January 16, 2017 How Labeling Can Help Manufacturing Companies Compete

Labeling today is complex; today’s manufacturers are faced with a range of evolving requirements that complicate the process

By: Bob Brown, Manufacturing Industry Specialist

How Can Labeling Help Us Manage our Complex Supply Chain More Efficiently?

The manufacturing industry has an intricate supply chain that’s only growing more complex with a broad range of players, including raw material suppliers, warehouse and transportation managers, distributors, retailers, and end consumers. Each step requires accurate barcode labeling for faster, more efficient processing as well as precise track and trace of the product along the way. That’s the goal, anyway.

At the same time, companies are dealing with customer-specific requirements which are increasing at a rapid rate. More and more customers demand that graphics, translated text, branding, even color be added to their labels. As a result, manufacturers struggle with a staggering amount of label templates, all of which must be created and maintained separately. This involves a lot of time and effort that flies in the face of trying to simplify processes and gain efficiencies in a complex global supply chain.

Which brings us to the inherent business benefits of a standardized Enterprise Labeling Solution. By taking a holistic, integrated approach to labeling, companies can respond quickly to new and evolving requirements, while maintaining labeling consistency across the supply chain. Dynamic, data-driven capabilities allow manufacturing companies to easily manage labeling—with fewer templates—and achieve dramatic reductions in overall maintenance and the costs associated with it.

How Can Labeling Help Manufacturing Companies Deal with Constant Change?

The impact of change is significant to a manufacturing business. When it comes to labeling, constant change—be it customer-specific label changes or branding requirements for distributors in a new territory, for example—can mean a manual, slow, labor-intensive process. If you rely on multiple, non-standardized labeling products, this often leads to an array of disjointed, often redundant templates created in silos which slows production and delays shipments. And because changes are not always captured earlier upstream in the process, there will be risk of errors and inconsistencies.

With a standardized, centralized labeling solution, manufacturing companies can make changes at the data source —whether it’s in the ERP, MES, or other system—and ensure that they will be reflected on the appropriate labels. Change it once, apply it many times. And when you can provide access to the same labeling solution to multiple users at different locations, you have full visibility and control across the value chain.

What was once a costly, yet generally accepted practice of using a mix of disconnected labeling software products is replaced with a unified, streamlined approach that manages change quickly, and ultimately, helps get product in the hands of distributors and customers faster.

How Can Labeling Help With Cost Reductions?

Let’s apply a basic business principle here: If you can move product faster and more efficiently, you will save time and money—not to mention increase productivity, improve customer satisfaction, and so on. But many manufacturing companies aren’t paying attention to areas within the supply chain where delays and mistakes happen at an alarming rate. Labeling is often an afterthought, but what if a customer wants a recently rebranded logo on its shipping label? Or what if a supplier delivers raw materials with the wrong label? To solve these specific issues, you may lose several hours or, more likely, several days.

In a recent survey we conducted with about 200 manufacturing professionals, nearly half—47%—indicated they were experiencing costly downtime due to labeling disruptions. The reasons cited for these delays included dealing with customer-specific labels, product-specific labels, and slow label printing speeds, in that order. When you add up all of these isolated labeling issues occurring across different segments of your supply chain, you’re looking at hundreds of thousands of dollars of lost productivity, severely impacting your bottom line.

As mentioned, an enterprise-wide labeling solution, tightly integrated with existing systems, unifies your entire labeling process. By gaining centralized visibility and control, you can better adapt to ever-changing label requirements. Errors are reduced because you’re pulling data from sources of truth, be it SAP, Oracle, your WMS system, etc. Any customer-specific label changes that come in are handled systematically with secure access to a library of templates that can be updated as needed—while greatly reducing the number of templates you need to manage.

And from a performance perspective, if you use a labeling solution that supports native print drivers, you greatly reduce the drain on the network while improving the speed of label printing. When you’re talking about a high-output environment supporting thousands of labels a day, this too adds up to tremendous gains in productivity and cost savings.

In fact, with many of our manufacturing customers, they’re seeing a payback with Enterprise Labeling in 12 months or less—and that’s not taking into account some of the harder to measure benefits such as reduced downtime and better labeling accuracy.

How Can Labeling Help Companies Comply with Regulatory Requirements?

Depending on the specific industry, you may have a number of US and international regulations to abide by. Food & beverage, medical device manufacturing, and even electronics have strict labeling requirements dictating product-specific labels, barcode standards for shipping containers, shipping and receiving transactional labels, 2D machine readable symbols, and more. Failure to comply with any of these standards can result in fines, returned product, or worse.

Fortunately as we’ve discussed, enterprise labeling provides the centralized platform to monitor and control what goes on your labels without having to replicate critical data. Tight integration with your ERP systems or other databases that manage regulatory information assures that the right data is being pulled for the right label. And as regulations change or evolve—as they often do—you can have confidence that your labels will draw from those same “records of truth” and accurately reflect the latest updates for continued compliance.

How Can Labeling Create Efficiencies at the Supplier Level?

Just as you can leverage an enterprise-wide solution to create, share and update labels across your organization, why not do the same thing with your trading partners? If you’re like most manufacturers, you rely on suppliers to deliver raw materials or components in a timely manner, but you experience costly hold ups in receiving as containers often need to be re-labeled before moving on to the production line. You could send suppliers your own pre-printed labels, but that has its own drawbacks as you’re beholden to their process of storing and applying labels.

But now through secure, web-based access to your Enterprise Labeling Solution—and templates you create—the supplier can simply run off your labels to their local printers. Again drawing from your data sources, the labels are already pre-populated with the information you need, so there are no delays when supplier materials arrive. They are scanned and put into production right away. Believe it or not, this is a concept that few manufacturers ever realized was possible.

Case in point: we recently visited the plant of a global maker of consumer products and noticed they had pallets and pallets of supplier parts in their receiving area. This was additional inventory that was waiting to be relabeled before it could move to the production line. They told us they stored two weeks’ worth of safety stock to account for the relabeling process, which took about 80 man hours every month. They have 20 plants following a similar process. Quickly do the math and you’re looking at about $600K annually wasted on relabeling. That’s not even considering inventory management costs.

The right labeling solution lets you share label templates with suppliers and other trading partners so incoming materials and components are labeled and formatted the way you want them. We’ve seen some companies save upwards of millions of dollars in labor, materials and inventory costs when switching over to an enterprise labeling solution.

How Can Labeling Help Companies Grow and Expand Their Business?

With competition as fierce as ever, manufacturers are always looking to improve efficiency, including moving operations to cheaper countries. Mexico and India are common destinations for outsourcing. With this expansion to new markets, there’s a need for speed as automation technologies quicken production and time to market, but is your labeling able to keep pace, especially when there are requirements for multiple languages and complex barcode data?

For example, certain health and safety information must be in the language of the country where the product is made and, if it’s being shipped to another country, then the same information on the label must also be in that region’s local language.

When a specific regulation changes in a country that you’re shipping a product to, can you make the necessary text changes to labels quickly without stopping the manufacturing line? We discussed the value of pulling data from sources of truth like SAP or Oracle, but a change like this may require programming which can take 4 to 6 weeks to complete.

To overcome this challenge, look for enterprise labeling with built-in business logic that can be dynamically updated as needed without having to wait for changes or updates to your enterprise application. Business rules can be configured and customized within a standard user interface to update label specifications quickly and dynamically—be it language, branding, regional compliance—where they’re needed.

Let’s take that same example of the health and safety information on the label. Suppose you bring on a new distributor in Germany who needs product right away to meet a huge customer opportunity. With configurable business logic as part of the labeling solution, select users can quickly pull up the template and translate the text to German without any delays. Product gets out the door within days versus weeks or months.

Bob Brown is Manufacturing Industry Specialist with Loftware and has been working with Loftware enterprise customers in the manufacturing industry for over 20 years. His customers include some of the largest manufacturers in the world: Parker Hannifin, Lennox, ABB, Sonoco, Southwire National Gypsum, and more. Highly knowledgeable about the key issues most manufacturers are facing today, he provides in-depth studies and recommendations to manufacturers addressing their specific labeling requirements. Email: bbrown@loftware.com.

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