Supply chains have become increasingly important as businesses become more global and interconnected. Globalization and digital technologies are changing business, especially as companies look to accelerate growth and expand into new markets. To do this, companies must create efficiencies in their supply chain and be able to address complex and ever-changing supply chain dynamics.
Loftware conducts an annual survey to determine the impact of labeling on today’s supply chain. The company polled more than 800 supply chain and IT professionals in 32 countries to gather insights on what they saw as the major trends in Enterprise Labeling for 2017. Its fourth annual “Top 5 Trends in Enterprise Labeling” report noted significant shifts in labeling that are impacting global supply chains at an unprecedented level.
Companies that are open to innovation and those running enterprise operations in a collaborative fashion are the ones that will succeed in this new landscape. Businesses must be able to achieve high levels of agility, consistency, control and transparency to prosper. This is why it’s critical to identify, understand and measure how labeling has a strategic impact on your supply chain and your company’s business growth. To sustain a competitive advantage in their market, companies must be aware of how labeling trends impact their supply chain now and in the future.
Trend 1: Labeling as Global Initiative
Approximately 65 percent of those surveyed claim that they recognize the necessity of having labeling addressed on a global scale. More than half of those work for companies that maintain labeling across a global operation, with five or more locations. Therefore, labeling, which intersects the supply chain at all levels, has become mission critical in meeting evolving customer requirements, keeping up with emerging regulations, and avoiding disruptions from the manufacturing line to the warehouse. At the same time, as companies look at labeling on a global basis they must consider how to effectively deploy and maintain their labeling solutions. There are three important considerations when thinking about labeling globally:
Standardization is the single-most important criterion for companies as they look to extend their labeling across a global supply chain. Although many companies reported that they still use multiple labeling solutions, more than 90 percent say it’s important to standardize labeling. This is because standardizing on a single enterprise platform provides company-wide labeling consistency, accuracy and seamless IT oversight while also enabling business continuity. It works toward addressing a multitude of potential problems including mislabeling, relabeling and more—regardless of the number of global locations.
Those who thought standardization is important listed consistency/accuracy, maintenance and support as the top three challenges of managing multiple different labeling solutions. The focus even when deploying solutions in a distributed fashion is to maintain the ability to leverage common data sources, components and configurations across sites. To make global deployment and management a reality, labeling solutions must provide complete control over how labeling capabilities are deployed for locations, groups and users across a company’s global landscape, from design to integration to print.
Global corporations are often presented with the conundrum of choosing between deploying systems and software centrally to maintain consistency and streamline management or deploying locally to maximize uptime and reduce risk. A paradigm shift is taking place in the enterprise labeling space that allows companies to leverage “multi-site deployment” capabilities to realize the benefits of both centralized and decentralized deployment at the same time. With these multiple site deployment capabilities, companies can manage labeling centrally and ensure alignment with corporate standards while enabling geographically dispersed locations to run autonomously without relying on uninterrupted access to the central instance.
Trend 2: Labels are Changing
The barcode label is simply not what it used to be. As customer and regulatory requirements increase, companies have been forced to make a record number of label changes and add more and more content to their labels. More than 80 percent of respondents reported that labeling requirements have become more complex in the last three years. To meet these increasing demands, labels today must be flexible and data driven to support the nearly limitless variability in requirements that exist.
Customers are more demanding than ever when it comes to the appearance, composition and content on labels. Over 70 percent of those surveyed reported that customer requirements have been a driving force in making labels more complex. Customer-specific labeling demands range from specific formats, barcodes and logos to languages and content. These requirements are most often driven either by a customer’s desire to streamline supply chain processes or to improve the branding or appearance of a product.
Companies are putting more and more pressure on suppliers to adapt quickly to their requirements while new regulations evolve around the globe all the time. Without the ability to streamline label changes to meet these quickly changing requirements, companies will be confronted with missed delivery dates, hefty fines and dissatisfied customers. Large companies often struggle to manage hundreds and thousands of label templates, making mass label changes a very difficult task
The best way to manage the growing complexity is to integrate labeling with business applications. Errors and inefficiencies driven by manual labeling processes, duplicate data, countless templates and locally controlled data sources waste resources and inhibit growth. By integrating labeling with existing business applications, organizations can leverage existing business processes and data enabling them to standardize, improve accuracy and offer consistency throughout their operations.
Trend 3: The Bimodal Supply Chain
As the complexity of a global supply chain increases, so too does the need to track goods and products that travel through it. Gartner indicates: “Digital innovation will lead to a new approach to the supply chain. The divide between what the supply chain provides and what the enterprise needs is widening. Closing that gap requires a new, agile approach to investment in technology, leadership and talent.”
More than 63 percent of respondents reported that they are currently combining digital technology with traditional practices to improve supply chain operations. This intersection between physical and digital worlds within a supply chain is intended to “renovate legacy environments into a state that is fit for a digital world.”
Companies are looking more and more to enterprise labeling to optimize the benefits of doing business in a bimodal supply chain. The labeling solutions that render barcodes, integrate transactional data from enterprise applications and apply serial numbers are, by definition, translating digital (data) to the physical whenever labels are printed. These labels are placed on boxes, cartons, pallets and crates representing the product’s passport through a global supply chain. Later, these same labels can be scanned for information (81 percent are scanning for product information), transforming physical information to digital systems, for traceability, inventory and warehousing purposes, and more.
A growing trend across multiple industries, the Internet of Things (IoT) impacts how businesses communicate and connect. One way this is happening is through labeling. Labels are vehicles for storing information, which can be easily accessed through scanning or sensing. This is an activity that’s becoming more prevalent in obtaining digital information in today’s bimodal supply chain.
It’s not just the supply chain that is embracing the move from physical to digital. Enterprise applications are no longer physically being installed simply on premise. In today’s supply chain they are often being hosted and delivered in the Cloud. Companies are moving their IT infrastructures to the Cloud to simplify maintenance, improve total cost of ownership and to streamline their on-demand provisioning of hardware and software. The Cloud model embraces the bimodal supply chain approach, provides flexibility to scale, eliminates the need for extensive disaster recovery plans and provides automatic software updates.
Trend 4: Upstream and Downstream
Companies that don’t attempt to connect business partners across the global supply chain are missing opportunities to meet new customer demands, grow into new markets and increase competitive advantage. More than two thirds of those surveyed see value in having suppliers print labels using a shared solution to ensure proper labeling. This is because labeling plays an important part in generating value from the supply chain network to improve efficiency and meet customer demands. When businesses extend labeling to partners and suppliers, they are able to avoid downstream processing errors and eliminate the need for relabeling.
For many global companies there is too much risk and cost involved in relying on suppliers to label goods correctly. An incorrect label can disrupt receiving and warehouse processes that may result in downstream impacts on manufacturing and even customers..
Relabeling is a major source of inefficiency and cost. Companies waste millions of dollars each year relabeling goods that are received but lack the necessary label information and formatting required. They relabel goods and products to ensure that the proper barcode symbols, images, branding and data content is available to support subsequent processing. However, nearly 60 percent of respondents believed extending labeling capabilities to suppliers can eliminate the need for relabeling.
Trend 5: Success Requires More than Software
Businesses today are relying on seasoned labeling professionals for best practices, implementation consulting, training and knowledge transfer to help ensure success. They understand that working with these experts can help minimize or eliminate production stoppages, optimize supply chain operations, improve customer satisfaction and ultimately increase business.
Companies with worldwide operations that include manufacturing and distribution facilities must ensure continuous flow of goods through the supply chain. To that end, companies are enlisting solution providers to properly set up environments to maximize reliability and provide 24x7x365 support for mission-critical labeling operations.
There is no “one-size-fits-all” labeling solution configured to meet the needs of each company. As regulations and emerging standards continue to impact a wide range of industries, labeling is a specific area where constant change is necessary to comply with evolving requirements. Therefore, it’s important to be able to tap into industry-specific knowledge and best practices so labeling can be configured and optimized to meet each company’s unique needs. This only happens when providers have an understanding of industry nuances, different business and supply chain models, regional considerations, and differing user communities within an organization.
As global companies continue to expand their presence, they must consider how to efficiently deploy and maintain labeling solutions. They must be able to handle the rigors of global infrastructures, manage outages and connectivity issues, while providing high availability, failover and disaster recovery capabilities.
Training is also a critical step in educating users and administrators on the capabilities and options available to best meet the labeling requirements. Getting that training directly from the people who developed the solution offers a clear advantage ensuring the business is getting the most out of its investment.