Supply chains and the solutions used for managing them 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. Additionally, food and beverage companies have the added pressure of complying with standards and regulations such as the Food Safety Modernization Act, GMO Labeling and EU 1169 — the European regulation on labeling — all while keeping operations running smoothly. That's why more and more manufacturers are re-evaluating their labeling process to achieve sustained compliance and keep up with growing market demands.
To manage these challenges companies must create efficiencies in their supply chain and be able to address complex and ever-changing supply chain dynamics. Companies that are open to innovation and those running enterprise operations in a collaborative fashion are the ones that will succeed in this new global supply chain landscape. 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. In order to be poised 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.
To identify these trends, Loftware conducts an annual survey on the impact of labeling on today’s supply chain. We polled over 800 supply chain and IT professionals from organizations across all major industries in 32 different countries to gather insights on what they saw as the major trends in Enterprise Labeling for 2017. Check out the trends below to find out more.
Trend 1: Labeling is Being Viewed as a 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. At the same time, as companies are looking at labeling on a global basis they must consider how to effectively deploy and maintain their labeling solutions, how to support enterprise wide labeling changes and how to scale effectively as their businesses continue to grow and enter new markets.
There are three important considerations when thinking about labeling globally. First companies should look to standardize their labeling for global consistency and accuracy. This offers seamless IT oversight company-wide, and standardized labeling ultimately increases efficiency while helping to eliminate the costly errors associated with the use of many different custom, homegrown and third party solutions. Also, streamlined deployment and maintenance aids in scaling labeling globally. 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. Rather than manage multiple different systems, a standardized approach, which centralizes key sources of data, enables companies to simplify maintenance while supporting enterprise-wide labeling changes. Finally, multi-site deployment capabilities offer needed flexibility. This approach allows companies 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. Companies that understand this will find themselves ahead of their competitors in meeting evolving customer demands. 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. Over 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. In many cases, the key is enabling business users with a simple mechanism to make label changes as well as integrating with enterprise applications to automate labeling processes. This increases efficiency, leverages existing investments and reduces the need for countless permutations of label templates.
There are a variety of key developments that are driving change on labels at an unprecedented rate. First, labels are becoming more complex. Customers are more demanding than ever when it comes to the appearance, composition and content on labels. These companies are required to consistently pack more information on their barcode labels including product information, serialization numbers for traceability, industry-specific symbols and pictograms for safety warnings. Also, rapid label change is important with added pressure on suppliers to adapt quickly to their requirements while new regulations evolve all the time. To deal with this effectively companies must enable business users to make label design changes. They must be able to leverage business logic enabling label formatting and content to be changed dynamically. Additionally, the best way to manage the growing complexity in labeling is to integrate labeling with business applications. This allows organizations to leverage existing business processes and data enabling them to standardize, improve accuracy and offer consistency throughout their operations.
Trend 3: Labeling is at the Heart of 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.” Gartner further states, “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.”1 More than 63 percent of respondents report 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.”2 This approach allows manufacturers to gain “the best of both worlds” by embracing digital technology and new business models while continuing to use reliable physical processes that have worked well in the past. Labeling plays a key role in representing the bimodal supply chain considering the label is a physical representation of digital information, which is often encoded in a barcode.
Labels offer a key source for curating digital information with solutions that render barcodes, integrate transactional data from enterprise applications and apply serial numbers. IoT also impacts how businesses communicate and connect. 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. As companies are implementing IoT initiatives they are relying on labeling solutions to manage global printer networks, update device settings, send print requests and monitor status. It’s also important to note the rising significance of the Cloud. 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. Therefore, today’s labeling solutions must offer the flexibility of supporting Cloud based, on premise, and hybrid deployments as companies begin their migration to the Cloud.
Trend 4: Labeling Extends both 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. Over two thirds of those surveyed (67 percent) 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. It also removes the risk associated with shipping preprinted labels and allows companies to realize savings from cost of returns, improve brand consistency and ensure label accuracy.
Extending labeling both upstream and downstream has a host of benefits. For many global companies there is too much risk and cost involved in relying on suppliers to label goods correctly. When companies allow partners to access shared labeling capabilities, they ensure that those partners print the right label with the right content in the right format. This also allows adherence to corporate and brand standards and safeguards label accuracy. Also, 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. This is another reason why companies today are extending labeling to their suppliers to ensure that they adhere to existing labeling standards to avoid relabeling costs and guarantee compliance. Also, global manufacturers are increasingly faced with the challenge of integrating their aftermarket parts and services business with their supply chain infrastructure. Companies are now providing partners and customers with controlled access to labeling solutions as a means to enable labeling downstream so that those items will be labeled accurately and efficiently. It also proves significant in identifying and tracing parts and products.
Trend 5: Labeling Success Is More Than Just 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. These professionals are able to help them deal with the many unique labeling requirements to address dynamics of different industries, products, geographies, regulations and business models.
More than 92 percent of respondents using professional services found great value in those services. With this focus, expectations have increased for labeling professionals to understand and provide guidance on evolving industry standards and regulations, business processes and regional nuances, along with expert around-the-clock support to enable continuous operations.
Companies with worldwide operations that include manufacturing and distribution facilities across the globe must ensure continuous flow of goods through the supply chain. This is why many companies are enlisting solution providers to properly set up environments to maximize reliability and provide 24x7x365 support for mission-critical labeling operations. These global companies are requiring labeling partners that provide the knowledge, support and troubleshooting capabilities needed to maximize reliability and uptime. Also, as regulations and emerging standards continue to impact the food and beverage device industry, labeling is a specific area where constant change is necessary to comply with requirements such as UDI.
Additionally, as global companies continue to expand their presence, they must consider how to efficiently deploy and maintain labeling solutions so they can continue to scale. 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. A best practices approach calls for the software provider, who is by design most familiar with their solutions, to assist in installing and configuring the labeling environment, while offering any necessary training and support.
1 Christy Pettey, “Innovate Under Every Condition: The Bimodal Supply Chain,” 2016
2 Gartner IT Glossary (http://www.gartner.com/it-glossary/bimodal/)