More than three-quarters (76%) of IT directors in manufacturing across UK, US, Germany, and France admit that more than 10% of their organisation’s goods are labelled incorrectly every year. This rises to more than 25% of goods for a quarter (26%) of organisations, according to new research from NiceLabel, which polled 300 IT directors working for manufacturers across a range of sectors, including retail, pharmaceutical, food and beverage, automotive, medical device and chemicals.
IT directors say incorrect labelling costs their organisations on average £65,000 annually, with 61% saying their organisation incurred losses amounting to more than £50,000 from mislabelling on average in a year. And these are just the direct costs. Businesses should also be factoring in all the ‘hidden’ costs they may incur, such as loss of brand reputation, lost business, or lost time and money as a result of shipping delays, for example.
In line with this, minimising errors that lead to a need to relabel products is the second biggest challenge manufacturers face in getting new label designs into production, cited by 35% of respondents. The only challenge more pressing that this, was in fact trying to extend the labelling process seamlessly across the wider supply chain as noted by 38% of the sample.
Given this, it is perhaps unsurprising that 26% of manufacturers see ‘reducing costs’ and 18% see productivity gains among the main benefits of modernising and automating their processes, including labelling, with technology.
Highlighting the costs that labelling errors can bring, Ken Moir, VP Marketing, NiceLabel, said: “Mislabelling can often lead to issues with products and that can result in a need to quarantine and re-label product or packaging, which is costly, time-consuming and unsustainable. With growing pressure to increase supply chain efficiency and minimise waste and reduce resource usage, organisations can advance their operational performance and sustainability goals by reducing mislabelling. The key will be system and tools that allows centralised control of label design and printing across multiple sites.
“Correct labelling also means that extended supply chains can become more efficient and sustainable,” he added. “In the past, incorrect labels from partners and suppliers have often resulted in re-labelling upon receipt. The solution is to extend labelling to those suppliers to ensure they are using the correct templates and content to eliminate the need for costly and time-consuming re-labelling.”
[Image: Courtney Smith for Unsplash]
