If the common systems for product labeling in the electronics industry were working flawlessly, there would be no demand for change. But even just a cursory review of what manufacturers must accomplish in labeling generates a profile of an approach that is unsustainable. Consider, for example, what manufacturers need to do simply to comply with their customers’ labeling requirements as the industry continues to grow and expand product lines.
Customer labeling requirements often dictate the exact type and placement to be used on the product, box, carton, and pallet. It is not unusual for a major customer to demand exact specifications for label size, data titles, data field identifiers, as well as a dozen or more exacting guidelines for barcode symbologies. For example, one leading electronics buyer provides this guidance: “Barcodes should be within a character density range of 3.7 to 6.9 characters per inch, with a minimum element ration of 2.5:1 to 3.0:1...preferred.” And every major customer’s labeling directives can be different.
Customers today also want the manufacturers to exhibit faster, more reliable, more secure turnaround for the use of new label designs that evolve as products change. This comes at a time when products are changing faster than ever. The industry is already coping with possibly the largest number of serial numbers and labeling configurations of any industry in the world.
Failure to meet customer labeling requirements, especially across multiple customers with differing standards, leads to shipping errors, higher freight costs, returns, repackaging expenses, late penalties, compliance issues—and worse—customer dissatisfaction. For an industry already undergoing increased pressure on prices and margins, these outcomes negatively exacerbate corporate growth and profitability objectives.
The above example is about outgoing finished product. But electronics manufacturers have a labeling challenge with incoming raw materials—and an opportunity. At the same time, electronics manufacturers’ business sustainability depends on meeting customer labeling guidelines. In many cases, a manufacturer is taking delivery of raw materials or components with labels that bear no compatibility or consistency with their labeling system. This means it takes time to determine what exactly has been delivered and from which provider. It means these materials or components have to be re-labeled or over-labeled with product label substitutes aligned with the manufacturer’s system. This takes time, and contributes to added expense.
The contemporary objective is to have raw materials providers label their products in ways that are consistent and compatible with the manufacturer’s operations and labeling methodology. Unfortunately, “homegrown” patchwork systems and solutions that are not enterprise-driven, and do not provide integration capabilities with secure access to a provider of raw materials or components, cannot easily meet this objective, if at all.
And that’s not all. Regulations and compliance issues are ever encroaching in our sector as global environmental concerns deepen too. How will you meet the growing complexity of your supply chain with a more effective labeling strategy? First, it is necessary for the electronics industry to get a full view of the big picture, and that is exactly what a consideration of enterprise-wide labelingprovides.
Stay tuned for Part III of Enterprise Labeling: An Imperative for the Electronics Industry. Also, to find out more about how enterprise labeling solutions can improve business performance, view the recently released report on Key Business Drivers for labeling in your global supply chain.
Joe Longo is an electronics industry specialist with Loftware and has been working with Loftware enterprise customers in the electronics industry for over seven years.