Increase Profits With Wireless Data Collection

In 2003, business was booming at Oregon Cherry Growers (Salem, OR). With its three modern warehouse/processing facilities, the cooperative was the world's largest producer of cherries. Although the cooperative - which is owned by a group of cherry growers - was pleased with the quality and volume of products it was selling, it was dissatisfied with its warehouse management system. In fact, executives were convinced that the patchwork inventory system the cooperative had developed over the past 25 years was preventing growers from maximizing revenues. Under the manual system, Oregon Cherry Growers had created a complicated paper trail to track inventory. For instance, warehouse workers recorded the times that trucks made deliveries and even wrote descriptive information about drivers to help track shipments.

"We created a lot of extra processes that we thought we needed but really didn't," says David Prouse, CIO of Oregon Cherry Growers. "We needed someone to come in and help us decide what was necessary for good inventory tracking and cut away all of the extras that had been added over the years."

The manual tracking system was inefficient and failed to provide the level of accuracy needed to create timely financial reports. The cooperative was generating financial reports only once a year. As a result, growers were unable to adjust the prices of their products in response to market decisions. "The lack of timely financial reporting was crippling the decision-making process," says Prouse.

While researching inventory management systems on the Internet, Oregon Cherry Growers found white papers detailing bar code scanning systems that AccuCode, Inc. (Denver) had installed. The cooperative decided to contact the systems integrator and VAR, and it turned out to be a good move. The cooperative's experience with the VAR shows how a company can benefit by finding a reseller partner that is able to provide consulting services along with experience in hardware and software solutions. "With their expertise installing these systems at other places and knowledge of warehouse processes, they came through and helped us define what we really needed," says Prouse.

Scanning System Eliminates Unnecessary Warehouse Procedures
To customize an automated inventory system for Oregon Cherry Growers, AccuCode first evaluated the cooperative's existing warehouse processes. AccuCode representatives talked with warehouse personnel, including employees with more than 20 years of experience. "AccuCode detailed every step in the process," says Prouse. That analysis uncovered inefficiencies such as the procedure Oregon Cherry Growers used to track bulk deliveries. At the warehouses, bulk deliveries of cherries are divided into maraschino, fresh, brined, and other categories. Even though the batches were divided into separate wooden bins, the cooperative tracked the deliveries as one inventory item. AccuCode determined it would be easier to create a new inventory item for each bin of cherries.

The cooperative wanted to adopt an automated warehouse system to update inventory levels via bar code scanners. This system would also need to transfer data to Oregon Cherry Growers' Solomon Software ERP (enterprise resource planning) program so that monthly financial reports could be generated. With the help of AccuCode's programmer, who visited the company's Salem warehouse for four days, the cooperative eliminated all procedures that were not strictly related to the cooperative's goal of tracking products and updating inventory levels. "Some of the things we originally thought we needed to do, like tracking trucks and putting times on deliveries, we found were unnecessary," he says.

Before adding a particular function to the bar code program, the programmer made sure to double-check with executives whether they wanted that process to be included. "He was helpful, because we would tell him what we wanted, and then he would come back to the subject 20 minutes later and play the devil's advocate to see if we really wanted it," Prouse says.

In the WLAN (wireless LAN) system, access points pick up signals from Everett, WA-based Intermec Technology's 700 Color mobile computers. When putting a barrel into cold storage, workers scan a bar code label affixed to the barrel as well as a bar code on the warehouse row to update inventory levels. The bar codes are scanned again when the product is pulled from cold storage to be processed on the production line. "The warehouses have been reorganized, and it's much easier to find products," Prouse says.

Prouse says warehouse employees have adjusted well to the new procedures. "The system is simple to use, and that was one of our main objectives," he says. "We have people who are unfamiliar with computers, so we knew the system had to be simple or it wouldn't be used. Only minimal training was required."

Inventory Accuracy Helps Growers Maximize Profits
The ability to produce monthly financial reports is one of the biggest benefits of the inventory system. Now that growers can review revenue data, they can make better decisions about how much to charge customers. "Before, they just didn't have that information to make those kinds of decisions," says Prouse. "Now the system is allowing them to analyze how much they're selling and whether they're profitable."

The cooperative can more efficiently schedule shipments now that it has more accurate inventory data, and several employees have been reassigned from the warehouse floor to the production and scheduling departments. And with improved inventory data at its disposal, the cooperative is better able to determine how many employees to schedule on production shifts.

In June 2005, the cooperative plans to extend the inventory tracking system into the cherry groves by having AccuCode implement a WWAN (wireless wide area network). This would enable growers to place labels on bins and scan the bar codes in the field. "The current system would work out in the field. It's just a matter of extending the network out there," says Prouse. "This will definitely make us more efficient on the production side."