April 2003 • OVolume 9, Number 04 INDUSTRY NEWS & MACHINERY www.timberlinemag.com • 800-805-0263

     Bar Code Tracking Helps Pallet Companies Do More than Count 


Not long ago most pallet companies  did not even have a computer, let alone a  bar code tracking system. Things have  changed significantly in recent years. The  personal computer is basically standard  equipment in the office of today’s pallet  companies, and bar coding has begun to  find its way into many pallet businesses.

Unfortunately, bar coding has remained  somewhat of a mystery to most pallet  plant and sawmill owners. You hear  such statements as, ‘Chalk can accomplish  the same effect,’ or ‘A simple to use system  that does not even require a personal computer.’  My favorite one is: ‘You can just go  buy a scanner and design the system yourself.’ 

To a certain extent, the above statements  are true. If all you need to do is provide  a count for each employee, then  chalk, colored pins, Bingo Markers or paint  are all you need. You can implement a basic  system or possibly create your own if  you have the knowledge. After all, bar coding  is not rocket science. The principle of  bar coding is simple: a laser differentiates  the black bars from the white spaces and  sends a decoded message to a computer or  device that is smart enough to do something  with it. The difference is always in  the software. 

When bar coding was first introduced  in the late 1970s for supermarkets in the  grocery industry, let’s assume that all the  system did was provide a count. Again, you  could simply provide some sort of mark to  identify the item. The mark was the price tag. Before bar coding, the cashier would  type the amount from the price tag into a  cash register to tally an order. What was accomplished? 
1. The cashier had the ability to know  the price of the item without having to call  someone or look it up. This saved a tremendous  amount of time. 
2. The customer was able to verify the  price paid and enjoyed the convenience of  moving through the checkout line more  quickly then before.   

Some Important Benefits of Bar Code Tracking System   
  • Easily Change ProductValues, Piece Rates
  • Improve EmployeeAccountability
  • Adjust InventoryAutomYtically
  • Reduce AcWountingProcedures
  • Produce ComprehensiveReports

  Some critics believed that bar coding  would slow things down in supermarkets.  The customer would dislike the absence of  a price tag, and the system may be more  prone to errors. 

Of course, the critics could not have  been more wrong. In fact, when bar coding  was finally introduced, the following advantages  were immediately realized: 
1. The cashier no longer had to search  for a price tag that may have been affixed  in a different area each time it was labeled. 
2. Since the bar code was printed directly  on the item, it was always in the  same exact place, simplifying the search  process. 
3. The supermarket no longer had to  contend with dishonest customers placing  a different price tag on the product and trying  to sneak it by at a less price. 
4. There was no longer the chance of  the cashier ‘ringing up’ the wrong price. 
5. Price changes and items on sale no  longer required a different price tag. 
6. Checkout lines became shorter. In  fact, even the customer could check out an  order —as they now do in some stores. 
7. Inventory records were automatically  adjusted, allowing re-ordering to be  more efficient and enhancing just-in-time  supply chain management. 
8. Physical inventory became more  streamlined and could be done less frequently.  (Ever wonder how a store can stay  open 24 hours, seven days a week, yet the  shelves are always stocked?) 
9. Accounting went from a nightmare to a daydream almost immediately. 
10. Human error plummeted in all categories. 


You can begin to see the picture. What  if the bar code in the supermarket was not  attached to a software system? Basically, it  would be as if we had no bar coding. Bar  codes would have to identify both the price  and the product. Price changes would require  re-labeling. Every advantage listed  above would be lost. Think about it: it  would be virtually impossible to achieve  all of the benefits without the software  package. 

Why use bar code technology without  all the benefits? It does not make sense.  You may as well use chalk or paint. A properly  designed bar code system for a pallet  company should provide at least the same  advantages that bar code systems have provided  to the grocery industry. If it does not,  the skeptics would be correct. 

Why would someone need bar coding  in a pallet plant or sawmill environment?  The most common reason is to provide accountability  of employees. In the pallet industry,  this is especially true if you have an  automated line for repairing used pallets  and you want to keep your employees on  piece rate. Another reason is the ability to  know what is happening around your shop.  A bar code system can enable you to tell how profitable you are, calculate the production  yield of your equipment, avoid  human error, track products received and  shipped and work in progress. It also can  streamline your accounting. 

How much do you spend on components?  What is the true cost of your pallets?  Can you afford to reduce prices to a  customer when you are out-bid by a competitor?  Do you have customers that are  unprofitable? Are your employees doing  the right job? Are they costing you money  by not properly upgrading a pallet? (Example:  if they plug a pallet instead of plating  it.) 

All these questions and many more  can be easily answered by utilizing a welldeveloped  bar code based tracking system. 

Bar codes are the method of data input.  In automotive terms, it is the body of a car,  the place where you enter. The tracking  system is the brain that makes it happen. In  automotive terms, it is the drive train of the  car. What good is having a shiny new car if  it can’t take you anywhere? 

Generally, the lines of an automated  pallet repair system are set up so that all the  repaired pallets travel down a conveyor to  stackers or workers who stack them. In a  piece rate environment, you need to know  who did what. Bar coding in its most basic  form enables you to obtain this information.  Affix a bar code label to the pallet after  it has been repaired, and send it down  the conveyor to be scanned and counted by  some type of system. 

But bar coding should not be used as  a simple counting mechanism. Remember,  if you are going to invest in a system, you  should get as many advantages from it as  possible even if you do not plan to use all  of them immediately. 

A well-designed bar code based system  should provide the following benefits: 
1. Change the product’s values without  having to change the label. 
2. Set or change piece rates without  having to change the label. 
3. Accountability of employees even  after the pallet has left your facility. (Remember:  your customer is the final quality  control inspector; you want to be able to  track any problems back to the person who  was responsible.) 
4. Adjust inventory automatically.  (You may actually care about how much  you have in inventory one day.) 
5. Reduce accounting procedures by  automatically calculating compensation,  costs, inventory, etc. 
6. Produce comprehensive reports that  are available for a wide range of time periods.  Once you begin analyzing the data,  you will want to compare your findings  with previous weeks, months and years to  evaluate how well your business has progressed. 
7. Expandability of the tracking system.  Databases should be designed so that  other systems can access them. You may use  your automated line system to adjust broken  inventory into repaired inventory and  a wireless system to add broken inventory  from customer purchases. In the future you  may want to track off-site repairs. Can a  vendor’s system be upgraded to a Palm Pilot  system? 
8. Additional systems should be able  to use fixed data about employees, products,  customers and vendors without  changing it or adding the data into another  database. 
9. Scanners should be designed to  function in the environment of a pallet  plant. Scanners may be purchased for $200,  but if you have to replace it everyday, it  becomes the most expensive scanner on the  market. 
10. Equipment should be warrantied.  Does the vendor have a loaner policy in  case your scanner goes down? 
11. Can the system compensate for a faulty or broken scanner? 
12. A system should be designed specifically  for a pallet or sawmill shop.  Adapting an off-the-shelf system will rarely  meet the real needs of the pallet professional. 
13. Will the vendor modify the program  for you? 
14. Can the system handle tracking for  a pallet repair program? Will it determine  the quantity of pallets repaired for each  customer and the quantity of each grade?  Does the system generate a report for these  repairs to simplify accounting processes?

  The most important question is: will it  work for you? Have you seen the system in  action anywhere? Are the vendor’s customers  happy with it? Are they happy with the  vendor? 

Investing in a bar code system is only  the beginning, and the sale is only the tip  of the iceberg. Any vendor can sell you a  bar code system, but not every one can  stand behind it. 

If you purchase a tracking system from  an equipment vendor, ask what their relationship  is with the software firm. Are they  only distributors? Did they develop the  system themselves? If so, how did they  know how to meet the needs of a pallet  professional? Did they copy someone else’s  ideas? Were they ever in the pallet business?  How do they protect against employee  theft? Can an employee simply  scan his labels to get additional production? 

You could hire Microsoft if you had  enough money, but even Microsoft could  not develop a system tailored to your  needs if it does not know what they are. Do  you know what your needs are? Chances  are, if you are considering bar coding for  the first time, you probably do not even realize  exactly what you need. That is an advantage  of hiring a software company with  experience in the pallet and sawmill industry.  It can get you going on the right track.  If you need customization, chances are it  will be minimal, and the additional cost  will be negligible. You don’t want to invest  in bar code equipment that will be laying  in a box somewhere in a few years. 

I once visited a rather large pallet  company that had installed a bar code system  on its automated repair line. They  called me in as a consultant to analyze the  system. I found an array of problems that  most other industries would not have. The  system had not been designed by a software  company that specialized in the pallet industry,  and it showed. The pallet company  actually had to lock the scanners during  employee breaks because workers would  simply scan their labels over and over, and  the system had no way to avoid or detect  this cheating. It was a very simple problem,  but it never would have occurred in a distribution  environment. In addition, there  was virtually no accountability for grade  once the pallets were unloaded from the  stackers. There was no inventory adjustment,  and the system was not compatible  with any other tracking software. In fact,  the vendor that sold the system did not  even have any other products developed  for the pallet industry, so expanding it — to  a wireless device to track new pallets or calculate  yield from a saw, for example — was  not an option. 

Don’t get caught with a fancy counter.  Tracking systems should be able to integrate  into everything you do at your business.  Anything else just does not make  sense. 

Do not allow yourself to wake up one  day in the driver’s seat, only to find that  your car will not move. Junking the car and  buying another one does not add up. You  may as well have started with a box of  chalk until you could afford the entire car. 

(Editor’s Note: Alan A. Miceli is president  of Innovative Data Systems Inc., which  has been developing custom tracking  systems for the pallet industry for over  six years. The company’s Pallet Track®  is used by pallet businesses across the  U.S. and Canada. Alan has spoken on the  topic of tracking systems at National  Wooden Pallet and Container Association  meetings. For more information, contact  Alan at (631) 244-0069 or e-mail at  amiceli@pallettrack.com.)
Fixed mount scanners should be connected to a computer based tracking system
that does a lot more than just count pallets. It should track loads coming in,
compensation, identify repairs, adjust inventory and more.

Any type of system should allow for expansion. Even if repairs are being done at the customer’s site. A palm based System will
allow just that. You can even synchronize the data without ever having to come back to the office.