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Friday, July 11, 2014

Summit 2014-Recap of 5 Technologies to Watch

Our Customer Advisory Summit took place on June 23rd and June 24th and let's just say Canadian summers are made for great discussions and a good ol' fashion Jay's game. We talked shop, tech trends, product roadmap, and the top five tech to keep an eye on. All in all, we gained a lot from the conference and our customers. So for all those who attended, thank you for the insight and the inspiration! 

So what does this have to do with Minority Report? In 2002, this film displayed some sci-fi-esq gadgets on the big screen and it was a marvel. But today, the future is here--now and many technological elements we have admired on films and tv shows are either in the works or is available in its infancy to consumers. We discussed the top 5 at Summit to watch for, but before we dive in, why did we pick what we picked?

-Ubiquitous – using existing devices or infrastructure
-Low Cost
-Consumer Driven
-High and rapid ROI
-Easy Migration into Supply Chain

So without further adieu, let's see the list.

5. Zatar by Zebra Technologies. Make no mistake, everything is getting connected. By 2020, IDC estimate that there will 212 billion connected devices. The exciting part about Zatar is that it's one platform to manage your entire network of devices. It's cloud-based, multi-device friendly and can be used almost anywhere. Zatar is designed to be intuitive on use, but powerful enough for enterprise applications

4. Near field Communication is a set of standards for smartphones and similar devices to establish radio communication with each other by touching them together or bringing them into proximity, usually no more than a few inches. You can find this tech in your wallet (credit cards, debit cards) and the sim card inside your phone. With NFC, you can grab a colleague or partner's files with a swipe, get automated payments and manage your workforce via mobile. The convenience it offers is addictive and we can't wait to see it get refined even more.

3. Wi-Fi Positioning Systems (WPS). The WPS uses a MAC address of your WiFi device
based on signal strength received by access points to create a geospace within your physical location
and connects to it. It can be used to track location of equipment/personnel, determine available resources,
track efficiencies and capacity and give rise to a new generation of intelligent software.

2. Payment Capture. From this blog entry, you already know we're a fan. 

1. Wearable Technology. Think google glasses, smart watches, but...bigger. An integrated piece of tech that does everything your mobile phone can and hopefully even more in the near future. With wearable technology, it can/will utilize the above 4 and will hopefully bring forth a new era of productivity, efficiency and accuracy. 

Posted By: Jeff Lem @ 10:53:27 AM


Tuesday, June 17, 2014

Customer Facing Applications – Using Payment Capture to Make the Most of Them

Superman is copyrighted to Warner Bros. Original image is from the official DC Comics bio page, which can be found HERE.

Businesses are moving faster than a superhero in flight and it's up to us to keep up. While secretive serums and radioactive spider bites may not be readily available, payment capture might just be the ticket that will prevent us from being left in the dust. 

Each day, every business has many moments of truth that are both large and small; a salesperson closing a hotly contested opportunity, a customer finding out if an item is in stock, or the decision to have a repair performed on a piece of equipment. They may be consistent events that take place in your company daily, but epiphanies can definitely spring forth from them. 

These commonplace scenarios are where your personnel are working directly with the customer in what I refer to as a "Customer Facing Moment". Typically personnel leave these Customer Facing Moments with the
promise of an order and return to the office to generate a flurry of emails and paper work involving purchase orders, confirmations, and scheduling. 

What if we could turn these promises into something more binding at the time of the interaction?

A key function of our company is AIDC or automatic identification and data capture. The backbone of the business is the barcode – the design, printing, and scanning of it. We justify our existence on accurate and timely capture of barcoded information and then integrating it with POS, inventory, and asset tracking systems. Much of our work happens after an order is placed as we capture the movement of parts, assets, and inventory as a result of that order.

While this still is vitally important, our industry needs to evolve and position our technologies in the early stages of promises and budding relationships.

One such area involves adding payment capture or AIPC (automated identification and payment capture).

So what does AIPC look like? Let’s reconsider the aforementioned three scenarios:

1. Upon closing a sale, the sales rep takes out his iPhone and checks the weekly production schedule and advises the customer that in order to lock in production or delivery by next week he needs to make a 20% down payment now.

2. At the customer site, the sales rep reviews the online inventory and discovers there are two cases available in one of their warehouses out west. Anxious for the product because it could mean a stoppage in production, the customer decides to order the item and make payment for it on the spot.

3. In the field, the service rep advises the customer that the repair would be $200 but for $300 the customer can get a full year’s coverage on the device including getting it fixed today. The service rep then asks how the customer would like to pay and because the sum is under $500, the customer can choose to use his company credit card.

In each of above scenarios we've taken promises to complete a transaction and turned them into binding commitments.

Integrating payment capture into existing customer facing applications will shorten your sales cycle, dramatically improve cash flow, and turn prospects into customers in the matter of minutes. Businesses today are moving at the speed of thought – payment capture will allow you to seize that moment of truth and make the most of it.

Scanners On!

Jeff Lem

Posted By: Jeff Lem @ 1:09:23 PM


Sunday, May 18, 2014

Inventory Survey – The People Have Spoken

Original image by ddpavumba from freedigitalphotos.net

In preparation for our annual think tank and product development planning, we recently commissioned a materials management survey of 154 companies from across North America. While some replies were expected, we did get some surprises.

The results will be summarised in more detail in an upcoming report and slide deck, but here are the high level details:

  • Companies Surveyed: 154

  • Geographical Coverage: United States and Canada

  • Industry: Manufacturing companies in the range of $50M to $200M in sales

  • Survey Participants: Plant Managers, Purchasing Managers, VP Logistics, President, CEO

  • Period: March to April 2014

Top 5 Findings:

  1. Barcoding Usage. While 66% were using some form of barcoding, only 12% were actually employing barcodes to track inventory. This falls into the "no surprise / surprise" category in the sense that we knew many companies are using barcoding, however only a handful were actually using it to manage inventories

  2. Top Three Needs. The areas cited that could use the most improvement in order of mentions: Inventory Visibility, Inventory Counts, and Labelling Compliance.

  3. Top Three Benefits of Wireless Barcoding Transactions. In order of mentions: Inventory Movement Tracking, Inventory Counts and Inventory Accuracy.

  4. Most Common IT Tool used to Track Inventory. Laptop/Desktop computer by a factor of 4 to 1 over the next closest item, which was ruggedized handhelds. Smartphones and Tablets were used by roughly 15% of all respondents almost equal to ruggedized handhelds.

  5. Technologies most likely to Improve Inventory Accuracy. The clear winner in this regard was the 2D barcode like the PDF417 barcode shown below and  is used in the automotive industry. The closest item is mobile computing.

As mentioned earlier, we will be compiling a more detailed report of our findings in the coming weeks, but what the survey tells me is that companies are not using barcoding to their full advantage. Visibility and accuracy of inventories need to be improved, and key-punch entries into a notebook or desktop are the most predominant means of capturing inventory movements.

For ourselves and other companies like us, it also means there are still lots of upgrades, improvements and opportunities in the supply chain industry.

Scanners On!

Jeff Lem

Posted By: Jeff Lem @ 10:29:34 AM


Saturday, May 03, 2014

Naming Inventory Locations

Would a rose smell as sweet were it known by any other name? 

How you name your locations is critical to inventory visibility and hence, its accuracy. When considering how to name your locations, it’s always good to start with the widely accepted and common practise of this acronym.


Z = Zone               A= Aisle                                B= Bay                  L=Level

Zone can be a physical area bounded by walls or categorized by the type of goods it stores. For example: refrigerated vs. dry goods.

Aisle is simply the driving or walking lanes within that zone.

Bay is the vertical section.

Level is the exact spot within the warehouse.

Your warehouse may not be big enough to support Zones or even Aisles, but it’s always best to start with ZABL and drop any letters that don’t apply to your facility. In my observation with double deep or double wide pallet locations, I've seen a fifth character used to describe the pallet position within that specific location.  

So as an example, if you have a location as follows: A1B03  

This translates into Zone A, Aisle 1, Bay B and Level 3. If each location can accommodate more than one pallet you may have a location such as A1B031, where the final number 1 tells the warehouse worker that the pallet is either on the right or left side of that specific slot.

Now let’s have some fun with location names; once you've named your locations you can now layer business rules and logic, which define what gets done and how it's done within the warehouse. Consider the following:

  • Putaway logic that controls how high you can place certain items due to weight or safety restrictions, such as allergen containment.

  • Pick algorithms that allow you to break up orders into zones to lessen warehouse travel and equipment wear and tear.

  • Material Handling equipment that is restricted to use within certain zones and aisles of the warehouse.

  • Warehouse logic that splits up order lines by the type of material handling equipment needed to fulfil transfer or pick.

  • Workers who are limited to certain aisles or zones in the warehouse.

  • Pick paths that go up and down or serpentine down the aisle.

  • Optimal placement of related product groups to support efficient replenishment, picking, and cycle counting.

Done right, your locations will give you more than just visible inventory but also more efficient warehouse processes. So what’s in a name? I'd say plenty!

Scanners On!

Jeff Lem


Posted By: Jeff Lem @ 6:04:09 PM


Sunday, April 27, 2014

Zebra Acquires Motorola – What it Means

Motorola and Zebra logos are properties of themselves. 

 The purchase of Motorola’s AIDC business by the smaller Zebra Technologies represents the dropping of the final shoe. With industry consolidation between major OEM now complete, the remaining major players, Honeywell and Zebra have much in common: diversified offerings that include labels, thermal printers, handheld computers, software, and services.   

Their acquisition speaks volumes as to what’s needed to stay competitive and profitable in our industry. First you need a steady revenue base as evidenced by the labels side of the business. Next you need to provide all the ecosystem components to support the barcoded label from production to shipping or point sale checkout.

While hardware sales volumes have stayed steady, margins continue their downward march. Hardware is no longer the end point but rather the start of a business relationship that hopefully yields sales of higher margin products and services.  

For Zebra, I foresee the following:

  • Sell off Motorola WiFi Products Group. With end users taking a best of breed approach, WiFi is now becoming increasing dominated by companies who specialize in this space. Even Cisco is having a hard time fending off more nimble and aggressive competitors to the point that they are no longer the automatic choice in retail, education, healthcare, and the small/medium business space.  Zebra is taking on billions of debt to buy Motorola’s AIDC group and will be strategically hard-pressed to justify spending on wireless networking R&D.


  • Cross Selling. Channel managers will be given quotas for handhelds products, printers, labels and services. This requirement will be passed down to the reseller community to sell the ‘whole story’. Resellers who can support this strategy will be getting lots of attention and marketing support from Zebra.  


  • Go Slow Integration of Motorola. While Honeywell has a long history of handling very diverse lines of business that include aerospace to home security, Zebra is just starting to diversify its portfolio of offerings. Fortunately all the companies acquired thus far are complementary but at the same time I don’t see Zebra making significant personnel changes in the short-term.  Furthermore both companies are profitable and show a respectable combined revenue of $540,000 per employee, which is above the industry average of $350,000 per employee.   


  • Internet of Things Push. Zebra has been quietly developing its own IoT platform called Zatar. The acquisition of Motorola’s AIDC group will propel clients to seriously consider Zebra’s IoT offering as it’ll include support for consumer smartphones, Zebra printers, and Motorola handheld computers. No one has this broad of a range and I expect Zebra to make a big push as employees will become much more efficient and productive with location based technologies and device management for their Zebra and Motorola devices.

As for the reseller community, we will adapt by expanding into services and products that complement the portfolios of both Honeywell and Zebra. This means taking a more holistic approach to a customer’s needs and ultimately upping our capabilities to deliver solutions and service programs that are integrated and internet based.

Scanners On!

Jeff Lem

Posted By: Jeff Lem @ 4:37:10 PM


Monday, April 14, 2014

Daily Cycle Counts – Your Inventory Accuracy Insurance

Image by Ratch0013, from freedigitalphotos.net

It can be said that your health is a function of a number of daily disciplines such as getting enough sleep, eating right, and even flossing. Similarly your warehouse health is a function of daily habits such as labelling, receiving, putaway, picking, shipping, and cycle counting

In theory if you practise perfect warehouse processes, the need for cycle counts is eliminated. However, we live in the real world and stuff happens or doesn't. Just as we buy insurance to protect our property and valuables, daily cycle counts are your insurance against losing inventory accuracy.

Daily cycle counts.   There are several considerations and approaches for performing a cycle count.

ABC Categories. This consists of categorizing your inventory into three categories: The ‘A’ category products are counted most frequently and account for 80% of your sales, while the ‘B’ products represent the next 16%, and ‘C’ represent the final 4%. This approach will only make sense if your sales fall into the 80/20 rule, whereby 20% of your products represent 80% of your sales. The number of inventory turns for those products will determine how frequently you count them.

Pick Location. A simpler approach is to count every pick location at least once per month.  Locations with greater through-put should be counted more frequently. When counting pick locations it is important to not have any picking or replenishing activities being performed.  

Raw Materials. You can take a value based approach whereby the most valuable items are counted more frequently or take a volume based approach, which counts the items most frequently used. I prefer a hybrid approach of counting items that are the most valuable and most frequently used. However, even the lowest value items are important and their sudden absence can affect production.

Trace. When counting it is also important to note trace information such as expiry dates and lot numbers. As result, cycle counts is often followed by turning over inventory that has expired or are about to expire.  

Schedule It. Whatever way you decide to count your inventory, it is required that you create a schedule and execute daily on that schedule. Choose a time during the day that you are not picking or performing replenishment activities to do so. In fact replenishment activities should be performed after the daily cycle.

Performed correctly and consistently, cycle counts allow you to maintain a high level of inventory accuracy with a minimum of disruption to warehouse operations. 

You know what they say, cycle counts are that "stitch in time that saves nine."

Scanners On!

Jeff Lem

Posted By: Jeff Lem @ 12:11:08 AM


Saturday, April 05, 2014

Drawing Lines in the Warehouse - quite literally

By Vlado, from freedigitalphotos.net

I am certainly biased when it comes to barcoding and inventory accuracy, but those black and white lines on your packages and cases are essential elements in the daily battle of maintaining accurate inventory records.

However, you should consider a low tech solution that involves using another type of line. In this regard, I'm referring to the use of boundary lines to establish areas in your warehouse that physically segregate or quarantine inventory items from the general inventory population.

Here are some areas that we've created in our warehouse and perhaps some new ones that you may want to consider:

1) Holds Receiving Area – we often get shipments up to 8pm despite our warehouse team leaving each day at 6pm. So we’ve created a holding area where ‘unscanned’ goods get dropped into. This way when the warehouse team returns at 7am the next day, they don’t have to second guess which items need to be received into the system. We made the area large enough to accommodate a full trailer load of 24 pallets.

2) Production Area – in order to keep our presses running with minimal downtime, our material handlers bring enough rolls of paper to support the entire shift. However to the untrained eye, there is no way anyone can tell if those materials sitting in front of the press have been issued or simply there temporarily.   So we’ve created a production area marked off with a line and a post. Any items past the line or post mean those products have been issued to the press and are not to be touched.  

3) Finished Goods Receiving Area – individual rolls of labels come off our presses and are packed into boxes which are subsequently placed onto pallets. The job of the material handler is to then perform a finished goods receiving scan against that pallet of goods. To ensure the scan first takes place before being brought into the warehouse, we've drawn a line across the floor separating the production from the warehouse and there is a sign that says, “All items crossing this point must be scanned”.

4) Rework Area – returned product is automatically placed into these specially marked locations to be inspected and if required they‘re re-worked into a saleable condition. When product is in these areas, everyone knows not to pick them for orders or move them into another location.

Inventory accuracy is solely not the result of using high tech tools, it’s about being pragmatic and choosing the solution(s) that deliver the best return. And sometimes it may just involve drawing a line or two.

Scanners On!

Jeff Lem

Posted By: Jeff Lem @ 4:16:51 PM


Sunday, March 09, 2014

Inventory Accuracy – The Holy Grail of Warehousing

Image from IFC

The ultimate purpose of following best practices in a warehouse is to ensure high if not 100% inventory accuracy. Yet when you ask people to define inventory accuracy you get as many answers as there are flavours at Baskin Robbins.  Even experts in logistics and supply chain all agree that getting a common definition is next to impossible because it all depends upon what products you’re tracking, who you’re tracking it for (finance, operations, management, customers), and how you’re going to measure inventory accuracy.

Let’s start with an accepted definition of inventory accuracy:

“When the on-hand quantity is equivalent to the perpetual balance (plus or minus the designated count tolerances).”

Note the use of “plus or minus designated count tolerances”. That tolerance is typically left to the discretion of the consumer of that inventory accuracy information. Consider the example of a warehouse with 100 locations with supposedly 100 items in each location of equivalent value. Let’s say after the count, we discover one item missing in each location. To the Finance department this means inventory is 99% accurate but to Operations, inventory accuracy is zero.

One department is doing cartwheels with the prospect of minimal write-down and financial exposure while another has gone into panic mode trying to figure out the process issue and anticipating the complaints from customers.

The trick is to develop a number of different measures for inventory accuracy. One that meets financial requirements and another that meets customer commitments and/or operational goals.

I'm going to share with you today a very basic one that has served me well both for our labels warehouse and for customers.  This calculation generates three measures of inventory accuracy.

First start with these ingredients:

  • Perpetual Inventory records by part number showing both quantity and unit value

  • Inventory Count records by part number

  • Variance between the two counts

  • Cost value of the inventory

  • Number of locations counted

So for example let’s say you counted these three part numbers across 7 locations your warehouse:

Part Locations to be counted (7) Cost per part Perpetual QTY Perpetual Value Count QTY Total  Count Value Variance and location
123 TF 1, TF 6, TF 4  $10  100  1000   90   $900   -10 in TF 1
124 TF 2, TF 8  $5   150  750   160   $800    10 in T2, T8
125 TF 3, TF 9  $20  200    4000   180   $3,600   -20 in T3
Total     450 5750 430 5300 40

From this count we get the following Inventory Accuracy numbers:

Inventory Accuracy by QTY is 40/450 or 91.1% based on quantity count

Inventory Accuracy by Location is 3 locations having discrepancies from a total location count of 7 or 58%

Inventory Accuracy by Cost is total perpetual value divided by counted value: $5300/$5750 is 92.2%

While inventory accuracy at the quantity level of 91.1% may be acceptable to Operations with buffer stock of 10%, it may not be acceptable to Finance that 7% of the cost of inventory needs be written off the books and certainly unacceptable that 42% of locations hold inaccurate inventories.

So the trick is to use several different measures of Inventory Accuracy that way when you’re talking about this very important stat it truly means something to the person who is basing his/her decisions on that measure.

Scanners On!

Jeff Lem


Posted By: Jeff Lem @ 6:56:14 PM


Saturday, March 01, 2014

Drivers of Accurate Inventory - Negative Inventory

Image by SOMMAI from FreeDigitalPhotos.Net Available for purchase HERE

Welcome to a new series on Accurate Inventory!

In this series I'm going to get pretty granular as accurate inventory requires doing a lot of little things right. As a result you’ll get specific takeaways for immediate use in your warehouse.  

Negative inventory is a common occurrence in inventory systems and I liken it to free radical build-up in our bodies as a result of metabolic reactions.   Many healthcare advocates link oxidative damage caused by free radicals causes to ageing.   In a similar vein allowing negative inventory to build up in your inventory control system causes rapid ‘ageing’ of products in the warehouse.

The most common causes of negative inventory are:

  • Inventory moves are not recorded. Thus when product is picked or shipped from a location that hasn't been updated, you may be physically moving product but to the system it’s not there.

  • Inventory moves are recorded but the wrong location is entered. Same result as the above when product is subsequently moved from where it really is.

  • Buying parts under one part number code and incorrectly shipping out on another. We’re guilty of this practise ourselves and happens frequently especially on non-labelled products such as third party service contracts, which are treated by our accounting folks as an ‘inventory’ item.

  • Back flush activities of parts triggered by the receipt of finished goods in a manufacturing process or auto issue of raw materials in support of a manufacturing bill of materials. In this situation, the paper work trails the actual physical receipt of the goods which should in theory set the bin quantity to the right amount once it has been entered.

So while your overall quantity for that part in question may be accurate, you've thrown off your inventory accuracy as that location(s) really doesn't have that quantity, because it is offset by another location(s) with negative quantities.  

This means you must set up a weekly or monthly program to resolve these negative amounts. Simply zeroing them out is not enough; you need a Negatives Report identifying all instances by location of any products 'contaminated' by a negative quantity and then perform a cycle count to confirm quantity and location.

An ounce of prevention is worth pound of cure, this is one warehouse habit worth doing on a regular basis.

Scanners On!

Jeff Lem

Posted By: Jeff Lem @ 12:47:03 PM


Monday, February 24, 2014

The Four Sins of Paper – The Case for Paperless

Texture from: http://www.texturezine.com/wrinkled-paper-textures/

Wireless warehouse transaction processing is used in the vast majority of large warehouse operations over 50,000 sq ft. But when considered, across all 800,000 warehouses in North America only 30% use any form of barcoding or warehouse management system.

Today I’m making the case that irrespective of size, all warehouses should at the very least have barcoding and/or wireless technologies to support paper sparse or preferably paperless warehouse transactions. And for the large warehouses, they shouldn't rest on their laurels - the next level is getting more visibility of products outside the four walls which includes products in the yard, in transit, at offsite 3rd party warehouses, to products sitting on customer shelves.

A common trait amongst Best in Class (BiC) warehouses is the sharing of electronic data with supply chain partners. Before BiC warehouses had this capability, they first perfected electronic sharing of data within their own four walls – a “walk before you run” development process.

Let’s start with the issues of Paper:

  • Gets written down incorrectly – we've all been guilty of writing down the wrong number either in the right sequence or not at all. 

  • Illegibility – do your 5’s look like 8's or your 7’s look like 2's? Your may have no problem reading your own writing but others may complain that your writing looks like a doctor’s prescription. 

  • Entering the wrong data – 1 in every 200 keystrokes is the error rate associated with data entry practises.

  • Lost data – perhaps a politically correct term would be "misplaced", someone puts down the completed pick list by the water cooler or leaves it in the lunch room, only for it to turn up a few days later.  

All of these issues contribute to a major problem: lack of timely and accurate information within your warehouse operations. No surprise that most WMS providers including ourselves usually can find a 1 to 1 ½ year ROI on WMS by simply driving out paper.

In keeping with the walk before you run philosophy, here are four suggestions for getting started with barcoding and wireless technologies. And given the cost of WiFi routers and barcode scanners, there is really no financial excuse for making this investment; your real ‘cost’ is putting in the time to make it happen.

  1. Inventory Counts. Ingredients are: barcoded locations, parts, and scanner (which could even be your smartphone). Scan and download the file to an excel spreadsheet and then reconcile to your accounting system. At a minimum do-it-every-month, you have 12 turns a year, frequently more.


  2. Inventory Moves. A good librarian will tell you that having the book in the library is worthless unless they know exactly where it is.  Likewise knowing that the product is ‘somewhere’ in the warehouse makes you reliant on someone’s memory or plain ol' luck for it to turn up. Track products in and out of locations and back up those moves with regular counts.


  3. Labelling. Make sure all incoming products have a barcode that is scan-able. If you refer to my Inbound Best practises blog  it can get pretty complicated. However the good news is that this endeavour is not costly but does require a reworking of your receiving processes to include re-labelling and/or making the sure the barcoded part number on the product is compatible with your existing part numbering schema.


  4. Create a Reward System for Accurate Inventory. It doesn't have to cost you much, maybe a pizza lunch, movie tickets, or just recognition. Making new work processes into habits is much easier with an incentive system. A 5% improvement in inventory accuracy on $100,000 of inventory is $5,000 less in inventory you won’t need to write-off or order because you can’t find it in the warehouse.

As we march towards online inventory to support customer queries and/or shopping, inventory accuracies must be in the high 90’s. Anything less means you’re throwing away money developing great looking websites and marketing promotions driving online demand.

Online shopping websites are only as good as the inventory and warehouse processes supporting that data.

Scanners On!

Jeff Lem

Posted By: Jeff Lem @ 10:29:20 AM


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