It’s an all-too-familiar scene in many manufacturing facilities: the inventory is there, the workforce is ready, and the production machines are operating. However, operations are halted because a minor labeling error is preventing labels from being received and placed on the assembly line. Now, nothing is getting done, and valuable time is ticking as earnings are lost.

For those who haven’t experienced this, the numbers don’t lie. Per a recent study, 76% of manufacturers mislabel more than 10% of all goods, while organizations worldwide lose more than $1.3 million on average due to production line shutdowns caused by label printing problems. And this data may not even account for hidden costs, such as damage to a brand, lost business, bringing on emergency labor or the waste produced when discarding large volumes of erroneous labels.

So, if labeling errors are so costly, why do they keep occurring? And, importantly, what can be done to mitigate them?

Labeling Errors – Cause and Effect
When an error occurs, the solution is often brute manpower and time. For instance, workers must often laboriously apply new labels by hand, scan them into a system and then unpack them. This becomes especially costly when a receiving company finds an error, has to relabel every item, and their inventory cannot be passed forward to production. Yet, though mislabeling and manual corrections are costly, many accept this as a part of business, with some even budgeting millions annually to account for label errors that can just as easily be avoided.

A prime factor contributing to errors is that many still rely on fragmented labeling systems that vary across warehouses, distribution centers and other facilities. These solutions are often homegrown over long periods and create a host of issues, such as updates not being made universally, a lack of label templates that are consistent and instances of human error from manually entering data.

All the while, inefficiencies from fragmented labeling approaches are becoming increasingly less sustainable due to a plethora of changing conditions, such as evolving regulations and a greater emphasis on collaboration and supply chain agility.

A Road to Consistency and Accuracy
While many have yet to standardize labeling domestically, many organizations today must address logistics on a global level. Globalization means a US headquarters facility may outsource manufacturing to a facility in another country like Singapore. This means organizations will need to communicate the correct label format and template halfway across the globe.

Helping to ensure consistency, many organizations have adopted software that can automate labeling and integrate it with existing enterprise applications. With this approach, a facility in one country could interface seamlessly with the enterprise resource planning (ERP) system used in another. This way, when records are altered within the business application, changes are reflected in labels printed around the world.

Cloud-based platforms can also help integrate label data with enterprise-wide business applications and ensure facilities have direct access to the most accurate and consistent source of truth for their labels. For instance, organizations often merge and find that their new partners use incompatible software. It can be inefficient and wasteful to replace old equipment. But with the power of the cloud, the latest labeling software can be easily extended to provide standardization and easy integration across the entire global enterprise. Even if varied printers and other hardware are present in different facilities, a cloud-based approach can enable companies to use a single common interface to access label templates and content to support seamless high-volume label printing.

Adding further to efficiencies, some labeling solutions can enable remote printing, allowing administrators to print via the internet without relying on direct network connectivity to printers. This means that with controlled access users from any location can extend printing across remote sites and partner locations while maintaining quality.

The Power of Business logic for Label Changes
Meeting international shipping regulations can be challenging, as label creation involves many variables, such as the country of origin, the destination and all stops in-between, as well as the quantity and type of cargo. However, navigating these challenges becomes simpler if organizations use a dynamic system for labeling that maximizes support for various label combinations. Such solutions enable organizations to leverage data from their record systems and configure rules that dynamically change label content based on their data.

Instead of manually researching the required pictograms and legalese for labels in a given region, dynamic solutions can enable a business user to update or access completed label templates in a simple way, such as a drop-down menu to pick between countries of origin and destination as well as the nature and quantity of products being shipped. This means label changes can be completed by employees of various skill levels and is less dependent on costly and scarce IT resources, as the solution makes decisions for users based on logic and data created by experts.

Eliminate Errors to Improve Inventory Planning
Manual, siloed labeling practices jeopardize manufacturers and supply chains alike. Therefore, more organizations are increasing agility by standardizing, centralizing and streamlining labeling processes on cloud-based systems and digital platforms. These actions not only future-proof core businesses, but they also benefit partners, vendors, or subsidiaries, so they never have to worry about receiving mislabeled goods again.  

About the author: Josh Roffman is the vice president of global product management at Loftware. He has over 25 years of marketing and product management experience with leading enterprise software companies. He is responsible for defining Loftware’s product strategy and was instrumental in the launch of Loftware Spectrum, a powerful enterprise labeling solution. In addition, he is responsible for overseeing all corporate marketing functions and leads Loftware’s thought leadership efforts.