One trend that is revolutionizing the way businesses of all sizes operate is the use of cloud computing. Although the technology has been around for many years, it’s only fairly recently that companies across all industries have started to adopt this method in favor of traditional data centers that require dedicated hardware resources.

These organizations are moving to the cloud to address existing challenges. Driven by the need to insulate operations from ongoing supply chain disruptions, product shortages, cost pressures, process inefficiencies, and manual errors, Loftware’s 10th annual “Top 5 Trends in Labeling & Packaging Artwork” report revealed that 50% of companies already deploy important business applications in the cloud. This compares to just under 40% embracing cloud-first strategies for enterprise applications a year ago.

With quick deployment times, lower upfront costs, easy access, and the ability to scale, cloud technology is a game-changer for unlocking value. As illustrated by our research, an increasing number of business systems are moving to the cloud in order to realize these benefits, and labeling shouldn’t be any different. If you think of the label as a product’s passport through the supply chain, it becomes crystal clear how mission-critical this function is to all companies that operate across global supply chains.

Indeed, Loftware’s survey, which polled nearly 500 professionals across all industries and 55 countries, revealed that 71% of companies believe the cloud or a hybrid solution will be their preferred deployment method for labeling within the next three years. This is no surprise as today’s global supply chains require new levels of visibility and agility as companies add new suppliers and partners, expand into new regions, strive to ensure continuous operations, and attempt to meet increasing regulatory and customer demands.

Traceability increases in importance
Recalls have proven to be a massive disruption to supply chains, worsening delays in time to market, demanding costly fines, risking consumer health, and damaging brand reputation. This rings true in the medical device, pharmaceutical, and food and beverage sectors in particular.

These industries are heavily regulated, therefore oversight is incredibly important and one error could derail an entire product line, resulting in financial penalties. At Loftware’s Convergence Conference in November last year, John Blake, Gartner senior research director, highlighted the costly results of inaccurate labeling and discussed how non-declared allergens, mislabeling, and inaccurate packaging graphics continue to be a leading cause of product delays and recalls, ultimately costing manufacturers millions of dollars in lost sales. He outlined how compliance violations in the pharmaceutical industry have exceeded $50 billion since 2000, while the average cost of non-compliance has grown by 43% over the past nine years. In the food industry, labeling mistakes are reportedly costing companies around $10 million on average in direct costs according to a joint study by the Food Marketing Institute and Grocery Manufacturers. Therefore, finding ways to minimize errors is paramount and to do so in an efficient manner will be a major factor for business success.

According to Loftware’s survey, 70% of organizations say that global traceability is a priority for their business in the next 12 months. Businesses are demanding solutions that enable faster reaction times to manage potential recalls and avert risks presented by falsified goods and counterfeit products – all of which could damage brands and threaten customer safety. To manage these threats, businesses must embrace cloud technologies that improve their ability to track and trace products throughout their lifecycle and across global supply chains.

Better track and trace through supply chains can also help companies to deliver on their corporate social responsibility goals. 76% of those surveyed by Loftware reported already having a sustainability initiative within their organizations, indicating how important this issue is across all sectors. As sustainability targets continue to grow in importance, companies must consider how they can improve labeling and packaging strategies and continue to focus on the customer experience, all while meeting new environmental goals and watching the bottom line.

Part of this is around how social, ethical, and environmental performance factors into the process of selecting suppliers. Being able to trace products both upstream and downstream will become important for managing the product lifecycle and ensuring sustainable sourcing. These intelligent supply chains can track, trace, and authenticate goods at every stage of the journey, from raw materials to consumer goods. Additionally, modern labeling solutions reduce inventory, eliminate a large global footprint, and ensure that all products are made, shipped, and delivered to the right place, thereby avoiding unnecessary loss and waste.

Digital transformation extends to all-in-one labeling solutions
Gartner research highlights that 94% of CEOs want to maintain or accelerate Covid-19 pandemic-driven digital transformation programs. As part of this journey, companies are seeking an all-in-one labeling solution that can meet the full scope of their requirements for bringing products to market quickly, efficiently, and more competitively. Then there’s the increased demand to print on anything from hard or flexible plastic like a water bottle, to a foiled pouch, a curved surface, or even wood.

This has created a desire for an all-in-one solution that offers integration capabilities to manage output for all devices from thermal label printers, to color inkjet and laser, coding and marking devices, visual inspection systems, serialization solutions, and more. Through the advancement of cloud-based technologies, companies can now use their marking and coding equipment as part of a “one size fits all” intelligent factory operation. This benefit is illustrated in Loftware’s report, with 79% of supply chain professionals believing a centralized and standardized approach to all print output is the top benefit of implementing a unified system for labeling, direct marking, and coding.

By adopting such a solution as part of a digital transformation program, businesses will gain printing flexibility, accuracy, production line uptime, and efficiency to manage costs and support global growth.

Adapting to the new normal
Global supply chains have undergone a massive overhaul since the Covid-19 pandemic. While the environment was challenging, the lessons learned will prove to be invaluable – both today and in the future. As companies deal with new challenges, such as the ongoing war in Ukraine and a turbulent global economic situation, new technologies and ways of working should be firmly on the radar of companies who want to optimize business processes and create new efficiencies. To survive this shifting business landscape and keep supply chains running smoothly, making the move to cloud technologies for important business applications such as labeling will be key.