Maintaining Supply Chain Agility Through Labeling

By: Amin Sikander, Contributor

As of June 2022, the U.S. continues to experience supply chain difficulties. While the reasons we’ve heard include a lack of truck drivers, lack of raw materials and border closures, the reality is that incorrect labeling also creates supply chain challenges. A labeling error can bring an entire supply chain to a standstill, regardless of whether or not organizations are properly staffed and plenty of stock is available.

According to a company leader in packaging and labeling control, incorrect labeling is the top reason for food recalls. Undeclared allergens, incorrect ingredients or inaccurate shipping labels are a few examples of why recalls occur. But the food industry isn’t the only one where mislabeling can be costly. The Medical Device Recall Report conducted by the Food and Drug Administration (FDA) revealed that in just the first quarter of 2014, 53% of medical device manufacturing recalls were due to packaging errors, including labeling errors. And not so long ago, in 2019, a large car manufacturer had to delay a car release due to incorrect settings on its printers, which prompted labeling errors on vehicle components imported to the U.S. from China.

So how is it that something as seemingly insignificant as an incorrect label can have such a huge negative effect on the supply chain? The short answer is that applying a label is easy, but the entire labeling process is complicated. We often tell our clients that labels are the oil that keeps their organizational engine running.

Let’s examine the labeling process in detail. First, there are several different types of labels, each with its own specific purpose, including warehouse labels, product labels, asset labels and shipping labels. Labels can be either 1D/2D/3D barcodes or RFID/IoT tags. They also need to be designed for the environment they are meant to operate in, whether high heat, cold storage, manufacturing clean rooms and so on.

Warehouse labels can be broken into different groups, but they all serve the common purpose of helping to organize, track and move inventory in and out of the warehouse. Inaccurate labeling can create operations delays while staff try to locate products or verify inventory accuracy.

Product labels help the consumer identify products and their components. Food labels are the most commonly viewed product labels; they list a product’s nutrition facts and ingredients. Depending on the industry, these need to adhere to government standards and regulations and customer requirements.

Shipping labels identify shipping point of origin, destination, sender, receiver, package weight, product specifics and tracking codes. Any shipping label errors may prevent on-time delivery, or in some cases, any delivery at all. These typically need to conform to carrier standards and customs requirements.

Each label plays a key role in keeping products moving through the supply chain, yet many companies still don’t have a proper workflow and software in place to manage labels. Technology provides easily replicated digital label management processes that help minimize labeling errors.

An example of Synkrato digital labeling that allows for group management. Users can create teams and share labels for easy access. Image courtesy of Synkrato.

LEVERAGE LABEL TECHNOLOGY

Label management platforms aren’t a new concept, but they are getting more attention as more companies work with suppliers around the globe. However, not every label management platform meets every organization’s needs. Points to consider when exploring a labeling platform:

• Does my supply chain involve multiple suppliers? If the answer is yes, then consider a cloud label management platform. When label templates are stored in the cloud, all stakeholders can access them from anywhere. Users upload a label and send access to suppliers, preventing storing and maintaining duplicated label templates and back-and-forth emails to ensure that everyone is using current label templates.
• Another point to consider is whether or not the label management solution you are interested in can be easily integrated with your existing supply chain software. If you’re already using software to manage supply chain details, like a transportation system or a warehouse management system, look for a label management platform that is software agnostic so that it can be integrated with all of your legacy systems. Software integration can improve efficiency. For example, a ship confirmation transaction can trigger internal labels and interface with a carrier (like UPS or FedEx) to generate a carrier-specific label.
• And finally, find out if the label management platforms you’re reviewing allow for creating business rules. Business rules are especially important if your organization is highly regulated or part of a global ecosystem. For instance, in the EU, food labels need to provide specific information about the ingredients, and the information needs to be presented in a precise way. The font has to be printed with a minimum x-height of 1.2 mm unless the largest surface area of the packaging is smaller than 80 sq cm, in which case companies can use a font with a minimum x-height of 0.9 mm. Let’s say that a U.S. food company supplies food to a company based in Ireland. The labeling system should be able to automatically identify the label template that complies with Ireland food regulations and populate the information automatically from the company’s ERP system. That way, operators don’t need to worry about whether they are using the template with accurate font sizes, and can remain focused on validating the information, running a print test and completing the labels.

Label management platforms can help eliminate labeling errors in additional ways, but the three points outlined above are key to maintaining a transparent supply chain and allowing labels to do what they are intended to do: correctly identify goods and ensure that they are at the right location at the right time. WMHS

Amin Sikander, President and CEO of Synkrato, has more than 25 years of experience in supply chain software and was one of the original architects of Oracle WMS. Sikander’s experience in software development and supply chain set Synkrato’s strategic vision. Synkrato harnesses the power of AI, AR, mobility and IoT to bridge the gap between the physical and digital world. Synkrato has five core components: digital twin, adaptive slotting, mobile app builder, IoT and digital labeling to make supply chains reliable, resilient and scalable (www.synkrato.com).