Reducing Supply Chain Complexity Through Integrated Labeling

by Kumar Singh, Research Director, Automation & Analytics, Supply Chain Management, SAPinsider

Supply chain disruptions are on the rise and one of many key reasons is the ever-increasing complexity of global supply chains. Complex SKU portfolios, scattered global manufacturing and distribution footprint, evolving customer segments, omnichannel, these are some of the examples of the factors that contribute to the complexities of global supply chain today. As organizations look for ways to leverage technology to develop responsive and agile supply chains to align with today’s VUCA (volatile, uncertain, complex, and ambiguous) world, centralized labeling capability is emerging as one of the key tools.

The critical role of labeling centralization and standardization in supply chains

Any experienced supply chain professional can tell you that among the many capabilities that define a successful, best in class supply chain, labeling is one of the key ones. Labeling plays a key role across the end-to-end supply chain, impacting areas ranging from demand planning to warehousing to shipping and is increasingly playing a much more critical role in today’s complex, omnichannel supply chains. Considering the impact a robust labeling strategy can have on supply chains, supply chain leaders are taking a hard look at their labeling strategy, more so now than ever before. And standardized and centralized labeling solutions are emerging as a key component of solution strategies of many organizations. Some of the key benefits of having a standardized labeling solution in place are:

• Meeting regulatory requirements: Many industries, like pharmaceutical and food and beverage, have strict regulatory requirements, when it comes to product tracking and labeling. Having a centralized and standardized label management process in place will help you manage and update label information centrally, thereby ensuring that all local label production, across all sites, consistently follow the same “single source of truth.”
• Managing quality requirements: The ramifications of bad or incorrect label data can be significant and can manifest in many ways, including legislative action and brand damage. Having archaic label management processes that involve fragmented databases and manual data entry, can open your organization to these risks. A standardized and centralized system will help you ensure information integrity across all locations.
• Improve process efficiency This one is straightforward. A standardized, automated, and centralized labeling solution means reducing labor hours spent on manual data entry and fixing errors resulting from manual touchpoints. That can have significant impact on process efficiency.
• Build process agility and resiliency: For a supply chain to be truly agile, all the key processes supporting the supply chain, including labeling, need to support that agility. A standardized and centralized labeling solution is flexible to support new products, languages, regions, formats, and shipping routes. Additionally, it is scalable and repeatable, allowing companies to quickly shift labeling from one location to another in case of disruptions.

In the light of all the drivers of centralized and standardized labeling mentioned above, Enterprise Labeling Solutions are emerging as a key component of solution strategies of many organizations.

What is an Enterprise Labeling Solution?

A key driver of the benefits of a centralized and standardized labeling solution is the ability to centralize labeling operations, provide a “ This essentially translates into the need for a platform that ensures consistency, maximizes flexibility and scales with your business. So an ideal labeling solution needs to be a dynamic, data-driven solution that automates and integrates labeling processes with business processes to standardize across global supply chains. These solutions need to integrate seamlessly with enterprise applications and facilitating bi-directional data exchange. The good news is that such solutions are available today in the form of Enterprise Labeling Solutions.

While traditionally these solutions have been available in on-premise form, best in class solutions offer cloud based options as well. These cloud-based solutions allow customers to centralize and standardize their labeling solutions while making labeling available via the network to remote factories and facilities. Deployed in the cloud, leveraging the infrastructure of hyperscalers like Azure or AWS, these solutions help you improve efficiency and reduce infrastructure costs, while improving the scalability and availability of your labeling solution. The service provider typically manages all system maintenance, monitors performance and uptime. These are highly scalable solutions that can support thousands of devices and users.

How multi-site labeling contributes to supply chain agility and resiliency

As supply chains evolve, they become multi-site and multi-facility. A large manufacturing enterprise may often have more than a dozen manufacturing facilities spread across the globe, manufacturing a wide variety of products. Despite this fragmented footprint, it is imperative that all these locations follow the same standardized labeling process, leveraging the same data set. With multi-site feature, business users at remote facilities, such as manufacturing plants, contract manufacturer sites, warehouses, and distribution centers, can manage labeling independently, while accessing standard and approved label data and templates from a company’s central location.

In today’s VUCA (volatile, uncertain, complex, and ambiguous) world, it is not difficult to imagine scenarios where a disruptive event, like a natural disaster, may lead to a manufacturing site losing network connectivity. Organizations cannot afford to halt their processes just because they have lost connection to a central system. Hence, it is imperative that they have a solution in place that allows them to maintain continuous label operations. Enterprise Labeling Solutions, which offer a muti-site approach, empowers remote facilities to run without depending on a full-time connection to headquarters while ensuring that they comply and stay current with corporate labeling standards.

An Enterprise Labeling Solution also enables rapid scaling of labeling operations as well as easy and fast migration from one operating location to another to preserve business continuity, a scenario many organizations ran into during the pandemic.  Seamless integration to business applications and connectivity with suppliers and partners not only adds an end-to-end visibility aspect but adds to the agility aspect of our supply chain capabilities.

No matter which SAP foundation or supply chain execution solution you leverage to support your business – whether you are on S/4HANA, ME, MII or EWM or still planning your move – integrating your business applications with a certified, comprehensive Enterprise Labeling Solution to manage labeling on a global scale reaps measurable benefits.

Though manually printing labels may be required in certain situations, labeling integrated with enterprise solutions allows companies to leverage existing business processes and vital data sources, while also maximizing existing investments and eliminating the need to retrain users. Drawing data from sources of truth, either manually triggered “on-demand” or generated directly from business processes within SAP, allows companies to respond quickly and efficiently to customer and regulatory labeling requirements. Companies achieve these goals while dramatically cutting costs, simplifying maintenance and improving time-to-market.

Integrating labeling with SAP and other business applications allows companies to leverage existing business processes and vital data sources, while eliminating the need to retrain users. To achieve accuracy and consistency, integrating to the sources of truth for label data is far more efficient than having multiple, possibly duplicate, sources of data. Whether your master or transactional data is from one or multiple SAP solutions, a best-in-breed Enterprise Labeling Solution does not replicate label content data, regardless of how labeling is triggered.

What does this mean for SAPinsiders?

It is imperative that SAPinsiders understand the strategic role that labeling plays in supply chains today. When SAPinsiders embark on their journey to implement a modern, standardized, and centralized labeling solution, there are few aspects that they need to specifically look for when evaluating solutions:

• Think about labeling as a strategic differentiator: From Pharmaceutical to food, labeling plays a key role in supply chains. Paying it the due attention that it deserves and strategizing building this capability can help create competitive differentiators. While a best in class labeling process creates process efficiencies as well, the benefits, as discussed previously go beyond that. So, having a robust, best in class labeling solution in place provides a competitive edge to your supply chain.
• Look for solutions that are “self-service”: An optimal solution should be one that allows the end users to leverage it optimally and intuitively in their day-to-day operations, with minimal involvement of technology resources. It should also allow the users to automate business rules that can help them address a wide range of customer requirements as well as regulatory requirements.
• Invest in solution, not infrastructure: In the age of cloud, a best in class, cloud-based Enterprise Labeling Solution should provide you all the power without the need for any of the infrastructure related investment.
• Evaluate the expertise of the vendor: A robust solution is important but equally important is the knowledge and expertise of the vendor that offers a solution. A vendor with extensive experience and customer base will not only offer a comprehensive Enterprise Labeling services and support but will also allow you to leverage their knowledge of the software and numerous successful implementations to drive your success

Kumar Singh, Research Director, Automation & Analytics can be reached at kumar.singh@wispubs.com