Before the summer of 2007, a large petroleum distributor was having trouble filling orders on time, even with the help of a customized accounting system. The problem was inventory records; they were rarely, if ever, accurate. In addition to grappling with stockouts on a regular basis, the distributor had to invest in a large amount of safety stock because workers often could not locate product.
An investigation revealed that manual, paper-based processes were at the root of the problem. When inventory had to be moved within the warehouse, employees were given printouts detailing the changes. After moving the product, workers gave the printouts to an office employee, who would then enter the changes into the accounting system. Sometimes, it took two days for the data to make its way into the system.
Investing in Accuracy
Previously, corporate managers thought their customized Accpac accounting system from Richmond, British Columbiabased Sage Software would be sufficient. Later, however, they realized they needed specific technology for inventory accuracy. To keep costs down, they maintained Accpac for accounting purposes but contacted Florence, Ky.-based Enterprise Mobility, a company specializing in mobile information systems.
From start to finish, Enterprise Mobility worked with the distributor to improve its inventory accuracy. The first step was equipping employees with Intermec CK-3 handheld computers. The CK-3 devices were selected because their long-range scanning capabilities enable barcode scanning in dimly lit, overhead racks.
Enterprise Mobility then installed custom software on the handheld units so they could communicate with newly installed wireless access points throughout the warehouse. Though the software was customized to the specific ways in which warehouse workers performed their jobs, it could still interact with Accpac to retrieve product location data and update movements immediately.
When employees receive product into the warehouse, they scan the product and location tag and then move the product to storage locations. Users can also use the handhelds to look up products and view the current inventory in other warehouses.
If a supplier changes barcodes on the exterior of the packaging, the user can link the new barcode with the distributor’s internal brand code by scanning the new barcode and choosing the correct brand code.
Installing the mobile technology was the first phase of a threepart improvement project. Within six months, the petroleum distributor had moved on to the second phase: automating the delivery process outside the four walls. That phase is currently in process. The final phase, allowing salespeople to access order status from the field, is expected to begin soon.
After just the first phase of the project, the distributor enjoyed an immediate 30% gain in inventory accuracy. And, customers appreciated the more efficient and timely order fulfillment process.