Posted on Sep 27, 2010
The UK market for automatic data capture systems, which includes solutions like barcode systems and inventory management software, continues to hold strong at about £200m of value per year. Why? Most implementations save the customer money with a quick return on investment – perfect for a recession.The market remains remains strong, led by suppliers such as Motorola (formerly Symbol Technologies) and Zebra Technologies. The e-commerce trend with its continued growth as a % of total sales in the UK has boosted the need to automate backend operations in the supply chain, moving from manual data entry to automatic data capture. Barcode systems tend to be the first step and then voice and RFID are also being deployed.
The nature of e-commerce with its low overheads providing the potential for higher returns is why we are seeing more and more e-commerce businesses growing in size.
As they grow, three key factors are persuading online retailers / wholesalers to find ways to improve their inventory management and general warehouse operations:
1. Time is more critical than ever. Next day delivery is the status quo. Customers expect to be able to order by 5pm today online and receive the product tomorrow. For the warehouse manager this means an increase in throughput towards the end of the day that can put pressure on warehouse pickers and increasing the likelihood of mis-picking errors. Automatic data capture speeds up goods in, picks and despatch making warehouse operators dramatically more productive productivity in many companies.
2. For online retailers, returns are costly to handle. Unfortunately increased throughput and growth makes mis-shipments from picking errors more likely when using a manual system instead of an automatic data capture system. Mis-picking produces a double error for the warehouse manager as their inventory quantities will be incorrect for both the item that should have been picked and the item that was incorrectly picked. A double blow! By having automatic data capture by scanning the items that the system instructs you to pick, the operators are unable to pick the incorrect items.
3. Thirdly and most importantly, customers sent the wrong thing get upset and will go elsewhere with the click of a button. Customer loyalty can be even more strained online due to the faceless nature of the operations compared to the high-street which means good customer service is one of the key areas for online retailers to add value in. Getting the automatic data capture part right with your warehouse system, rather than paper pick lists, will have a direct impact on customer satisfaction as it does today.
It is the combination of these three factors that has driven e-commerce sites of varying sizes to seek out automatic data capture methods with their warehouse management system using barcoding for the first time. Traditional paper-based order picking with manual data entry can see error rates in and around 5% or more. The introduction of simple inventory control software using barcoding can help to reduce that error rate to less than 0.01%. For online retailers of any size this could save them from losing customers everyday, but also help them beat the high-street retailers like Amazon does…all without even having to speak to customers.