Labeling today is complex; today’s manufacturers and multi-tier suppliers are faced with a range of evolving requirements that complicate the process—and leave many companies accepting this process as the cost of doing business. But it doesn’t have to be. Labeling can make a huge difference, enabling IT and supply chain decision makers to not just overcome challenges, but provide their company with a distinct competitive advantage. Here are five ways how the right labeling solution can deliver significant, measurable results for you.
Labeling Makes a Difference in the Highly Complex Automotive Supply Chain
The automotive industry has an intricate supply chain that’s only growing more complex with a broad range of players, including OEMs, sub-tier suppliers, warehouse and transportation managers, distributors, retailers, and end consumers. At the core of this materials flow is the label, which serves as the identifier of the product, determines its destination, and carries a variety of data required to assure that it is successfully received and processed. Each step requires accurate barcode labeling for faster, more efficient processing as well as precise track and trace of so many parts and assemblies along the way.
Since the data carried on the label inevitably finds its way back into an inventory, WIP, or warehousing system, it is the crucial component in providing an accurate snapshot of present state inventory across the enterprise. The cost of label inaccuracy is significant, yet most companies do not measure it effectively. There are substantial gains in assuring label accuracy, and many companies might be surprised to know the bottom line impact of not having this assurance. For example, recently a company determined that an accurate and ongoing perspective of the inventory in its supply chain—realized by the data gathered from its labels—would enable it to reduce safety stock conservatively by three days freeing up several million dollars of capital. An enterprise labeling system will be at the core of this solution.
At the same time, companies are dealing with customer-specific requirements that are increasing at a rapid rate. You’re seeing more and more customers (whether they’re OEMs, next-in-line suppliers, or resellers) demand that graphics, translated text, branding, and more be added to their labels. As a result, the burden of creating and maintaining compliant labels has become increasingly demanding and costly—with some companies managing a staggering amount of label templates to capture all these requirements.
Adding to this complexity is an ever-increasing amount of redundancy as companies rely on a variety of disparate labeling solutions across global locations, each providing identical label design and maintenance in a completely siloed, disconnected fashion. Some companies even use different labeling solutions for different purposes within the same facility: distribution labels for one, shop floor labels for another. This approach drains resources and flies in the face of trying to simplify processes and gain efficiencies in a complex global supply chain.
Which brings us to the inherent business benefits of a standardized enterprise labeling solution. By taking a holistic, integrated approach to labeling, automotive companies can respond quickly to new and evolving requirements, while maintaining labeling consistency across the supply chain. Dynamic, data-driven capabilities allow OEMs, suppliers, and even warehouse distributors to take control of labeling—with fewer templates—and achieve dramatic reductions in overall maintenance and the costs associated with it.