| The primary use of labels is to communicate information. Any business that makes or ships products or delivers services uses labels at some point in their product or service life cycle. Labels are used during manufacturing, finished goods inventory, raw materials management, shipment to customers, management of assets, tracking of processes and resources and mail and delivery of packages and parcels. Bar coded labels increase the volume and speed at which data is communicated and processed, therefore increasing productivity and quality of data.
Many businesses and special interest groups acting on behalf of these companies, have established bar coding, labeling, packaging and shipping requirements and standards for their suppliers, as well as for their internal operations. Government agencies (i.e. OSHA, FDA, DOT) have also established regulatory guidelines designed to protect consumers and the environment from potentially hazardous products. The government has also mandated the use of bar coded labels for internal efficiency and cost savings in their procurement, shipping and tracking of goods.
The High Cost of Non-Compliance
Non-conformance to packaging, labeling and shipping requirements impacts the bottom line. Customer imposed fines for incorrect labeling, fines and legal costs due to violation of regulatory requirements, and lost business due to non-conformance to customer requirements is estimated to account for 7% of revenue for manufacturers.
A large electronics manufacturer reports that 3% of the more than 500,000 shipments they made each year contained errors resulting in rejected bills. "It used to cost us $25 per document to fix the problem; we put 2-D barcodes on our bills of lading and our error rate is now zero," says the supply chain manager.
According to an IT study published in June 2000, the cost of non-compliance and down time of mission critical applications ranges from $0.5K - $5K per day for every $1 million of revenue. This means that a company with revenues of $50M can incur losses of $5,000 - $250,000 per day when their compliance system is down. This study includes loss of productivity and revenue in addition to canceled orders due to delays as part of estimated financial losses.
The Advantages of Labeling Compliance
GM recently adopted a new label format that requires all vendors to use a 2D PDF417 code and a traditional 1D bar code on all shipping labels. More than 30,000 GM suppliers are affected by this requirement.GM estimates that suppliers compliance will save them between $100 to $300 million annually.
Compliance labeling impacts the entire supply chain from the suppliers of the raw material, to the manufacturer of finished goods, to the resale channels, to the client, consumer and government regulatory agencies. The widespread use of these labels influences production and shipment of products and allows for tracking people, material and processes. In addition to saving money,compliance to bar coding and labeling standards throughout the supply chain can improve quality, increase customer satisfaction, improve vendor relations and satisfy government regulatory requirements. Implementation of automatic data collection also eliminates errors and speeds delivery.
Target: 100% Compliance
Tattoo ID barcode labeling software offers all of the features and capabilities necessary to produce labels that comply with even the toughest standards. In fact, Tattoo ID Business Edition and Tattoo ID Enterprise includes templates for many of the most common labeling standards. So you can be printing compliance labels within minutes of installing the software!
Download a free trial of Tattoo ID Barcode Labeling Software and see how easy compliance can be!
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