Orthopedic Supplies Manufacturer Improves Inventory Control with Bar Codes
Challenge
The company needed to establish a labeling program, and many of DePuy’s distributors and hospitals were implementing automated receiving systems, which required inventory to be bar coded when it reached their receiving docks.
Solution
The system, consisting of 20 on-demand label printers from Zebra Technologies, allowed DePuy to minimize manual data entry, reduce shipping errors, and eliminate the need for costly preprinted forms.
Product
DePuy installed several Zebra® high-performance thermal transfer bar code printers.
On-demand labeling delivers great savings in forms costs by eliminating the need for preprinted forms. Many organizations apply bar coding to improve internal operations, while others adopt the technology to comply with customer or regulatory labeling requirements.
That’s how bar codes came to DePuy Orthepaedics, Inc., an international manufacturer known for its orthopedic products. Implementing bar coding turned out to be a blessing in disguise for DePuy–-they are expecting a $100,000 savings in forms costs alone when all facilities have been converted to the new technology. During the 1980s, DePuy embarked on a plan to widen its distribution channels. Management realized that for the expansion to meet corporate objectives, the company needed to establish a bar code labeling program.
Many of DePuy’s distributors and hospitals were implementing automated receiving systems, which required inventory to be bar coded when it reached their receiving docks. So the company installed a dot matrix label printer to comply with customer requests. After completing implementation of the compliance labeling program, management turned its attention within and looked for ways to use the technology internally. “Prior to bar coding, we entered inventory and shipping information manually into the computer, which always risked the chance for error. Some of our own distributors began using bar codes in their offices and we realized it might solve some problems for us, too,” says Mirna Dault, senior programmer/analyst at DePuy’s headquarters in Warsaw, Indiana. What DePuy ultimately opted for were high speed, high volume thermal transfer printers.
The system, consisting of twenty on-demand label printers from Zebra Technologies, allowed DePuy to minimize manual data entry, reduce shipping errors and eliminate the need for costly preprinted forms. DePuy’s Warsaw operation currently ships about 200,000 orders annually, totaling approximately one million items. With the dot matrix system in operation, 60 percent of all items were bar coded. Others were labeled with unscannable symbols.
To use bar codes internally, the company needed a labeling system that could increase the percentage of bar coded product. “When we first started bar coding, we were using form-fed dot matrix printers. But their duty cycles were too light; when the printers went down, they were down for a long time,” explains Joe Mase, packaging engineer at the facility. “And the previous systems were unable to print logos on the labels. We were spending a lot of money on preprinted forms. A cost savings of over $100,000 has been recognized by switching from two-color preprinted product labels to a blank print-on-demand label.”
To improve the percentage of products labeled with readable bar codes, DePuy installed several Zebra® thermal transfer bar code printers. Now 93 percent of the factory’s yield ship with bar coded labels in place. Twenty demand-labeling systems generate product and shipping labels for five manufacturing sites in Indiana, Michigan, New Mexico, and California, along with five printers in their Leeds, England facility.
The new labeling systems quickly helped the company cut inventory inaccuracies, slash data entry errors, and improve customer service. The company specified on-demand, thermal transfer printers for their duty cycle and sturdiness. “DePuy was concerned about the dependability of a printer in a warehouse environment. We selected Zebra printers for their ruggedness, the ability to interface with our AS/400 system, and the user-friendliness,” says Dault. Although DePuy made a sizable investment in hardware and software, Dault said the system will pay for itself within a year. “We’ll recoup our costs quickly because this system reduced our forms expenditures by almost 50 percent. Instead of buying preprinted three-part forms, we’re buying blank die-cut label stock. It’s saving our Warsaw facility $25,000 in forms costs, and we expect to see an even bigger savings in the Michigan facility,” explains Dault. In addition, the plant is saving many thousands of dollars by reducing shipping errors, which had cost DePuy between $35 and $55 to correct per transaction.
