The Humble Label in Supply Chain – Too many of them are in use!

Label

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We need to move away from labels!

I retired from a multi-national supply chain management company to become a co-owner of a label manufacturing company, which was a real culture change for me.

In the past discussions were held with a Director or Vice President of Supply Chain or Procurement or even the Chief Operations Officer about the design or re-design of the Supply Chain.  In my new position, I get to meet the buyers or an executive in charge or procuring labels.  In some companies they are categorized as “Consumables”.

There is very little high level attention paid to labels due to the low cost of the labels which can be a few cents to less than a cent. Many buyers feel that the labels are such insignificant parts of the product and place very little time and attention in the sourcing and procurement of the labels.

It is also surprising to me how little knowledge these buyers have about labels without realising that there are complexities related to labels. (This article is not to discuss about labels it is about the need for labels and the need to reduce their usage.) What many companies do not realize is that there can be millions of labels purchased every month.

The Proliferation of Labels

This begs the questions:
1) Why is there need for such a high volume of labels?
2) Why do we need these labels?
3) Why we need so many types of labels?

These questions are often neglected.  In Supply Chain attention is paid to the efficiency of the supply chain, how to move goods faster, improving inventory turns, how to store more efficiently, and how to pick faster.  Past articles in this blog have addressed them.

High volumes of labels are purchased as they are needed in many places, such as:

1) On the product itself – warning labels, instruction labels, specifications labels, identification labels
2) On the product boxes – warning labels, instructions labels, identification labels, marketing labels to “beautify the product to attract consumer attention”.
3) On the shipping carton – Warning labels, Address labels, return instruction labels, identification labels

 

These labels provide information that is required or what the manufacturer wants to provide such as:

1) To meet regulatory requirements by governments or regulatory bodies
2) As a marketing tool to show the benefits of the product
3) To inform the users on how to use the product
4) To warn the users on the potential dangers
5) Shipment addresses or return addresses

And with the move to E-Commerce the use of labels are rising as companies are shipping more packages or small quantities in packages. These packages are individually packed with unique address labels. Supply Chain service providers are buying more blank labels.

They need to print information on their thermal transfer labels sticking them onto boxes or pre-printed labels to stick onto boxes as they are required for purpose of providing the information stated above. If the purpose of labels is to provide information such as warnings and addresses is there a need to continue to use labels and continue to purchase millions of them?

There need to be a change in how we see these humble labels;
1) Focus on how to provide the information that the labels provide and how can it be done without using a label
2) Do we need to stick a label or several labels onto the product or the boxes
3) Is it cost effective to buy labels, thermal transfer printers or other printers and thermal transfer ribbons or ink cartridges versus other forms of technologies.
4) Why is label termed as consumables and assigned to a low-level buyer and not viewed as an important item if labels provide so much information that affects regulatory requirements and service to consumers
5) Engineers that set up manufacturing lines or shipping lines need to look at more than thermal transfer printers as they are “comfortable” with them since they have been in use for decades.

There are available technologies and printers that can replace labels but the usage has not proliferated. With more businesses moving to E-commerce we cannot allow the use of labels to increase exponentially.  Like how we reduce the use of print media with technology we need to look at labels usage and replace them.

There are printers capable of printing directly onto product boxes or cartons, even cans and bottles.  Companies need to explore such alternatives and look at longer term benefits of such technologies rather than continue to rely on current practices.

There can be obstacles such as:
1) Cost of printers, they are not cheap compared to thermal transfer printers currently in use.  The cost benefit of moving away from labels is not significant
2) Availability of technologies.  Not many of them provide a range of solutions that can print on different materials
3) Speed of printing or transfer of dynamic information to printers especially when high volume, high speed labelling is required.
4) Regulatory bodies acceptance as they may set specifications that makes use of label necessary
5) Ease of use, not as widely used as thermal transfer printers
6) Quality of the print from carton or box printers
7) Need to reuse shipping boxes

With the increased usage of direct printers and with more acceptance the above obstacles can be overcome and the benefits of moving away from labels will be realised. I also see this as an additional step in being eco-friendly and is good for Corporate image.

Conclusion

I am a co-owner of a company that manufactures the humble label, you may think that I am crazy to have a belief that we need to move away from labels.

Like the printed manual, use of labels should be reduced or replaced, not be treated as insignificant item and usage is allowed to increase just because labels are cheap.

I do hope that companies do look into replacing labels with other printing technology and companies that provide the technology work on making the technology accessible and affordable.

 

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