The way that suppliers label their goods has major implications for the operations of many businesses. Take the aerospace industry for example, where the requirements for the parts used in aircraft are extremely stringent. Even when a supplier has been selected, their labeling methods can make it difficult for the manufacturer to adhere to traceability requirements.
The implications of this are far-reaching for any business that relies on a supply chain. Dealing with multiple labeling standards can mean that warehouse staff need to spend time manually checking products themselves. This leads to increased stock turnaround times and possible missed production lines. This is not acceptable in a business landscape where reducing inventory and moving product quickly through the warehouse is key to remaining competitive.
These issues have been well recognized for many years and some manufacturers have even tried to mandate that their suppliers adopt a certain labeling process. However, this approach has not solved the problem. The reasons for resistance are numerous. Suppliers might have weak or non-existent IT infrastructures or feel overwhelmed at the thought of adopting all the labeling standards for their multiple customers.
But are these concerns justified? Of course, with traditional labeling solutions they are, but, with a modern, cloud based-based solution, many of these objections can be mitigated.
Standardizing the supplier labeling process
Würth, a global market leader in the sale of fastening and assembly materials, was a company which was struggling with many of the typical labeling challenges created by a legacy system. Their solution was custom-built and consisted of a locally installed database, label design software and a label print interface. Everything was updated manually which made it impossible to have an overview of which label software version Würth’s suppliers were using.
The business was receiving incorrectly labeled goods which meant products needed to be relabeled and shipments were delayed. They decided that they needed a centralized database which could be provided to their suppliers without the need for any IT installations or changes to their current printer models. To get suppliers on board, it was crucial that the new labeling system could use the suppliers existing printing infrastructure. And the best way to achieve all of this was through the cloud.
Benefits of cloud
Würth implemented a web-based, standardized solution which has been able to speed up their new supplier onboarding system and it ensures that users are always using the correct label version. Furthermore, because all the information is hosted in the cloud, it reduces any IT security concerns in terms of securing the business infrastructure.
In fact, using the cloud can make life easier for everyone in the supply chain by:
- Guaranteeing the same label output, regardless of the supplier’s printer brand or technology. It gives consistent, brand-compliant labeling, and suppliers get to keep their existing IT infrastructure
- Reducing the IT burden and security risks. With cloud-based supplier labeling, IT staff don’t have to spend time granting suppliers access to internal labeling infrastructure. This saves time and IT resources, and it protects systems and key data from unauthorized access. Suppliers always have access to the most updated version of the label template
- Preventing any IT burdens. All suppliers need is a username, a password and an Internet-enabled device
- Getting up and running quickly. The Cloud offers suppliers an instant deployment and a quick onboarding process
Ongoing business efficiencies
Businesses looking to standardize their supplier labeling process need to look for solutions which have a built-in label designer, an application builder, a document management system for streamlined quality assurance, and built-in support for manual data entry and integrated label printing. As it is hosted in the cloud, it also reduces security concerns and IT effort in installing and securing access to the required infrastructure.
When supplier labeling is done well, businesses report real tangible benefits. For instance, a furniture manufacturing company was able to reduce the time to unload a truck by 44% and increase turnover in the warehouse by 55%, which enabled them to reduce inventories and move goods more quickly through the warehouse. This clearly leads to a faster time-to-market and a more competitive and efficient business model. Besides €1.65 million working capital savings from reduced inventory, they were also able to increase labeling compliance, leading to more consistent labels and improved supplier relationships.
In summary, standardized supplier labeling enables companies to reduce inventories, move goods more quickly through the warehouse and ultimately leads to a faster time-to-market and a more competitive and efficient business model.
To learn more, visit the NiceLabel’s supplier labeling solution page.