Bar Code Systems for transaction capture in Manufacturing – Opportunity to save on data entry efforts and making it error free.
Familiar scene to all of us at medical shops is employing bar code readers by chemists to invoice sale of medicines. They make efforts to affix a bar coded sticker on each strip of medicine in advance, because of the ease it provides at the point of Sale (POS). This is also in extensive usage at many retail outlets.
We can visualize scope for employing bar code readers in many manufacturing operations like Purchase, Inventory, Dispatches, Invoicing and Fixed Assets. Of course such options are justified where volumes are large. Apart from saving on data entry efforts, we could achieve error free transaction capture and retrieval through bar code readers.
Bar Codes are a useful interface for your internal information systems with the external world. Let us see some examples.
In the case of purchase of raw materials or other goods, the process starts with an indent by the user, or the store-keeper. Indent will get converted into a Purchase Order (PO). Each PO will have a distinct number, Vendor details, one or more items on order, and corresponding quantity, rate and value details. Our attempt is to save data entry efforts, when a supplier makes a supply. For this purpose, we could print a bar code sticker for the PO Number, and Items covered in the PO and send it along with the PO. If multiple supplies are expected, there could be multiple stickers, with an advice to the vendor to attach relevant bar code stickers on his Delivery Challan or Invoice, which accompanies the consignment. Instead of stickers, we could use detachable perforated sheet at the bottom of the PO. When the material reaches the factory premises, Security, provided with bar code readers, could capture the relevant numbers, which then onwards will be passed on through the ERP or other system in use. In a transaction of this type, the only data entry to be done is by the store keeper, for the actual quantity received or accepted.
In the case of product dispatches or invoicing, the process would involve packing the product, labeling it with product code, customer code etc. By bar coding these numbers, we could have error free weigh bridge transactions, Invoicing documentation and security clearance for the right transaction. These code could be used at the customer’s end as well.
I see significant gains in usage of bar codes in Fixed Assets. In medium and large organizations, usually fixed assets are in large number. Such assets also my move from place to place within the organization. Considering the statutory requirements of keeping proper fixed asset records, re-emphasized through the Indian Companies Act 2013, to preserve location of each asset, which would enable periodical physical verification, a well-designed bar code system could come handy. We could think of two types of stickers to be fixed on each asset, one referring to its distinct number, usually called the Asset tag, and the other referring to the Location number or seat number. Whenever we need to conduct a physical verification, we could employ bar code readers to do a quick job. Related requirements to make this successful are capturing the location number as well in the Fixed Asset Record, and an asset transfer process which involves updating fixed asset record and replacing the location sticker.
You may find many more areas in your operations, to employ bar codes. It is a cost effective solution deserving attention.
For more articles from me, and to know about my book “Translating Operations into Money”, please visit www.operationstomoney.com
Thank you for your attention
Tulasi S Sastri
FCA., CISA
CAclubindia
