The ubiquitous labels that accompany electronics shipments are more complicated than most people imagine. Barcodes on these labels are packed with standard information such as the manufacturer of the product and part number. However, many parties along the supply chain – raw materials suppliers, component manufacturers, distributors, sub assemblers and end-customers—want unique information in barcodes as well. Although linear barcodes are adequate for this purpose, the electronics organization ECIA is spearheading an effort to move toward more data-intensive 2D barcodes.
Labeling today is complex; electronics manufacturers in particular 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.
How can you leverage innovations in enterprise barcode labeling to help your electronics company succeed in a highly competitive global marketplace? Joe Longo, industry specialist with labeling solutions provider Loftware, addresses key top-of-mind challenges that companies face in the second part of this Q&A. (See Part 1 here.)
Q: How can labeling help us expand into new markets and geographies?
With competition as fierce as ever, electronics manufacturers are always looking to improve efficiency, including moving operations to cheaper countries. China, Mexico, and India are common destinations for outsourcing. With this expansion to new markets, there’s a need for speed as automation technologies quicken production and time to market, but is your labeling able to keep pace, especially when there are requirements for multiple languages and complex barcode data?
For example, certain health and safety information must be in the language of the country where the product is made and, if it’s being shipped to another country, then the same information on the label must also be in that region’s local language.
When a specific regulation changes in a country that you’re shipping a product to, can you make the necessary text changes to labels quickly without stopping the manufacturing line? We’ve outlined the value of pulling data from sources of truth like SAP or Oracle, but a change like this may require programming, which can take 4 to 6 weeks to complete.
To overcome this challenge, look for enterprise labeling with built-in business logic that can be dynamically updated as needed without having to wait for changes or updates to your enterprise application. Business rules can be configured and customized within a standard user interface to update label specifications quickly and dynamically—be it language, branding, regional compliance—where they’re needed.
Let’s take that same example of the health and safety information on the label. Suppose you bring on a new distributor in Germany who needs product right away to meet a huge customer opportunity. With configurable business logic as part of the labeling solution, select users can quickly pull up the template and translate the text to German without any delays. Product gets out the door within days versus weeks or months.
Q: How can labeling improve compliance with regulatory requirements?
Certainly regulatory compliance has to be considered in the electronics supply chain with organizations such as the Electronics Components Industry Association (ECIA) dictating barcode standards for shipping containers, shipping and receiving transactions, 2D machine readable symbols, and more. Add in the requirements of government organizations like OSHA’s GHS or EU’s RoHS and REACH, and the challenge to comply swiftly and accurately gets even more daunting.
Case in point is the continued popularity of smartphones and tablets, a market that is expected to reach $733.7B by 2022. Consumers are drawn to devices with high screen resolutions and color accuracy. But many of these screens contain hazardous substances. Manufacturers cannot invest in new technology unless they contend with the cost of complying with the RoHS standard.
Updating product labels to reflect the materials contained within the smartphone or tablet can be complicated. Sometimes, manufacturers actually weigh if it’s easier to procure and use non-hazardous materials than to manually adjust labeling. But as we’ve discussed, with an enterprise barcode labeling solution electronics companies can make the regulatory change and automate the process with relative ease.
Q: How can labeling help combat counterfeiting in electronics?
Some reports estimate that up to 8% of total market revenue for electronics components are diverted through the gray market. For the semiconductor industry alone, which earned almost $336 billion in 2014, the gray market could account for up to $26.8 billion. A standardized and centralized approach to labeling provides tighter control of the creation and print distribution of the labels. This gives the original manufacturer complete oversight of the issuance of serial numbers to be applied to the labels. This is the main foundation of the traceability solution that the electronics product will need has it traverses across the supply chain (e.g., distributors, 3PLs, transportation providers, customers) to the end user.
Now there are multiple providers of track and trace solutions, but the label serialization starts at the centralized location of the manufacturer. By providing tight security and control of the original serial numbers, electronics companies can easily verify the authenticity of the product during the verification process. One way to create a “first line of defense” in the process—and what was mentioned earlier—is to allow approved suppliers and distributors to participate in streamlined labeling solution. Standardization of barcode labeling solutions with approved suppliers and distributors can greatly diminish the likelihood of obsolete or counterfeit components making their way into the supply chain.
About the Author
Joe Longo is Electronics Industry Specialist with Loftware and has been working with Loftware enterprise customers in the electronics industry for over seven years. His customers include some of the largest electronics manufacturers in the world: Jabil Circuits, Flextronics, Celestica, Kemet, Plexus, GE and more. Highly knowledgeable about the key issues most EMS manufacturers are facing today, he provides in-depth studies and recommendations to electronics manufacturers on solutions to their labeling requirements. Email: jlongo@loftware