Stone Age Data Collection System 5 — Justification

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data collection justification (1)You have done a bunch of homework, and you realize that you really, really, really need an efficient method of getting data into your information systems.  The important questions of how, what, why, where, and when have been answered.  The preliminary design and plan have been proposed.  It is finally time for a data collection system to be put into place.

The quote is placed in front of you, and you see a dollar sign followed by a never-ending string of digits and commas (OK, I admit this is for dramatic effect…).  Your next thoughts are, “I had no idea it would cost this much…” and, “How do we pay for this?”  So, let’s take a step back; we already have the information.

One of my colleagues has an article that goes into ROI, or Return on Investment, a little more in depth.  Once you plug in the numbers, you can see the payback and savings.

  • Labor – TIME IS MONEY.  How much time are your employees wasting looking for product?  How much labor is involved in processing paperwork?  How much time is spent pulling orders, shipping orders, returning orders, restocking orders, etc.?
  • Product – Where is it?  How old is it?  Do I need to order more?  Do I need to make more?
  • Customers –  Do they know they’ve received their products?  Do we know they’ve received their products?  Can we tell them when it will arrive or that it has arrived?  Did they get the right stuff?  What are my customers requiring?  What do they need from us?
  • Competition – What are my competitors doing?  Are my customers getting better service from my competition?

There are hard costs, such as labor and product that go into a return on investment justification.  You can easily find out how may hours are wasted or spent on duplication of services (data entry clerks vs. point of use data collection).  You can also find out during cycle counts or inventory just how much product is sitting around too long.

The soft costs are subjective.  How do you calculate the cost of customer good will?  It may not be apparent at first, but if your best customers haven’t been ordering too often and only order from you as the last resort, there may be trouble in paradise.  Your competition is wooing them with better service.  Your competition can deliver the right product on-time and with great tracking.  Can you?

L-Tron’s experienced sales and technical staff has the wherewithal to assist you in finding a cost-effective solution that will help you stay one step ahead of your competition.  We have been around the block more than a few times, so we know how to get you into the game.  Please contact us for additional information.

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