Cut Indirect Costs via Barcode Scanning Software, reyda App.

Can a Track and Trace App Cut an Enterprise’s Indirect Costs?

Code Corporation was recently asked how data capture could help address indirect costs. It’s a fair question. After all, barcode scanning technology is propelling the digitalization that economizes operations and costs. For instance, product data stored in barcodes supports the creation of digital twins for use in manufacturing and logistics, as well as optimizing field services. Another use case: barcode scanning software has streamlined documentation time for nurses.

So I checked in with our software partner, MGBM-Development. As aerospace’s traceability leaders, MGBM would understand how their asset management app could lower overhead. But before delving into any solution offerings, let’s clarify a few terms. I’ll also share how a quick trip to a home improvement store made me view business-related expenses differently.

A chart comparing direct and indirect costs
A simple overview of the differences between direct and indirect costs.

In the Simplest Terms, what are Direct Costs?

These expenses are related to a "cost object." They include payments for producing an item or offering a service. Prime examples include raw materials and software.

In Plain English, what is an Indirect Cost?

It’s a business-related expenditure not directly tied to a project or product. Rent and utilities are obvious examples, but indirect costs are trickier to track and trace in day-to-day operations.

These terms are perfectly illustrated through rushed decision-making and the sense of frugality that I experienced shopping for shelves one weekend.

I visited the local "Do-It-Yourself" store for home office shelving. En route, I calculated what hardware and tooling I’d have to purchase for shelf installation. Once parked, I had a good handle on what was needed—or so I thought.

Upon quickly locating the right shelving, I was taken aback upon seeing that it needed a different type of wall anchoring than expected. Because it all seemed straightforward, I couldn’t help but think, "While I am pretty certain that I have suitable sizes of plugs, screws, and drill bits in my workshop, I’m not 100% sure."

Second-guessing myself, I purchased additional hardware to avoid another time- and fuel-wasting trip. Once home, with extra hardware in hand, I found that I was better stocked than I’d thought—the proper screws, plugs, and drill bits were present. From a budgetary perspective, this wasn’t ideal because my workshop’s stock was now bloated and cut into ever-shrinking storage. How many of you can relate?

A Lesson from My Shop Floor to Your Top Floor

My DIY misadventure reflects the common struggle companies face with indirect operating costs. While sharing my experience with colleagues responsible for office furniture and equipment in a large company, I realized my situation was a snapshot of their daily challenges. It’s understandably daunting not to have immediate access to information about company assets, where items are stored, their availability, and their usability. This lack of data causes headaches during day-to-day operations and annual tax audits.

Indirect costs? There’s an App for that!

One to never turn down a challenge, MGBM created reyda. A comprehensive asset-tracking app, reyda funnels real-time data (like item location and service status) into business-friendly dashboards. A use case I helped with, this high-tech—yet elegant—solution uses barcodes and Code Corporation’s CortexDecoder barcode scanning software.

screen shot of reyda traceability app used for aerospace manufacturing
The reyda app tracks and traces assets, preventing businesses from overbuying and inflating indirect costs.

How does the reyda platform help asset management specialists trim indirect costs?

Imagine that office furniture and equipment are cataloged, labeled, and serialized (with barcodes) upon purchase. Next, a digital twin is created in reyda, and every time that asset is moved or serviced, reyda updates data via barcode scan. Most agree that this effort upfront will pay off by displaying what’s already owned, where it’s stored, who has used it, and other critical info like age. Most importantly, it’ll answer the question: Do we need to purchase more equipment? Trust me: reyda would be handy for my next DIY store run.

Despite the simplicity and logical nature of the above-mentioned process, it’s surprising how many businesses aren’t using it. Not embedding asset tracking as a formal process results in small and midsize enterprises buying unnecessary equipment and incurring indirect expenses.

Wasted capital via indirect costs drove MGBM to ensure the reyda platform was comprehensive yet user-friendly. As such, any employee can quickly generate labels for new assets. Simultaneously, labels can also be generated for specific storage areas. These location labels then allow assets to be associated with particular locations, and it’s all be done on a laptop, desktop, or smart device. reyda-equipped smart devices enable mobile employees to mark the location of an asset or obtain usage data via barcode scan. Similarly, scanning a specific location label provides a list of assets stored in that location.

With a simple barcode scan, reyda cuts indirect costs, allowing those funds to go elsewhere, like R&D or employees’ pockets. Get ready for that feared annual tax audit while I find my store receipt, grab the redundant hardware, and return to wait in a customer service queue…

Thomas Rissmann,
EMEA Senior Sales Manager, Software - Code Corporation

P.S., Shelving indirect costs is as simple as contacting MGBM and requesting a free demo account.

Author Bio: Munich-based Thomas Rissmann is one of data capture’s best-connect barcode scanner experts. Rissmann is passionate about helping businesses become more competitive through digitalization while improving customer experiences.

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