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Cost impact of 1-D barcode read rates in logistics operations

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Matt Engle, 09-16-2011

As your volumes ramp up in your distribution centers, you are presented with a challenge to keep pace while keeping costs down. You need to reduce the cost of logistics per order, reduce dependency on labor (especially seasonal labor), and improve the overall efficiency of your DC. I propose that improving 1-D barcode read rates within your shipping processes will be a great help.

Cost_impact_of_1d_barcode

As a bit of a case study, this chart shows an analysis of the cost impact of read rates.  As one example, if your DC ships 25 million packages per year and at a 92% read rate, most likely with a laser barcode scanner, the packages that you fail to read have to be manually reworked, costing you over $750,000 per year in re-labeling costs. If you were to invest in either your current laser barcode scanner technology or perhaps in new image-based barcode reading technology, to move that read rate up to 98%, you would save over $500,000 a year.  If you could drive that read rate all the way up to 99.5%, that savings total would top $700,000. It’s pretty clear to see the impact in terms of labor costs that the barcode reading process has on your operation. If you’re interested in reviewing this more in depth, suggest you download our White Paper: When 99% Read Rate Isn’t Enough—Benefits of Improving Read Rates in Logistics Scanning Applications.

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