Top Benefits of Barcode Inventory Management

There is a lot of inventory out there in the possession of the more than 33 million businesses just in the U.S. Granted, not all of those businesses deal with inventory or handle inventory directly. Freelancers and drop-shipping retailers either don’t have inventory or never deal with the inventory sold to their customers.

For many of those businesses, inventory is central to their continued survival. This makes inventory tracking and inventory management crucial elements of their business operations.

Given that manual inventory control is prone to errors, though, many businesses now rely on barcode inventory management systems. Wondering what benefits that kind of system gets you? Keep reading for the top benefits you can see from using barcodes in your inventory management.

Less Training

Manual inventory control systems can prove dauntingly complicated. That kind of complexity makes training and mastery times substantially longer. At best, anyone new dealing with the inventory control system will need a lot of direct supervision.

Long training times and extended periods of direct supervision drive up your new-hire costs without necessarily providing a lot of benefits in return.

One of the key benefits of barcodes is that they don’t require extensive training time. New employees don’t require a full understanding of the inventory control system. All they really need is a working knowledge of the scanning system.

Most businesses can get a new employee up to speed on the essentials of the scanning system in a few days. After that, they can flag down a supervisor or knowledgeable coworker if they run into a scanning issue they haven’t seen before.

Reduces Human Error

Any time you ask a person to deal with strings of numbers, there is a good chance you’ll see some human error. It doesn’t take a lot of distraction to transpose two numbers when you have to manually enter them into a system.

Yet, a basic error like that can throw off your inventory control system. It will read that you don’t have inventory that is sitting on a shelf, while simultaneously saying that you do have inventory that doesn’t exist.

Even worse is if someone forgets to enter inventory changes after filling an order. Coworkers can waste a lot of time looking for things that the system tells them should still be out on a shelf somewhere.

When your employees just scan barcodes on packages, you eliminate those kinds of errors. The right data automatically enters the system.

If someone checks in a package of parts, the inventory control system increases the number of parts available. If they scan something as they take it down to fill an order, you get an automatic reduction.

Even more importantly, scanners don’t do things like transpose numbers.

Reduce Total Inventory

One of the important features of enterprise resource planning software is projecting inventory needs in the future. One of the biggest weaknesses in that feature is bad data.

If your inventory control data isn’t accurate, you get bad recommendations. The ERP system will underestimate or overestimate your inventory needs for different products. Those false estimations can create a number of effects.

For products that the system tells you to over-order, you wind up with capital sunk into products that don’t generate prompt revenue. That’s money you can’t invest elsewhere.

For products that the system tells you to under-order, you can wind up with a stockout situation. This is a bigger problem than many businesses initially realize.

While you may not see a stockout as a customer service issue, customers will often treat an inability to buy the product they want as a customer service failure. People who have a bad customer service experience will often abandon a brand or business.

Barcodes help ensure that you have very accurate data, which means you get much more accurate buying recommendations from your ERP system. That can let you reduce your overall inventory load.

More Accurate Order Fulfillment

Speaking of customer service, few things will frustrate your customers more than getting an incorrect order. After all, how happy were you the last time you opened a package and found the wrong product inside?

For B2C businesses, you can expect angry or frustrated emails or calls to your customer service line. With luck, you can just ship out a replacement of the same product to the customer. Even so, there are still problems.

You will lose at least a little credibility with the customer for the flawed order. If they’re a regular customer, they’ll probably stick with you but they won’t trust you as much. Beyond that, you lose money on the shipping and the wrong inventory going out the door.

For B2B businesses, getting orders wrong can cost your customers real money in delayed projects or even lost customers of their own. That situation can cost you a lucrative customer forever.

Using barcodes can do a lot to ensure that nearly all of your orders go out with the correct inventory in the box or package. Your customers stay happy, which helps ensure your bottom line in the long term.

It Saves Time

One of the single biggest problems with manual inventory control approaches is that they are very inefficient in terms of time spent. There are some hard physical limits on how fast people can punch in numbers. Plus, no one gets faster or more accurate at it as a shift drags on.

Instead, they become slower and less accurate as they get tired. If they realized they made a mistake, they spend even more time correcting that mistake.

If they don’t catch the mistake, it will eventually cost someone time. After all, someone must fill out paperwork about the seemingly missing inventory.

A barcode scanner is a comparatively fast alternative. The scanner doesn’t get tired, assuming its battery can hold out for an entire shift.

It works just as fast every single time. Equally important, it remains just as accurate with every single scan.

You save time on the data entry portion. You also save time by avoiding the need for error corrections due to someone getting tired and mistyping a number.

Theft Reduction

No one likes to think that their employees will steal from them, but it’s a sadly common occurrence. Beyond that, checking-in inventory is a particularly good opportunity for it. At least, it is if you aren’t monitored too closely by a supervisor or camera system.

Manual entry inventory control is particularly susceptible to this kind of theft. The employee can just say that vendor’s order arrived short and walk out with your merchandise.

Unless you already suspect that the employee steals from you, you won’t have any reason to doubt them. After all, other people can get orders wrong, too.

Barcode scanning makes this kind of theft much more difficult. Instead of just saying that something didn’t arrive or arrived short, they must avoid scanning the inventory entirely and conceal it. No easy feat in a busy work environment.

If they do scan it, they would need a lot of computer know-how to get into the inventory system and alter the numbers. Assuming you have good access control procedures in place, your average employee probably can’t pull that off.

Barcodes Are Cheap

While most of your inventory will arrive with a barcode right on the package, that’s not the only use for barcodes. Maybe you want custom barcodes for scanning at the register for better sales tracking.

If you make products, you’ll need fresh barcodes every time you introduce a new product or even a new version of a product. You can even use barcodes for things like internal tracking of equipment.

The good news is that generating and printing barcodes is an inexpensive process. You can find software that will help you generate the barcodes.

Barcode label printers are surprisingly inexpensive, particularly if you don’t need to do a lot of high-volume printing.

It’s a fast, cost-effective solution for a lot of data collection needs surrounding physical products and equipment.

Scaling

If your business takes off and you want to expand or even open another location, your inventory management will only become more complicated. Manual inventory management will become increasingly less tenable and less reliable.

A barcoding inventory system will help you scale up without making huge sacrifices in accuracy, assuming your staffing keeps pace with the demand. It should also help you avoid unacceptably high levels of human error even under the increased demand.

Barcode Inventory Management and You

While businesses can limp along for a while using manual inventory management approaches, it’s a short-term fix to a long-term problem. It’s also a problem that will only get worse as your business grows more successful.

Barcode inventory management approaches let you boost efficiency, reduce time spent, costs, and human error. As an added bonus, it becomes a deterrent to employee theft and cuts down on training time.

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