Inventory Data Collection Chapter 2 PDF

INVENTORY DATA COLLECTION CHAPTER 2 INTRODUCTION The classical view of inventory data collection is that of employees filling out forms of various kinds throughout the warehouse and production areas, which are then forwarded to a central data entry location, where hordes of clerks keypunch the data...

INVENTORY DATA COLLECTION CHAPTER 2 INTRODUCTION The classical view of inventory data collection is that of employees filling out forms of various kinds throughout the warehouse and production areas, which are then forwarded to a central data entry location, where hordes of clerks keypunch the data into a central computer database Some of the data systems that can be used to collect inventory information are shown in figure 1-1. 1.1 BAR CODING A bar code is a set of alternating parallel bars and spaces of different widths that signify letters, numbers, and other characters. When scanned by a laser beam attached to a computer chip containing a decoding algorithm, this cluster of bars and spaces is converted to an alphanumeric character. STEPS Whatever the type of bar code used, the subsequent processing steps are the same. A bar code is manufactured at the point of use, typically by a special application printer that only produces bar codes. The bar code is typically a self-adhesive one that is affixed to the item to be tracked; this procedure can be automated if the volume of activity warrants investment in such machinery. Then the item being tracked moves through whatever process is occurring and is scanned at fixed points in the process. This scanning can be conducted by a person with a handheld scanner or by an automated scanning station. The scanner extracts information for the bar code and feeds it directly into the computer database Bar coding is tailor-made for inventory transactions. For example, an inventory identification number is often randomly assigned to a component or product and so has no meaning to the person entering it into the computer system for a transaction. This situation leads to inaccurate data entry. To avoid this problem, bar codes can be attached to all inventory items, which are then scanned as part of any inventory move transaction 1.2 WIRELESS DATA TRANSMISSION When a transaction is entered into a computer terminal, it travels through a wire or fiber-optic cable to a database for storage. Unfortunately, this data entry method requires one to walk to a fixed terminal location in order to enter data, which is not always possible for employees who collect data as they travel through a facility The answer to this problem is to obtain a terminal that sends wireless transmissions to a receiver that in turn is directly linked to a database. Wireless applications are directly applicable to inventory transactions Assuming a high level of staff training, the adoption of a wireless system combined with bar-coded transactions can push a company’s inventory transaction error rate to well under 1% 1.3 RADIO FREQUENCY IDENTIFICATION (RFID) A major problem with any manually operated inventory system is the vast number of transactions required to track receipts into the warehouse, moves between bins, issuances to the shop floor, returns from the floor, scrap, and so on. Every time someone creates a transaction, there is a chance of incorrect data being entered One way to avoid these transactional errors is to use the new RFID technology. PROCESS The most likely implementation scenario for RFID is to first roll it out within the warehouse and manufacturing areas of a company, using it to track entire pallet loads (good for receiving and inventory control transactions) and then implementing it for smaller tracking units, such as cases (good for picking, cycle counts, and shipment transactions) or even individual items (most applicable for workinprocess inventory or retail applications). This implementation approach allows for a progressively increasing investment in the technology as a company gradually learns about its applicability. ADVANTAGES OF RFID The ability to provide inventory count information without any manual transaction keypunching.This eliminates the need for manual receiving, inventory move, and issuance transactions. To provide real-time information about the precise location of all inventory, which can assist with locating missing inventory, arranging cycle counts, and auditing stock. The activation of an alarm if a tagged item is shifted off the company premise 1.4 DOCUMENT IMAGING The basic structure of the document imaging system is shown in figure 1-2, which illustrates several ways to input documents into a computer, the most common being the use of a scanner. When a document has been converted to a digital format by this means, it still cannot be stored in the computer database because there would be no way to retrieve it The document imaging solution is a good one, but its costs must be considered. For a small organization, the cost of the computer hardware and software may be too high in relation to the cost savings anticipated from converting a small volume of documents to a digitized format. However, large-volume organizations dealing with tens or hundreds of thousands of documents find that the cost of such a system is negligible in comparison to the benefits gained. 1.5 ELECTRONIC DATA INTERCHANGE Data collection is particularly painful when data is received from a company’s trading partner and must then be reentered into the company’s database. There is always the risk of data entry errors, which can be caused by simple retyping mistakes or a misreading of the received document These issues can be eliminated through the use of electronic data interchange EDI EDI PROCESS FLOW 1.6 SPECIALIZED FORMS OF INVENTORY DATA COLLECTION A good way to reduce the transaction error rate is the use of voice picking, under this technology, employees wear a self-contained computer on a belt. Steps The computer communicates by radio frequency with the company computer in real time It accepts picking information from the main computer and translates this information into English The worker also talks to the computer via a headset, telling it when items have been picked. The computer converts these spoken words into electronic messages for immediate transfer back to the main computer This approach allows employees to record transactions in real time while they pick and to do so without having to walk to a computer terminal to enter the information. This is a particularly effective solution for people with limited writing skills