News
"Parcel Shipping Report: Computerized Shipping Systems — Small businesses shouldn't overlook the ability of technology to save time and money," By Mark Taylor
Shipping & Receiving Magazine
Computers, facsimile machines, laser printers, e-mail, and voice mail are modern marvels that can improve both customer and staff satisfaction. Yet many small business owners are not taking advantage of the benefits technology offers-especially in the shipping room. It is often the last frontier to be computerized.
Nearly four-fifths of American companies still employ manual or semi-manual practices in the shipping room - using old, inaccurate scales to weigh packages; figuring insurance and C.O.D. charges on a calculator; keying data into computer; and writing out bills of lading and labels by hand. Only one in twenty companies has the shipping room computer electronically connected to the accounting office. This often means that all pertinent data must be typed into two different systems.
There is much value in linking and automating the process. For example, in one client company, the shipping clerk had to enter 18 keystrokes to process a single package. The next day, an accounting clerk had to enter another 46 keystrokes to update inventory, invoice the customer, and close the order. In all, people made 64 keystrokes for each of 50 orders per day. This totaled 3,200 strokes a day, 70,400 a month, and 844,800 per year. Keep in mind that this work was often performed under pressure, with tight deadlines and frequent interruptions.
Now consider this: Dept. of Defense studies show that the average error rate in recording data through manual key entry is one error per 300 tries. Using this ratio, the key error rate for this company was 235 per month. Key errors translate into things like double shipments, inaccurate labels, and the use of carriers that are not always the most cost effective.
We're not done yet. Research at Texas A & M University found the average shipping error costs $50 to correct. This company was routinely making mistakes that cost nearly $24,000 each month due to inaccurate shipments.
The solution for this company was a computerized shipping system connecting the business' shipping and accounting departments. Once in place the shipping clerk was able to perform many of the tasks previously assigned to the accounting clerk simply by scanning the work order barcode. The clerk was then able to place the parcel on the scale, press only one key, and print a barcoded label, matched to the carriers and customer's exact specifications. In addition, the freight charges, tracking number, weight, carrier used, and date shipped were all electronically entered, the order confirmed, the inventory updated, and the invoice printed. The system also automatically found the most direct and cost-effective routes as well as administered discount carrier and self-insurance programs.
Computerized shipping systems can be effectively implemented and used by virtually any company involved in manufacturing and/or distribution, shipping 50 or more parcels per day. In most cases, a system can begin paying for itself from day one.
Merle Distributing, a book distributor shipping 300 packages per day, implemented a system with a $500 per month lease agreement. The system computerized their entire shipping operation and linked it with the company's general business computer. Eliminating duplication of effort and unnecessary man-hours saved $25,000 a year in staff expenses alone. A 15% misdelivery rate was also eliminated. Today, Merle and its customers enjoy accuracy rates in the 97% range. That is the kind of bottom line technology we can all understand and appreciate.