Bar Code System Brings Efficiency To Toyota Warehouse

The Toyota Technical Center (Ann Arbor, MI) needed a way to improve productivity and eliminate inventory errors in receiving and tracking prototype parts. The center is a small warehouse by the automotive manufacturer's standards. However, the warehouse needed a better system to track parts, which are stored for use by company engineers, to test theories and materials for future automobiles.

Business Computer Connections (BCC) (Livonia, MI), an automotive manufacturing, automatic identification and data collection (AIDC) systems integrator, discovered Toyota's need for a solution through Monarch Marking Systems. BCC designed a solution featuring Monarch's Pathfinder Ultra, an integrated handheld unit that scans and collects data, then prints and applies labels.

The Inadequate System
Handwritten labels were used to keep track of the boxes, but they were hard to read and often contained errors. Employees were wasting time walking back and forth across the warehouse to locate and deliver specific parts. And, there was no way for engineers to trace the parts they requested.

Items are only kept in the warehouse for 90 days, to ensure that obsolete parts are not wasting space sitting on shelves. With an inadequate tracking solution engineers couldn't find the inventory they needed. In response to the inadequate tracking system, engineers often ordered multiple copies of the same part. This way, they had a better chance of at least one part finding its way to the engineer.

Bring On the Bar Codes
"This was an excellent installation," said Jon Newman, BCC's executive vice president. "We found out about Toyota's need for a solution about two years ago through Monarch. The Toyota Technical Center had just hired a new purchasing person, John Nemeth, who previously worked for a bar code hardware company. He appreciated the benefits that a good bar code system could bring to the table, specifically through cost justification. Nemeth also knew that a bar code system was exactly what the Toyota Technical Center needed to implement in order to increase its efficiency."

According to Newman, Toyota doesn't make purchases unless a hard-dollar cost justification can be proved. In this case, the automotive manufacturer wanted to see a return on investment (ROI) within 12 months of the installation's completion. "Nemeth had already put together a target ROI in order to justify the installation," said Newman. "A conventional system would not have met Toyota's financial requirements. We had to design a solution in a short amount of time that showed an ROI within a year." The system that BCC created uses the Monarch Pathfinder Ultra to collect product information either by scanning or by keying manually using the keypad. The handheld unit also prints inventory tags, which are affixed to boxes by tapping the nose of the terminal on the box.

BCC designed the software for the handheld unit and used it in conjunction with the facility's existing computer system. No additional stationary equipment was added. Now, the purchase order (PO) file from Toyota comes across the company's network each morning, and data is downloaded into the Pathfinder Ultra's batch unit. When boxes arrive at the receiving dock, warehouse employees use the Pathfinder Ultra to scan the PO number on the label. The PO data appears on the handheld's screen. Appropriate information, such as when the box was received or where it should be stored, is keyed into the scanner, and a receiving/putaway tag is generated. A label is affixed to the box with the destruction date and information on the contents of the box. Finally, the box's location label is scanned and downloaded into the system, and the item is delivered or put in storage.

Seeing A Return On Investment
The new system saved money and time, improved accuracy and portability, and provided package traceability, according to Newman. Warehouse employees can now validate that the right parts have been received. They can also mark the boxes with the correct printed label that matches the validated scan, providing traceability. Engineers no longer need to send multiple orders of the same parts. Their original orders are delivered.

With the help of the Toyota application as a starting point, Monarch and BCC have developed the Ultra Warehouse software system. "We've worked closely with Monarch to make this solution an excellent turnkey inventory system for all small warehouse operations," said Newman. "It's a closed-loop system, meaning the solution can track the inventory process from beginning to end. The solution is also very inexpensive. In most cases, it pays for itself in a matter of months." A Toyota facility in Arizona, similar in size to the Technical Center in Ann Arbor, is planning to implement the system later this year.