MEFApplication Uses Of The Marine Industry I2of5 Carton...

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APPLICATION USES OF THE MARINE INDUSTRY I2of5 CARTON LABEL

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TABLE OF CONTENTS INTRODUCTION .........................................................................................................................................................3 PURPOSE......................................................................................................................................................................3 TERMINOLOGY..........................................................................................................................................................3 HELP IS ALWAYS AVAILABLE...............................................................................................................................4 THE CARTON LABEL STANDARD..........................................................................................................................4 INTENDED LABEL USE.............................................................................................................................................4 PRINTING THE CARTON LABEL.............................................................................................................................5

BASIC LABEL SYSTEM COMPONENTS.............................................................................................................5 STAND-ALONE LABEL SYSTEM.........................................................................................................................6 INTEGRATED LABEL SYSTEM............................................................................................................................6

DATABASE SETUP CONSIDERATIONS .........................................................................................................6 PACKAGING LEVEL INDICATOR LIMITATIONS.........................................................................................8 LABEL PRINTING CONSIDERATIONS ...........................................................................................................8

BUSINESS APPLICATION USES...............................................................................................................................8 BARCODE SCANNING OPTIONS.........................................................................................................................9 COUNTING BY PALLET ......................................................................................................................................10

METHOD 1 .........................................................................................................................................................10 METHOD 2 .........................................................................................................................................................11 METHOD 3 .........................................................................................................................................................11 METHOD 4 .........................................................................................................................................................11

BUSINESS APPLICATION BENEFITS....................................................................................................................11 WORK-IN-PROCESS TO FINISHED GOODS TRACKING ...............................................................................12 PHYSICAL INVENTORY COUNTING................................................................................................................12 ORDER PICKING TO SHIP...................................................................................................................................13 RECEIVING............................................................................................................................................................14

IN SUMMARY ...........................................................................................................................................................16


INTRODUCTION The National Marine Manufacturers Association (NMMA) Mutual Efficiency Forum (MEF) committees for Aftermarket and OEM have both agreed to endorse the Interleaved 2 of 5 barcode format for carton labeling. The details of this bar coding requirement can be found in the document titled NMMA Interleaved 2 of 5 Carton Label Specifications. The reason for creating a standard carton barcode label is to create a consistency in carton identification from the supplier (manufacturer) to the customer (boat builder, distributor, or retailer), as well as from the distributor supplier to the retailer customer. A significant majority of the goods manufactured and distributed in the marine industry are sold in standard, pre-defined, carton quantities. Additionally, it is likely that collaboration between the manufacturer and customer would result in an even higher percentage of goods sold in standard, pre-defined carton quantities. This standard carton labeling will bring overall supply chain efficiencies to the marine industry. A company’s supply chain exists not only outside, but also inside, the “walls” of the company. Therefore, both the supplier and the customer will benefit from implementing the carton label and the application benefits its use enables. It is strongly recommended that you read the NMMA Interleaved 2 of 5 Carton Label Specifications document first, before continuing in this document!

PURPOSE The purpose of this document is to act as a guideline to help the marine industry company utilize the carton label within their business operations and computer technology. The cost of creating this label is minimal, and the benefits far-reaching in terms of better internal controls, cost savings, and customer service.

TERMINOLOGY An item is considered to be a unique product, different from other products in terms of characteristics such as style, color, and size. A style difference can include the packaging (glass versus plastic bottling), consistency (100% pure versus a mix), or item composition (plastic versus metal). Size differences can include the difference between a “small” and a “large” or the weight of one item variation when compared to another. The manufacturer is considered the creator of an item, even if the item’s production is outsourced. A company that buys products for resale but not directly to the consumer is the distributor. The retailer sells direct to the consumer. The boat builder is certainly a manufacturer, but sells their products direct to consumers or through dealers, and will be noted differently from a (parts or accessories) manufacturer.


The Interleaved 2 of 5 label is applied to case packs and master packs. (A master pack being multiple case packs in a larger carton.) A case pack is a carton containing one or more of the same item, where the quantity of the item is a pre-defined (agreed upon by the manufacturer and the customer) and consistently standard amount. If the manufacturer and customer agree that an item will be ordered in (pre-defined, consistently standard) quantities of 6, 12, and 18, an order quantity of 15 is not considered a standard amount, and the Interleaved 2 of 5 barcode label cannot be placed on the carton of 15. The efficiencies and benefits of this carton label degrade without carton quantity standardization; as such, exceptions should be kept to a minimum if not completely eliminated.

HELP IS ALWAYS AVAILABLE The NMMA is committed to not only helping define good supply chain practices across the marine industry, but also to helping member companies to understand and implement the mutually agreed-upon guidelines and standards. You may e-mail your questions to [email protected] or you may call the NMMA’s toll-free supply chain consulting help line at 877-922-7722.

THE CARTON LABEL STANDARD Briefly, the carton label standard was agreed upon because the Interleaved 2 of 5 barcode is commonly used across many different industries all for the same purpose: to represent, within a single barcode, the (pre-defined, standard) quantity of an item in a carton. The Interleaved 2 of 5 barcode is created by the manufacturer, who also creates the UPC from which the Interleaved 2 of 5 is derived. The supplier (manufacturer) and customer should work together to identify standard, defined carton quantities for each item the supplier sells to the customer.

INTENDED LABEL USE The Interleaved 2 of 5 carton label contains no customer-specific information, such as supplier/vendor number, purchase order number, etc. This label is designed to be created and affixed to a (pre-defined, standard) carton of an item as (one of) the final steps of the manufacturing process. The information on this label, and its design, is intended to help both the supplier and the customer, and enable both parties to use barcode scanning technologies to improve operational efficiencies, lower costs, and improve customer service. Even without the use of barcode scanning technology, the label’s format and visual clarity will help reduce product identification errors. The Interleaved 2 of 5 carton label does not replace a shipping label or customer-specific label.


PRINTING THE CARTON LABEL Essentially there are two methods for printing the barcode carton label: either utilizing a stand-alone label system or an integrated label system.

BASIC LABEL SYSTEM COMPONENTS Regardless of the printing method you choose, you will likely need the following components for your label system:

1. Barcode labels and ribbons. Please consult the NMMA Carton Label Specifications document for the permitted label sizes. Standard paper labels are all that’s required. However, you may wish to consider using a more rugged grade of paper label if you are concerned that the shipping and handling process will cause your labels to be torn or otherwise defaced, rendering the barcode unreadable. (The label must survive the shipping and handling from the supplier to the customer.) The adhesive type should be “permanent”. You may wish to contact your company’s paper or forms provider to see if they also carry barcode labels and ribbons.

2. A barcode printer. Commonly known as “thermal transfer printers”. The standard 203 dots-per-inch (“dpi”) print head will work fine. Alternatively you may select to purchase a printer with a 300 dpi print head for finer quality printing if your budget permits. Printer models are generally gauged based on the expected number of labels printed on a monthly basis.

3. Barcode label software. This software will enable you to design and print your barcode labels. (Templates for the NMMA-recommended carton labels will be available for download from the NMMA web site for several common barcode label software packages.) Most software packages permit you to print “stand-alone” or integrate the software to your business computer system.

While the NMMA cannot endorse the use of any particular barcode hardware or software product, the following companies are generally known in the automatic identification market: § Barcode Printers:

o Datamax® o Zebra® o Intermec®

§ Barcode Software (PC-based): o BarTender® o Label Matrix® o Nice Label® o Wasp®

§ Barcode Software (AS/400®): o Cybra®


o T.L. Ashford® § Portable Data Terminals / Barcode Scanners:

o Compsee® o Symbol® o Intermec® o HandHeld Products® o PSC®

STAND-ALONE LABEL SYSTEM In a stand-alone system, the barcode label software does not communicate with any other computer system directly. Likely, the item data is stored in a data file contained within the barcode label software. (The item data file would have to be set up in the software first – barcode label software does not come standard with any pre-defined data files.) For more information on a stand-alone barcode label printing solution, please see the document NMMA Carton Label All-In-One Printing Solution.

INTEGRATED LABEL SYSTEM In an integrated label system, a business software application will either send data directly to the thermal transfer printer, or make a program “call” to initiate label printing through the barcode label software. The data to print on the label is passed from the calling business software application to the barcode label software, as is the label format to print. The item data would be resident in the primary business software application, not the barcode label software itself.

DATABASE SETUP CONSIDERATIONS Key data fields that would be required in the item master file of the primary business software application are: § Supplier’s Item Number § Item Description § Country of Origin § California Proposition 65 warning requirement § 12-digit UPC

There is a one-to-one correlation between the supplier’s item number and the UPC. However, there is a one-to-many correlation between the UPC (supplier’s item number) and the number of Interleaved 2 of 5 barcodes that can exist. This is because each Interleaved 2 of 5


barcode represents a pre-defined standard carton quantity of that item. As such, the item file setup may become hierarchical, whereby there is a second item data file created for pre-defined carton quantities that references the main item master file, as shown in the following schematic:

For example, if item number 12-AC-59P can be shipped in carton quantities of 6, 12, and 18, there would be one data record for this item in the Item Master File, and three corresponding data records for this item number in the Item-Carton Qty File, one for each of the pre-defined standard carton quantities of 6, 12, and 18. Because the Interleaved 2 of 5 barcode contains the left-most 11 digits of the UPC, it is recommended that the “linking” field between these two data files is the UPC, not the supplier item number, though it would not be incorrect to include the supplier item number as the key linking field in the Item-Carton Qty File. Do what makes sense and works best in your company’s situation. The Packaging Level Indicator is a one-digit code, the left-most (leading) digit of the Interleaved 2 of 5 barcode, representing the carton quantity. The following table shows valid packaging level indicator assignments (Series 1 to 4) for pre-defined carton quantities 6, 12, and 18:

Carton Quantity

Packaging Level Indicator –

Series 1


Series 2


Series 3


Series 4 6 1 2 1 3 12 2 4 3 5 18 3 6 5 4

Item Master File Item-Carton Qty File

- Supplier Item # (K) - Item Description - Country of Origin - CA Prop 65 flag - UPC

- UPC - Packaging Level Indicator - Carton Quantity - Pallet Quantity - Interleaved 2 of 5 (K)

1 : Many

The data fields contained in each data record in the item master file and the companion item-carton quantity file. Fields noted with (K) are suggested key data fields for the file.


There is not necessarily a “correct” way of assigning a packaging level indicator code, as long as the format standard in the NMMA Carton Label Specifications document is followed. All of the series above are acceptable. The code does not have to be in any order or relate in any way to the carton quantity it represents.

PACKAGING LEVEL INDICATOR LIMITATIONS As noted in the NMMA’s Carton Label Specifications, there are only 6 permitted packaging level indicators available for use. This is primarily because the packaging level indicator is a single-digit number and the NMMA is following industry guidelines whereby only packaging level indicators 1 through 6 are to be used. (Packaging level indicator zero is reserved for bulk items that are too big for a carton or are shipped one per carton.) As such, there are only 6 pre-defined standard carton quantities permitted per item. Manufacturers and their customers must collaborate and agree upon mutually acceptable carton quantities prior to implementing these guidelines.

LABEL PRINTING CONSIDERATIONS Note that the large carton label contains a data field for a lot/job/batch control number. As much as this label could be integrated to an existing computer system, the entry of the lot/job/batch control number will either be “dynamic” – that is, entered by a user for a specific run of labels – or controlled as part of the computer system, whereby the number of labels are printed for a known manufacturing run of items already identified with a lot/job/batch control number.

BUSINESS APPLICATION USES The following business applications can be automated with the use of barcode scanning and the Interleaved 2 of 5 carton label:

Business Application

Manufacturer Boat Builder Distributor Retailer

Work-In-Process to Finished Goods Tracking

X

Physical Inventory Counting

X X X X

Order Picking to X X X


Business Application

Manufacturer Boat Builder Distributor Retailer

Ship (Appropriate if order picking full cartons to ship to stores for

replenishment.)

Receiving X (Possible if the

manufacturer can have raw material suppliers use bar

coding).

X X X

Aside from being easy for visual identification, the carton label’s real advantage is when it is combined with barcode scanning technology. Thus, before discussing the business uses in more detail, an explanation of various barcode scanning options is required.

BARCODE SCANNING OPTIONS In brief, there are different options available for barcode scanning:

1. Keyboard Emulation: In keyboard emulation, a barcode scanner with a tether cord is connected via a “Y” cable to the keyboard port of a (personal) computer or terminal, with the keyboard plugged into the other side of the “Y”, and the vertical tail of the “Y” plugged into the keyboard port, effectively sharing the keyboard port between two devices (the barcode scanner and the keyboard). The scanner is basically non-intelligent. The user will scan a barcode when the software application’s cursor is in the appropriate screen data field. The term “keyboard emulation” is used because the barcode scanner is reading the data as opposed to the user having to manually key the data. The barcode scanner is thus emulating (“making believe”) it is the keyboard to the software application.

2. Wireless: In a wireless application, the non-intelligent scanner is still working the same as in keyboard emulation, but there is no physical (wire) connection between the scanner and the computer. The “Y” connection shares the keyboard port between the keyboard and a small transceiver which communicates (sends and receives signals with) a wireless barcode scanner.

3. Batch: In a batch application, and portable handheld device (with an integrated or tether cord barcode scanner attachment) is custom-programmed to accept and store data. The portable handheld device must be connected via a cable or placed in a communication cradle which is connected to a computer so that the scanned and/or manually entered data can be transferred (downloaded) from the portable device to the computer, and then the data processed by a software application.

4. Radio Frequency: These applications use custom-programmed portable handheld devices (with integrated or tethered connected barcode scanners) to communicate


scanned and/or entered data in real-time with a software application via antennae placed strategically in a warehouse or distribution center.

COUNTING BY PALLET In the business application examples above, scanning each carton may not be practical in high-volume environments where cartons of product are palletized and moved by the pallet load. There are several options available for quickly acquiring data at the pallet level either using just the carton barcode or by introducing a pallet barcode label in addition to the carton barcode labels. Note that this relies on their being standard pallet quantities defined per Interleaved 2 of 5 packaging level. Just like the need for standard, pre-defined carton quantities for an item, there must be standard pallet quantities defined for each carton quantity of an item. It is logical to think that the physical size of a carton of 6 of an item is smaller than a carton of 12 of an item, and that carton of 12 is smaller than the carton of 18. However, it is not necessarily correct to assume that a full pallet will be the exact same amount of an item regardless of whether a lot of small cartons of 6 are stacked on a pallet versus fewer cartons of 18 on a pallet. This depends on the carton sizes relative to the quantity inside and the carton configuration (i.e. square versus rectangle). Note in the Item-Carton Qty File schematic there is a data field called Pallet Quantity. This is the correct place to record the full-pallet count for an item packaged in different quantities.

METHOD 1 The ability to count a pallet of cartons versus a single carton need be nothing more sophisticated than performing this through the software application, whether on a computer terminal or a handheld device. Regardless of the scanning method, the user just needs to tell the application program whether a single carton is being scanned or a pallet of cartons is being scanned. In both cases, the user scans just a single carton barcode label. However, in the case of the pallet-scan option, the program will use the scan of the carton Interleaved 2 of 5 barcode to record the pallet quantity from the Item-Carton Qty File, not the carton quantity data field. This method does rely on the user telling the application software that a pallet or a carton will be scanned, and as such an occasional error may occur. Good business procedures and software controls will help prevent the user from making these mistakes. For example, perhaps two portable data terminals with attached scanners are used – one with a yellow housing and one with a black housing – and the yellow scanner is used only to scan pallets (which occur most of the time) and the black scanner used to scan cartons. In this case, the business procedure was backed up by visual controls, those being the different colored portable handheld devices which are each programmed accordingly.


METHOD 2 Another method involves creating some kind of pallet barcode label where the user is prompted to scan something from the pallet barcode label and then the Interleaved 2 of 5 barcode from a single carton. By introducing a second scan (the pallet barcode label) the user knows he will do two scans to record a pallet and just one scan (the carton label only) for a carton. The pallet barcode label can be a serialized pallet number that increments for each pallet label printed; it need not be more complicated than that.

METHOD 3 A modification on this would be to produce a pallet barcode label with the Interleaved 2 of 5 carton barcode, but prefix the pallet barcode. For example, if the carton’s Interleaved 2 of 5 barcode is “10095494241418”, the pallet barcode could be “P10095494241418”. Note that the pallet barcode would not be a valid Interleaved 2 of 5 – it would have to be encoded using barcode types (“symbologies”) Code 39 or Code 128. However, this is an advantage, as portable handheld devices can be programmed to accept or reject a barcode symbology at the data field level, as well as sometimes being able to interpret the barcode symbology during the scan. So, interpreting the symbology of the barcode (Interleaved 2 of 5 versus Code 39 or Code 128) can be used programmatically to determine whether a carton or pallet barcode was scanned. Alternatively, since the pallet barcode has an additional character, its length is one character greater than the carton barcode. So, interpreting the number of characters scanned is another way of distinguishing between a carton and pallet barcode. Perhaps even more obvious, just interpret the leading, left-most character. If the pallet barcode prefix code (here represented by the letter “P”) is detected, then a pallet barcode was scanned instead of a carton barcode.

METHOD 4 Sending less-than-full-pallets to a separate area for recording is another approach if floor space and traffic lanes allow. Full pallets follow one traffic pattern, and less-than-full pallets and individual cartons follow another traffic pattern. The scanners scanning full-pallets are dedicated to scanning only full pallets, and will thus always record or acquire the pallet quantity for a single scan of a carton label. The scanners scanning less-than-full pallets must, in fact, scan each carton, so these scanners would record or acquire the carton quantity for each carton scanned. Both custom programmed portable data terminals and scanners attached (either via tether or wireless) to computer terminals would work well in this situation, since the traffic lanes are each dedicated to a particular pallet type (full versus partial).

BUSINESS APPLICATION BENEFITS In general, the following benefits are easily achievable when using barcode scanning and carton and/or pallet barcode labeling versus more manual counting methods:

1. Faster throughput or movement of goods. 2. Great accuracy in counting.


3. Reduced costs due to reduction or elimination of redundant efforts due to manual mistakes.

In making each of the business applications noted in this document more efficient, there are “spill-over” benefits to other business application areas as discussed in the following sections.

WORK-IN-PROCESS TO FINISHED GOODS TRACKING Certainly, the most obvious benefit here is improving the true count (visibility) of available finished goods inventory as it is moved from the final manufacturing step. Many companies find true work-in-process (WIP) tracking to be unnecessary and cumbersome; an added burden (and thus expense) to their manufacturing costs. Sometimes the manufacturing process is short enough (few operations) or fast enough (quick operations) to not warrant WIP tracking. Thus, the only count of what was produced is when items are moved from manufacturing to finished goods inventory. Thus, the counting at this stage is critical and must be accurate, as it reflects not only what good are available to fill customer orders but also what the production levels were. Knowing accurately what you produced, you can determine the amount of raw materials consumed by tracking what was sent to the manufacturing process. Knowing, from your bill of materials, the amount of raw materials that should have been needed, it is possible to determine the efficiency or wastefulness of the manufacturing process. “Back-flushing” (consuming) raw material inventory at the final manufacturing step (the movement of items to finished goods) is valid in many manufacturing situations. Assuming your bill of materials comparison to actual raw materials consumption is accurate, than accurately counting WIP to finished goods can help alert buyers to potential raw material shortages due to stepped-up production. Reducing downtime due to lack of raw materials will help ensure customer orders are fulfilled complete and on-time.

PHYSICAL INVENTORY COUNTING The speed and accuracy of the physical inventory count is critical to returning business operations to their normal function. Business operations typically “frozen” during an inventory count are the entry of finished goods either from manufacturing or via inbound shipment from a supplier, and the picking and shipping of (customer or replenishment) orders. Recounts, where areas of inventory must be recounted due to high levels of variation from the existing computer on-hand quantity, further delay the physical inventory count process, add costs, and put stress on other operations, such as order fulfillment. Some companies may actually shut down for one or two weeks to simply count inventory at the end of the year. This once-per-year inventory count enables problems to either lie dormant or


fester (grow) during the course of the year. Even counting every six months does not permit many problems to surface in time. With barcode labeling and scanning technology, a better methodology would be to improve data accuracy at the points where finished goods enter and exit the warehouse. Further, with improved speed and accuracy, instead of large-scale inventory counts, “cycle counts” can be introduced more often to targeted finished goods. In cycle counting, finished goods inventory is typically assigned a code of A, B, or C. (This would also work for raw materials inventory.) A cycle count is not a full inventory count. Rather, the inventory is counted based on its assigned code value, and a schedule for counting is developed based on inventory code. “A” inventory moves the fastest; “B” inventory moves a little slower; “C” inventory moves the slowest. Shrinkage/theft concerns may also warrant high-value inventory to be coded as “A”, with next-lower inventory coded as “B”, and the lowest value inventory coded as “C”. The reasoning is that “A” inventory is likely to have more count accuracy issues than “B” inventory, and “B” inventory is likely to have more count accuracy issues than “C” inventory, either due to the volume of handling/movement and/or the potential for shrinkage. For example, “A” inventory may be counted every 3 months; “B” inventory is counted every 4 months; “C” inventory is counted every 6 months. This “divide-and-conquer” strategy results in less downtime and a greater chance of identifying and resolving inventory problems quickly.

ORDER PICKING TO SHIP Manufacturers must pick finished goods inventory to ship to their distributor and/or retailer customers; distributors must pick from their inventory to ship to their retailer customers; retailers must pick from their inventory to replenish their stores which can be thought of as their own internal customers. In each situation, the ability to pick items from inventory accurately and quickly is critical to fulfilling the customer’s needs, and this is regardless of whether cartons or pallets are being shipped. Scanning the carton (and pallet, if applicable) barcode labels helps to ensure accuracy and bring about throughput efficiencies. Two common picking methodologies are pick-to-order and wave picking. In a pick-to-order situation, a picker (warehouse or distribution center employee) is given a pick sheet for (generally) a single order and instructed to pick the entire order. This requires the picker to walk the entire warehouse, so generally the items listed on the pick sheet direct the picker through the warehouse as efficiently as possible, generally from back to front. Thus, the picker returns to the front of the warehouse with all the picked items that are then prepared (packed) for shipping.


In wave picking, a picker is given a list of items to pick for several orders. Several pickers may be assigned for wave picking in particularly large distribution centers due to their size. Each picker may thus only walk a few select aisles during their shift. The picker(s) will bring all items to a separation area where the items are separated into their individual orders and shipped. Regardless of picking methodology, it is preferable to stop any picking errors while the picker is in the aisles, not after the items have been picked and taken to a shipping or staging area as that would require (wasted) time to return the mistakenly picked items back to their rightful places. Worse, if the picking process causes items to be allocated to orders, the incorrectly picked items would not be available for order picking until physically returned to their rightful places and the computer system updated. If using portable handheld devices with barcode scanners in batch mode, the picker should have the capability of uploading an electronic copy of the pick sheet into the portable device. The picker would still be directed to the location of the items to pick, and would scan the items (either individually, by carton, or by pallet) to pick. The program on the handheld would validate that a correct item was picked, and that the picker did not over-pick the item. When the picker was finished, before moving the picked goods for packing, separation, or shipping, the portable device could inform the picker of any missed or short-picked items. (This is accomplished by comparing the picked item data & quantities to the uploaded electronic pick information.) Note that in batch mode, until the picker finishes and uploads the picked data to the business software application, the picked inventory items will not show as allocated in the computer system, they will appear as still available to be picked. This electronic verification is also accomplished via radio frequency – the primary difference being that the storing and processing of information is either partially or fully shifted from the portable handheld device to the business software application, and that once an inventory item is picked (either by scanning the item’s individual barcode, the carton barcode, or the pallet barcode), the computer system is updated in real-time and the inventory is no longer available to pick because it’s been allocated to an order.

RECEIVING Boat builders, distributors, and retailers will be the primary benefits of receiving by scanning the Interleaved 2 of 5 barcode carton label. It is time-consuming and inefficient to be forced to open a carton to receive items individually, either manually or via barcode scanning. This opens the door for shrinkage/theft and item damage, aside from increasing the chance of an inaccurate count.


Incorrect receiving counts not only affect inventory levels and reordering frequency, but also impact the accounting area in regards to supplier invoices. Ideally, the supplier will invoice accurately for the items and quantities shipped, not just ordered. Assuming the supplier is invoicing accurately, inaccurate receiving will cause a mismatch between the supplier invoice and the physical receipt of goods. Payments for incorrect amounts will be processed, or the entire supplier payment held until the problem is resolved, wasting the time of the accounting staff from the supplier and the customer to resolve the discrepancy. Further, it is likely impossible to reconcile the difference between the shipment and physical receipt after the fact. Receiving errors include: § Goods shipped but not counted as received. § Goods over-counted or duplicate counted when received. § Goods not shipped but counted as received. § Goods not ordered are received.

Ideally, the receiving process would not be validated against the purchase order, but preferably against an advance ship notice (ASN) – effectively, and electronic bill of lading. The ASN arrives prior to the physical shipment and can be instantly compared to the purchase order. Thus, the customer is made aware of any discrepancies (i.e. backorders) prior to the physical receipt. The receiving is validated against the ASN because the ASN represents the shipment, the purchase order does not. (For more information about receiving electronic advance ship notices, and sending/receiving other business documents such as purchase orders and invoices, please review the capabilities of the NMMA’s Marine Data Exchange (MDX) at www.nmma.org/mdx.) Just like the picking process, receiving errors should be caught on the dock, not after the goods are in inventory locations. And just like the picking process, portable handheld devices pre-loaded with a purchase order can be used to validate against the scan of received goods in batch mode. This can also be accomplished via a real-time connection between a handheld device and the business software application, where scanned and manually entered data (when necessary) are validated against the purchase order in real-time. § A more orderly receiving process should help eliminate shipped goods from not being

received. § A more orderly receiving process should help eliminate goods from being over-counted

or duplicate counted. Once a carton or pallet is scanned, it should be moved to a alternate area immediately or otherwise placed out of the way to avoid duplicate scan.

§ With barcode scanning, goods that are not shipped are simply not counted because there

is no barcode to scan. This is additionally leveraged by receiving against an advance ship notice and not the purchase order; goods not shipped should not be on the ASN.


§ Goods that are shipped without having been ordered should cause the handheld devices (scanners) to beep in error. These goods are then set aside for return to the supplier, and the supplier notified of goods to pick up. They should not be taken into inventory with the hopes of reconciling the purchase order and accounts payable to the supplier invoice.

If the supplier does not provide a pallet barcode label, the customer may opt to print a pallet barcode label to apply to assist in the receiving process. As noted in a prior section, there are several methods of counting cartons by pallet, and it cannot be assumed that the customer and supplier with each choose the same method. It is a minor cost to the customer to create and apply a pallet label when compared to scanning a pallet full of cartons. This at least requires the supplier to mark the pallet as being “full” in some way if not done with a pallet barcode label.

IN SUMMARY The processes and costs involved to implement bar coding are relatively minimal when compared to many technology projects. The cost-savings and efficiency benefits equate to a short-term return on investment. As such, even small companies can enjoy the benefits of barcode labeling and scanning. Collaboration across the marine industry supply chain will reduce costs for all companies involved and help deliver goods to consumers more efficiently than before. The NMMA is committed to helping marine industry companies achieve good supply chain performance and is thus committed to actively helping the marine industry develop standards and good practices to keep the marine industry strong and vital.

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