5 Ways Inefficient Labeling can Impact ROI

Author: Scotty Lee, Content Marketing Manager, Seagull Scientific

Maximizing your return on investment (ROI) on barcode labeling software requires considering the various factors involved - from labor expenses to software costs, every aspect of your systems and operations can impact ROI. Labeling is a critical component for the entire supply chain and mistakes on labels can affect any party within the manufacturing and distribution process all the way down to the end consumer. 

Small labeling errors can lead to significant costs associated with reprinting and relabeling, or worse, industry regulation and compliance fines that can have a significant impact on your bottom line. Some industries such as food and beverage, medical devices, and pharmaceuticals, require additional governance to ensure labeling compliance. Labels contain essential information about each product, including safety information that can affect both consumers and those handling hazardous materials. Inefficient labeling in highly regulated industries can lead to inaccurate label data causing supply chain disruptions, resulting in lower ROI, potential reputational damage, and may cause harm to consumers or handlers. 

However, by leveraging automated labeling solutions, these unnecessary disruptions can be avoided and streamlining labeling processes allow for maximum efficiency and accuracy. Read below to learn more about the 5 ways inefficient labeling can impact your ROI. 

1. Duplicate Label Files can Lead to Labeling Errors

As companies expand, particularly into new international markets, they quickly discover that there is a diverse range of labeling regulations varying by region and by industry. These regulations can present unique challenges when it comes to streamlining label design, creation, and printing. Unfortunately, many organizations still rely on manual efforts to update labels, which can be extremely inefficient and prone to human errors ultimately leading to higher costs for the company. 

Manually managing labeling can create duplicate labels, which are often stored on employees' hard drives and shared via email. This leads to a disorganized system that is prone to errors because variations of the same label can exist, leading to confusion and potential bottlenecks in label operations. 

As the number of labels increases, relying on a manual process makes it progressively challenging to update files accurately (for example when global changes are needed for new products), to adhere to government regulations, or to make design or data changes within the system. This can lead to hours of labor and production downtime, with the potential for labeling errors that can result in product recalls and additional costs from having to rework labels. 

To avoid these inefficiencies and risks, it is crucial to implement an automated labeling process that can streamline label design, creation, and printing. This will not only reduce the potential for errors, but it will also save time and money in the long run.  

2. Compliance and Regulatory Fines

Companies within highly regulated industries such as medical devices, pharmaceuticals, chemicals, and food and beverage are subject to regulatory compliance from governing agencies worldwide. The industry-specific regulations and standards add complexity and heightened sensitivity to the labeling process, which must be executed meticulously to avoid mislabeling. Mislabeling can be costly, can create legal challenges, and can pose safety risks for consumers or workers. As a part of compliance processes, many of these industries require an audit trail for every label that is created to quickly identify product errors if they occur. 

For multinational organizations, the challenges of adhering to local, regional, and national standards in addition to industry standards are even more pronounced. Staying on top of the ever-evolving nature of regulatory compliance can be extremely difficult when companies rely on manual or outdated labeling processes. 

Inefficient labeling practices can result in substantial costs, compliance fines, supply chain disruptions that slow down shipments or production, and increased materials costs related to reprints and additional labor. Investing in the proper automated labeling solutions ensures compliance, avoids risks, and safeguards labeling operations. 

3. Inaccurate Labels Lead to Product Recalls

Poor labeling practices such as typos from manual entries, using outdated software, connecting to the wrong data source, or even simple printer errors can often lead to product recalls. Mislabeling can lead to detrimental effects on the entire supply chain from the added production, increased labor, relabeling, re-shipping, and the additional materials required to remediate. Mislabeling ultimately ends up hurting both the business and the end consumer because of the additional costs required to fix the labels as well as the end consumers being unable to purchase or access the desired products. 

Some common product recalls are caused by: 

• Undeclared/missing allergens in food products
• Incorrect ingredient information
• Incorrect nutrition facts
• Inaccurate instructions or warnings
• Packaging errors where labels are misplaced on the incorrect products
• Design and printing mistakes
• Language translation issues
• Incorrect hazard information
• Incorrect Unique Device Identifiers (UDI)

Unfortunately, even if the mislabeling is not your organization's fault, other stakeholders in the supply chain or vendors, can be held responsible for these errors, leading to costly relabeling, compliance fines, production delays, and damaged customer confidence.  

4. Bad Labeling Leads to Supply Chain Inefficiencies

In today's global economy, supply chains are complex and proper labeling practices are the core of smooth operations. Without the information on the labels to properly identify products, the rest of the downstream supply chain is unable to act on or distribute the products appropriately.  

Within supply chain, these labeling costs are the most common: 

• Labor costs associated with re-labeling
• Consumables to re-label items
• Compliance violations
• Inventory management
• Shipping delays
• Contract fulfillment delays
• Reputation damage
• Lost trust from customers

Mislabeled products reduce supply chain visibility within the supply chain stream leading to confusion and chaos between manufacturers, distributors, and retailers. Labeling issues have a trickle-down effect that are better handled when corrected at the originating source.  

5. Materials and Inventory Costs

Inefficient labeling practices continue to cost companies significant time, resources, and expenses every month. These errors often require a significant amount of labor, as well as the expenditure of valuable resources to ensure that products and materials are properly labeled before products move down the supply chain. 

For many, the problem is compounded by a backlog of products or parts that are waiting to be labeled or sorted, leading to a significant slowdown in workflows, production, and shipping times. Mislabeled goods create a bottleneck of rework leading to the exact opposite of what it means to maintain a lean operation. Depending on the product, new products may need to be manufactured or in simpler cases, the old labels must be removed, and new labels must be attached. Not only does it cost to redo the labeling on the products, but the backlog of products also creates additional inventory that must be stored somewhere – whether that is onsite at the warehouse or in a temporary warehousing unit.  

Achieve Greater ROI with an Effective Labeling Strategy

Labeling is an indispensable and core part of all businesses, with particular significance for those operating intricate supply chains and navigating highly regulated environments. Unplanned operations and hiccups within the supply chain from labeling errors have the potential to significantly impact the bottom line. 

BarTender offers an automated labeling solution that can assist companies in minimizing and avoiding expensive mistakes, reducing downtime, and increasing overall operational success. With seamless integration and deployment of labeling software into existing ERP or WMS systems, BarTender enables efficient design, creation, and management of the label design and printing process. 

Explore the full suite of BarTender's solutions by contacting us today or download the free trial for BarTender to experience how the world’s most trusted labeling solution can transform your labeling operations.