Evolving supply chain themes and technological advancements are compelling global businesses to reexamine how they label their shipments. Shippers want to streamline their processes, comply with regulations and initiate best practices. These are among five trends driving this practice.
TREND 1: Shipping Regulations
Labeling regulations are on the rise across all industries. From the medical device industry’s UDI (Unique Device Identification), chemical’s GHS (Global Harmonized Systems), and electronics’ RoHS (Restriction of Hazardous Substances), to pharmaceutical’s ePedigree and food and beverage’s GS1 Standards, evolving regulations are compelling companies to change their supply chain processes and adopt new labeling standards. It’s a matter of complying or facing hefty fines and lost business.
Here are the major regulations and standards shaping the face of labeling:
GS1 – The GS1 Systems of Standards offers global standards to improve supply chain efficiencies and visibility, and applies to multiple industries ranging from Healthcare, to Food & Beverage and Retail. Barcodes are implemented to support safety initiatives and to enable quick and efficient reaction to product recalls. GS1 also provides an EPCglobal Drug Pedigree Standard and certification.
ePedigree – Although it was initiated in California, most states have enacted some sort of pedigree requirement to protect consumers from contaminated medicine or counterfeit drugs. It calls for the ability to track and serialize unit level saleable packages (e.g. bottles of pills), not just cases or pallets throughout the supply chain. The primary mechanism for implementing traceability is using barcode and RFID technologies.
DQSA – Signed into law just last year, this national mandate calls for improvements in supply chain efficiencies and control, as well as brand/product integrity. This law establishes standards for the interoperable exchange of transaction information, including documenting the history of product movement, among all trading partners using unique numerical identifiers for each unit of sale.
RoHS – The directive on restricting the use of certain hazardous substances in electrical and electronic equipment (RoHS) was adopted in 2003 by the European Union and took effect on July 1, 2006. To indicate whether electronic products contain hazardous substances, many manufacturers are adding marks to indicate compliance with RoHS standards.
UDI - The Food and Drug Administration (FDA) has released a final rule requiring that most medical devices distributed in the United States carry a unique device identifier, including Class III medical devices, which must meet UDI requirements that also include submission to the GUDID by September 24, 2014. A UDI system has the potential to improve the quality of information in medical device adverse event reports, better target recalls and improve patient safety.
TREND 2: Labeling Centralization
Centralization supports business continuity in the face of natural disasters and lowers the IT cost of maintaining multiple labeling systems. There are three important drivers behind the push to centralize:
Labeling Consistency: To improve efficiency within the supply chain, organizations are making sure their locations produce labels that adhere to corporate standards from a formatting and data content perspective. At the same time, marketing departments are becoming increasingly involved in making sure that corporate brand standards are realized. Centralizing ensures that labels adhere to corporate standards and can be produced throughout an organization’s global supply chain.
Business Continuity: A centralized approach to labeling supports business continuity in the face of natural disasters and geopolitical unrest. By centralizing, global organizations can shift labeling from one facility to another to support continuous operations. At the same time, centralization removes the risk of not being able to replicate labels that may be facility or region specific.
Reducing IT Maintenance Costs: IT organizations find it increasingly difficult to manage multiple, different labeling solutions across global operations, especially as they try to reconcile the increasing complexity of labeling. By deploying a single, centralized solution for labeling, organizations can reduce IT maintenance costs while allowing the business to meet customer and regulatory labeling requirements.
TREND 3: Customer Demand
Customers are striving for efficiency gains by having providers meet their own labeling standards around data content, images, symbologies and languages. Advances in enterprise labeling are helping companies differentiate themselves by being more responsive to the labeling needs of their existing customers. Customer responsiveness in labeling typically centers on meeting the following expectations:
Including Specific Data Content: This may include transactional data like quantities, lot numbers or expiration dates to actual data from the customer’s enterprise applications, including product codes or purchase order numbers. Customers demand this data on their supplier labels to streamline their own processes and limit relabeling when goods are received.
Meeting Formatting Standards: Driven by their desire to control label formatting across multiple suppliers, the increasing importance of brand consistency and the need to simplify the receipt of goods, customers are demanding that their preferred label format is delivered by suppliers. Customers are specifying where data elements must appear, the images that should be used and the specific barcode symbologies required. By having suppliers meet these requirements, customers receive goods that align with their internal labeling standards while enabling support for downstream processing.
Regulations: New standards dictate which languages need to be applied to labels, based on where goods are traveling through the global supply chain. Rather than relabeling goods upon receipt, customers are demanding that their supplier and partners include the necessary data in the appropriate language for subsequent local processing.
TREND 4: Labeling is both Integrated and Data-Driven
Embracing a ‘Data-Driven’ approach to labeling is enabling companies to replace thousands of static label templates with a few dynamic templates that simplify maintenance, enable mass changes, and ensure label accuracy. There are three important considerations behind the move toward ‘Data-Driven’ labeling:
Integrated Labeling is becoming the norm: Most companies have accepted the value of having enterprise systems serve as the source of truth for label data, and are embracing the best practice of initiating labeling from their transactional system. As technology has made integration simpler, more companies are replacing manual labeling processes with automated, integrated labeling.
Big Data Meets Labeling: A data-driven approach enables support for all labeling permutations by making fields on a label dynamic and variable. This means that a universal change (like a logo modification) can be made by making a single update that is applied to all labels without necessitating changes to multiple templates.
Greater Integration with PLM and CMS Systems: By taking the latest approved content from the PLM (Product Lifecycle Management) and CMS (Content Management) systems, the enterprise labeling solution can ensure that label content is accurate and up-to-date without requiring a massive exercise to manage changes across thousands of labels.
TREND 5: Suppliers Assume a Larger Role in Labeling
Companies are now depending on suppliers and business partners to meet their labeling requirements. This helps cut costs, enhances supply chain collaboration and streamlines operations. Companies can also ensure accuracy and immediate deployment of label changes. Three important considerations behind this trend are:
Cost of Relabeling: Companies spend millions of dollars relabeling goods that are received but lack the necessary label information and formatting required downstream in the supply chain. Ensuring that suppliers adhere to corporate labeling standards eliminates this.
Successful Supply Chain Collaboration: As collaboration efforts show tangible benefits, companies are more prone to evaluate how extending labeling to supply chain partners can provide a similar benefit.
Reducing Labeling Errors: A customer requiring suppliers to use their labeling solution to print labels ensures currency and accuracy.
Josh Roffman is vice president of marketing and product management at Loftware, providers of enterprise labeling systems.