-consuming activities, we utilize modern technologies like Barcoding.
Applications & Benefits of Barcoding in Supply Chain Management
Barcoding or Barcodes are a type of AIDC technology (Automatic Identification & Data Collection) used for asset identification & tracking. These codes are capable of storing binary information in a visual format of lines & symbols.
So, let’s check out how industrialists have utilized this technology to optimize the management of their supply chains.
(A). Reduction in Operation Cost
A basic part of SCM is to track the items/assets moving from one facility to the next. In case this operation is being performed manually, the labor required to accomplish this task increases exponentially as the volume of the items increases.
This results in a large amount of money being eaten up by non-productive departments/jobs, adding to the overall cost of operations. By implementing a barcode system, businesses can automate and speed up this task. Therefore, reducing the number of people required to carry out SCM and reducing the cost.
In addition, unlike other SCM & AIDC technologies, investing in barcoding does not include any significant cost. Thus, making it a cost-effective solution.
(B). Allows Time & Resource Reallocation
As we discussed above, manual means of managing a supply chain require a lot of manpower & it’s very time-consuming. And this problem can easily be solved with AIDC technologies as mentioned above. However, there is another benefit of implementing these systems. By freeing up labor and saving their work hour from going into SCM, businesses get the added benefit of reallocating said employees to other production operations.
(C). Improved Accuracy of Data Collection
The biggest issue with assigning repetitive and boring tasks to people is that it becomes hard to focus on them as time goes by. This results in increased chances of errors and mistakes. In addition, a human employee will always carry a risk of making a mistake. The easiest way to fix this is to replace manual intervention from the error-prone part, like recording the product identification number, time, etc. This is exactly what businesses achieve with barcode implementation.
These systems greatly reduce the chances of errors in recording the incoming & outgoing items from the inventory. In some cases, it may even eliminate these problems. This helps the employees in locating and retrieving items quickly and preventing stock-outs, improving customer experience, and maintaining quality control.
(D). Automate Asset Identification & Tracking
A big element of supply chain optimization with the help of barcoding, is automation. While this technology does not completely automate this operation, it brings it significantly closer.
Automation allows for SCM to become much more efficient and streamlined, allowing for improved productivity. It also provides better data collection capabilities by linking to a centralized database, providing better transparency & monitoring capabilities.
(E). Reduction in Errors & Improved Security
As we already mentioned above, the positive impact this technology has on error reduction. In addition to improving accuracy, this also provides an improved measure of security. With transparency & accurate monitoring, barcoding allows businesses to reduce the loss of stock & incidents of thefts.
(F). Aesthetically Professional
Lastly, a good reason to integrate this technology into SCM is purely from a psychological point of view. Almost every successful business uses AIDC technologies like these. By implementing them into your own business, it provides your clients and consumers a measure of confidence and professionalism from your side. This helps in building up goodwill and returning customers.
Comparison Between RFID & Barcoding for Supply Chain Optimization
Radio Frequency Identification or RFID, much like barcodes, is a type of AIDC technology used for asset identification & tracking. However, unlike its predecessor, this technology does not require visual input or line of sight to work. RF uses radio signals to communicate information between the reader and the tag mounted on the items.
While RFID is more advanced and provides additional functionality, deciding which is better is not a zero-sum game. Both these technologies have their advantages & disadvantages.
When it comes to data storage capacity, radio frequency identification is the clear winner. Barcodes at most can store up to 2953 bytes of data (2.953 kb), on the other hand, an RF microchip can store anywhere from 64 bits to 32 Kilobytes of data.
Due to this, generally, barcodes can only help identify the product group of an item. While RF tags can help users identify the exact ID of an item along with all the other information.
Bar Code scanners require visual input to identify items, i.e., if the code is not properly visible, then the system will not work. This means that the code should be in line of sight, and close enough to be decipherable. This leaves such systems with a severely limited range, at most these systems can work up to 40 to 45 feet, with image area scanning.
On the other hand, RF doesn’t require a line of sight or visual inputs. As long as the components can receive the radio signals, the system will work. RF tracking can work through obstacles like walls, boxes, etc. Giving these systems an effective range of as much as 100 meters, for active systems.
The speed at which items are identified and recorded plays an essential role in the viability of SCM operations. Bar Codes generally work slower compared to RF systems. A scanner can take 1 to 3 seconds to scan and register a code. On the other hand, an RF reader is capable of reading up to a thousand tags in a second. And since it does not require a line of sight, it will read every tag within its interrogation zone.
(D). Functionality & Versatility
Barcodes are simple and cost-effective, the only function they provide is to store identification information about an item. However, RFID not only provides greater storage capabilities, but the newer generations contain telemetry sensors. These sensors can provide information like temperature, pressure, movement/acceleration, etc.
This allows the users to know the condition in which an item is stored. Allowing for better quality assessment and control, without opening the packaging. This helps in reducing instances of defective products & recalls.
This is one criterion where RF stands no chance of winning. The additional technology (microchip) & production methods that go into making RF systems, makes them significantly more expensive to implement. On average, radiofrequency identification costs 10 times more than barcoding systems.
(F). Environmental Issues
Much like humans, even machines are not completely immune to errors. With AIDC systems, this comes in the form of misreads or unable to read/communicate. In the case of RF systems, the biggest issue comes in the form of metal surfaces & liquids. These can cause issues like signal degradation, detuning, and distortions.
For barcodes, anything that prevents visual inputs like damaged code from smudge & scratches, dust, lack of light, etc., can cause the system to not work.
The last point of comparison is the operational lifespan of both these systems. The lifespans of both these technologies depend on various factors like environmental conditions, method of manufacturing & their types.
For example, direct heat & sunlight can be detrimental for most types of barcodes, as they can cause fading. Codes made using thermal transfer printing with resin ink have a much better chance of resisting such damage, but they are also the most expensive. On average, a bar code can last as much as 4 to 5 years indoors, and as less as 4 to 6 months.
On the other hand, the lifespan of an RFID depends on the type of tag being used. Active tags require an internal battery to operate, these batteries can last for 3 to years. And needs replacing after that, if the tag design allows it. However, in the case of passive tags; this work is based on signal backscattering. And therefore, they can virtually last forever.
Frequently Asked Questions About Supply Chain Management & Barcoding
Q1. What is the role of barcodes in warehouse management?
Warehousing is a part of the supply chain; these facilities are used to store the finished products before they are shipped off to retail outfits. Bar codes can play an essential part in managing these facilities. They allow the employees to keep track of the incoming & outgoing items. They also help them locate items & prepare orders quickly, by providing them the location of each item within the facility.
Q2. What is a barcode and how it works?
A barcode is a form of AIDC technology that can store a limited amount of data in a visual form. Basic bar codes consist of a pattern of black and white horizontal bars that represent a binary “0” and “1”. The scanners then identify these patterns & convert the binary information into a readable format.
Q3. What is barcode in supply chain management?
A bar code is a popular means of conducting supply chain management operations. These systems allow users/businesses to identify & track their items/assets throughout the supply chain.