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Bayer: Wireless System Keeps Vast Inventory on Track

Bayer, Inc. (formerly Miles Canada, Inc., and belonging to parent company Bayer AG of Germany), sells more than 25,000 different stock keeping units, or SKUs, to businesses ranging from local drug stores to the Big Three U.S. auto makers. Bayer stays competitive and handles an influx of new products thanks to a wireless system it installed in 1995.

Application: Real-Time Data Collection and Inventory Management
In the early 1990s, Bayer consolidated four of its companies into one. At the same time, its products multiplied and its customer bases (in health care, chemicals, and imaging technologies) ballooned. Some 55 Bayer employees in Canada (operating warehouses totaling 185,000 square feet with dozens of loading docks) had more product to inventory than the batch processing system could handle. High volume and the potential for human error were resulting in too many mistakes.

To design an ideal warehouse management system, Bayer organized a 10-person steering committee of warehouse managers and operators. Says Harold Mueller, Bayer's director of logistics, "First on our list was a real-time database transmission system to save money, reduce person hours, cut down on paperwork and improve employee efficiency. Our tremendous volume of diverse products required it. A batch system isn't updated in real time, and it makes taking accurate inventory difficult."

After analyzing the types of product stored and determining the number of base stations required to cover the employees in each warehouse, Bayer chose two systems: For three of the warehouses, it chose hand-held radio-frequency data terminals with laser scanners, keypads, and bar code readers; and for a fourth warehouse, where hazardous materials are stored, Bayer chose an impact-resistant radio-frequency terminal system. Both systems operate in an IBM AS/400 minicomputer environment, and both have a modular design that makes upgrades easy.

Benefits: Dramatic Improvements in Distribution, Tracking, and Quality Control
Using the wireless system, a warehouse operator can process an individual order in less than 30 seconds. Bayer now ships 24,000 orders per month with shipping and inventory accuracies of over 99 percent - and virtually no complaints. Most distribution is paperless: Through an EDI link (an on-line shipping, tracking, and payment system), Bayer advises its carriers of shipments and payments without waiting to receive and pay invoices. The system automatically routes and checks in products for destination, weight, and class. Warehouse operators can find out what's available at any instant, and instead of being a separate job, inventory counting is part of every operator's routine. What's more, now employees know that inventory is accurate.

Tracking has become vastly more efficient now that Bayer service staff can now get instant information on the status of a customer order. And as for quality control, products are quarantined as soon as employees report any damage. According to Mueller, the risk of sending out damaged products has been virtually eliminated.

With such high volume and so many products, the wireless system's real-time transmission capabilities have become an essential component of Bayer's business.

Installation Size
Bayer's installation (in the three warehouses where hazardous materials are not stored) consists of 46 hand-held terminals linked wirelessly to the AS/400 minicomputer, a printer, and scanners.

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