Chemical Industry Barcode Labeling
Demands, Risks and Implications
WHITE PAPER
Chemical Industry innovators have been resp...
Copyright © Loftware, Inc. All Rights Reserved. All other marks are the property of their respective owners.
Chemical Indu...
Copyright © Loftware, Inc. All Rights Reserved. All other marks are the property of their respective owners.
When this hap...
Copyright © Loftware, Inc. All Rights Reserved. All other marks are the property of their respective owners.
Specifically ...
Copyright © Loftware, Inc. All Rights Reserved. All other marks are the property of their respective owners.
Label-related...
Copyright © Loftware, Inc. All Rights Reserved. All other marks are the property of their respective owners.
Summary: The ...
Upcoming SlideShare
Loading in …5
×

Chemical Industry Labeling Wp

485 views

Published on

Chemical industry innovations have been responsible for numerous major product breakthroughs in a wide variety of industries throughout history. The impact over the years means the pressure today upon the chemical industry to continue and accelerate its rate of innovation has never been greater. Today, most industry sectors still look to the chemical industry to drive key product advancements such as improving pharmaceuticals, agricultural yields; making next generation transportation systems faster, lighter and more fuel efficient; and improving food flavoring, safety, and shelf life. The industry’s contributions of this type span virtually every other industry worldwide. Simultaneously, the industry is under pressure to implement strategies and technologies that optimize their supply chain. Driving this is a host of emerging worldwide demands, not the least of which is global harmonization of labeling requirements based on a set of voluntary and involuntary regulatory standards

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
485
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Chemical Industry Labeling Wp

  1. 1. Chemical Industry Barcode Labeling Demands, Risks and Implications WHITE PAPER Chemical Industry innovators have been responsible for major product breakthroughs in a wide variety of other industries throughout history. The impact over the years means the pressure today in the Chemical Industry continues to accelerate and innovation has never been greater. Today, most industry sectors still look to the Chemical Industry to drive key product advancements such as improving pharmaceuticals; agricultural yields; making next generation trans- portation systems faster, lighter and more fuel efficient; and improving food flavoring, safety and shelf life. The industry’s contributions span worldwide, while still adding pressure to implement strategies and technologies that optimize chemical supply chains. Driving these emerging worldwide demands has been a long road. The United Nations Conference on Environment and Development in 1992 initiated the idea with continued support and concrete implementation since 2002. Now the industry has seen biyearly regulatory updates, modifications and additions for compliance.
  2. 2. Copyright © Loftware, Inc. All Rights Reserved. All other marks are the property of their respective owners. Chemical Industry Barcode Labeling Demands, Risks and Implications A Loftware White Paper Chemical Industry executives, who are expected to be innovators, must now rise to the challenge of supply chain issues in an evolving global economy and seize competitive opportunities by meeting them quickly. These global changes are forcing enterprise businesses to optimize their ERP, SCM or WMS systems to achieve profitability. One crucial subset of these systems is the product’s label. With barcode labeling software evolving as mission critical applications, large enterprises in every industry (but particularly the Chemical Industry) are looking for ways to standard- ize those applications across multiple locations in their supply chain. The label on a product is synonymous with a product’s identity. Therefore, the correct information on a label sustains a smooth process in the supply chain, providing companies a competitive foothold in the global marketplace where corporate objectives such as brand and product security, supply chain efficiency, regulatory/compliance, business continuity, and customer responsiveness can be enhanced through value-added labeling innovations. Label Demands and Risk Management Every industry has product labeling challenges, but the Chemical Industry stands out as a sector with extraordinary risk management issues. From raw materials and manufacturing facility requirements to end-user delivery, every step of a chemical product’s passage through the supply chain must be planned, known, and implemented without failure. For this sector in particular, mistakes can be disastrous. At the same time, the Chemical Industry also faces many of the same issues associated with less dangerous or toxic substances: counterfeiting, diversion, authentication, regulations and mandates. On top of that, the industry is increasingly characterized by complex supplier/partner relation- ships and multi-layered supply chain models. With the emergence of global data and labeling standards, it is clear that the Chemical Industry must evolve its traditional supply chain and product labeling models to the new realities of label harmonization. Meeting this demand will ultimately provide an all-encompassing solution to the industry’s numerous challenges. OSHA, REACH, and GHS: The Real Implications When a voluntary standards body proposes a voluntary date of compliance, industries can operate in a more flexible atmosphere. Yet. when regula- tory bodies with strong enforcement capabilities mandate new processes and procedures, industries must comply or face the consequences. Global readiness for evolving industry standards includes Global Harmonized System (GHS); Registration, Evaluation, Authorization and Restriction of Chemical substances (REACH); and Occupational Safety and Health Administration (OSHA). Emerging product labeling standards, some even being mandated by governments, can mean the difference between market entry or exclusion. For companies working with supply chain, manufacturing, and distribution partners in multiple countries, compliance with specific regional standards will streamline the supply chain. For example, OSHA’s Hazard Communication Standard (HCS) has implemented a phase-in schedule. Critical future deadlines include December 1, 2013; June 1, 2015; December 1, 2015; and June 1, 2016. More over, June 1, 2015 holds an even greater impact as it corresponds with the European Union (EU) implementation standards and regulations initiative. These are not mere suggestions. They are the baseline requirements for anyone in the Chemical Industry currently doing or planning to do business in Asia, Europe and North America. Failure to comply doesn’t result in a sternly worded letter suggesting that an organization improve its practices. It results in significant regulatory barriers to ongoing business operations. Fines are imposed. Product shipments are halted. Recalls are ordered.
  3. 3. Copyright © Loftware, Inc. All Rights Reserved. All other marks are the property of their respective owners. When this happens, ongoing sales are affected, customers look for alternative sources, investors seek more secure opportunities, and competitors seize the opportunity to reposition themselves. This kind of regulatory scrutiny is bad for business. Period. The question to ask is: If any one or more of these dreadful outcomes can be averted through something as straightforward as compliant labeling, isn’t that a preferred option? Correct Content on a Product Label is Good Business Practice Contemporary labeling technology doesn’t just address the ability to ship products to the right places. It also addresses providing the correct content on the labels. There are two significant ways label usage can go awry. The first is that a label with the correct product information is accidently ap- plied to the wrong product. The second occurs when a label is applied to the correct product, but the label contains inaccurate or incomplete content. Ideally, of course, products with the correct labels and required content go to the right places, customers get the product they ordered, and these products speed through the supply chain and reach their intended destination with less delay. Late delivery penalties are averted. Plus, the potential for re-identifying and re-labeling distribution center product stockpiles are diminished; saving time and cost to operations. So it becomes apparent that understanding and managing correct content labeling is an essential part of a successful business. So how do labeling errors like these occur? Several major factors can cause labeling inefficiences and errors which can impact corporate revenue and market share. A failure to manage any one or more of these risks can jeopardize corporate sustainability at its very core. However, attacking these risks head-on can win a significant competitive corporate advantage. These include: Mislabeling and Related Data Errors The wrong label or a label with incorrect or incomplete data typically sidetracks the product, often in distribution centers, until the problem can be identified and corrected. Inventory carrying costs can soar. How are labels with bad content created? There are several identified internal culprits. First, the organization doesn’t have an enterprise-wide and centrally controlled system for label and content generation in support of every location where labels are applied. This means different plants— even different manufacturing lines—can produce labels locally to a different standard and with different sources of label content. This can be further aggravated when individuals at a remote manufacturing facility are simply not experienced with labeling systems, technology, regulatory compliance issues and/or lack on-site IT support for labeling. This has led many organizations to go to extraordinary measures to overcome the problem, but not in ways that optimize their business or supply chain. For example, one manufacturer facing this issue shipped all of their products made in Asia to the company’s headquarters in Georgia, USA where labels were applied centrally by experienced professionals. Then they re-shipped the product direct to customers and distribution centers. Obviously, the cost of this double transport model was enormous. Another company based on the American East Coast took a different approach: they preprinted labels at their headquarters and flew them, accompanied by corporate representatives, to their manufacturing plant in Puerto Rico. Of course, every time a product changed, corporate developed the new label template, preprinted another batch of labels, and flew another team to and from Puerto Rico once again. The other downside to this approach is that from time to time, batches of preprinted labels in remote locations have a mysteri- ous way of disappearing and can end up on counterfeit product lines. Also, if the old labels are not completely removed from the location, they can be mistakenly applied.
  4. 4. Copyright © Loftware, Inc. All Rights Reserved. All other marks are the property of their respective owners. Specifically related to the Chemical Industry, emerging HCS and Material Safety Data Sheet (MSDS) evolving modications have arose. For U.S. Chemical Industry manufacturers, for example, there are the looming OSHA HCS phase-in deadlines and with the immersion of globel standards, there are additional Safety Data Sheets (SDS) required depending on your location. For instance, there are GHS SDSs, ISO MSDSs, ANSI MSDSs, and the common OSHA MSDSs. Having so many re- quired documents can become cumbersome if the data is not properly managed and populated correctly both on the label and on the regulated Data Sheet, hence the ever importance to be compliant and organized with future and evolving regulations. However, in effect now, even before the deadline, a failure to comply with HCS mandates is one of the top five reasons for fines levied by the regulatory body. Customers who accept delivery of mislabeled product are the chief targets of fines, but whom will that customer blame? A manufacturer can easily lose a valued customer for failure to appropriately label a product. The other major issue is the manufacturer’s ability to provide product labels with the right pictograms, in the right language, and with the right data as prescribed by the country to which the product is being shipped. Requirements vary not only by country, but also by regions within the same country. So, labeling the product accurately and compliantly becomes even more critical. Customer and Regulatory Fines Label production delays due to non-compliance or label errors mean product shipment delays. With customers having agree- ments for timely delivery, delays often translate into monetary penalties. Labels in non-compliance with regulatory authorities can trigger recalls and fines. With the advent of emerging initiatives for global harmonization of product labeling, finding solu- tions for these challenges is more important than ever. The fact is, few Chemical Industry manufacturers miscalculate the time required to manufacture their product in the quantity and to the schedule demanded by a customer. These companies have invested in production, manufacturing and assembly processes, methods, and best practices that enable them to routinely meet internal manufacturing deadlines to meet shipping schedules. Yet, some manufacturers shoot themselves in the foot when they fail to consider the potential for a labeling mishap as part of the scheduling formula. This means that after a period of successful manufacturing of product in volume, to high quality, and in keeping with exacting customer requirements, a last minute unanticipated labeling problem derails the order. Time, money and even customers can be lost as a result. Loss of Business Chronic label problems resulting in delayed shipments, customer fines, or the delivery of the wrong product can turn custom- ers away to seek alternate sources of supply. This can affect market share and brand reputation, as well as margins. When shipping directly to a customer, labeling errors and late deliveries are bad enough. It can be even worse when the manufac- turer is shipping to the customer’s customer. This happens far too often, and when it does, your customer faces a business loss, too—which can result in twice the loss for your company. Labeling inefficiencies can even lead to a loss of new business. This happens when a major potential customer seeks a sup- plier that can label multiple products to product marking requirements set by the customer but maintained and implemented by the manufacturer. Without a robust and reliable labeling system for this process, it is nearly impossible to manage a consolidated set of label templates to serve as standards in compliance with multiple customer requirements. Simply put: if you cannot meet their needs, you will lose their business.
  5. 5. Copyright © Loftware, Inc. All Rights Reserved. All other marks are the property of their respective owners. Label-related Compliance, Potential Recalls and Fines For regulatory authorities, the label on the product is considered a part of the product itself. This means they can impose fees, fines, penalties and recalls on the basis of improper labeling alone. Missing label elements such as molecular weight, formula, storage temperature, name suffix, lot data and translations not only lead to sale loss, but result in heafty fines. Recalls often occur with inaccurate formatting of the wrong font size, illogical serialization, and inaccurate expiration dates. Even if your mis- labeling doesn’t result in large fines, fees and recalls, your shipment may result in a return or even worse, a tarnished brand reputation, which may be hard to mend in the future depending on the severity and market share. Inability to Scale Labeling Operations in Manufacturing, Shipping and Distribution Centers Chemical Industry manufacturers understand the importance of scalability perhaps better than most in other industries. It has always been a factor, but today, more than ever, issues of scalability extend to include supply chain partners and outsourced operations to achieve even greater scalability flexibility, speed, and economy. In fact, according to an Accenture report entitled, “Transforming Business Processes in the Chemical Industry1 ,” the relationship between scalability and outsourcing is specifi- cally spotlighted: Outsourcing is evolving from a pure-cost play into a strategic management tool—sophisticated, well conceived and superbly executed—for optimizing business processes, building global and scalable capabilities, enhanc- ing competitive strength and refocusing on the core business and on customers. As chemical companies drive to achieve high performance, they will increasingly implement business process outsourcing. To design transition and successfully implement outsourcing on a global scale, companies will want to consider tapping into the experience, scale and strategic focus that a third-party supplier can provide. The responsibility of an outsourcing provider is to deliver leaner, faster, more robust processes, cost-effectively, through both process design and improvement. Increased outsourcing forces enterprise companies to create a labeling system that not only scales to internal operations but that scales out to supply chain partners. This achieves labeling consistency, speed, flexibility, fewer errors, and the use of a common product marketing language and methodology. In today’s Chemical Industry supply chain, these are the core areas most manufacturers examine for value-added opportuni- ties and improved economies of scale. When labeling inefficiencies, such as improper load dividing or redundant relabeling slow operations down, the bottom line suffers. Scaling internally and externally creates a streamlined, cost-effective process. Absence of Track and Traceability Solutions One of the reasons a major product recall produces such dreadful results relates to how long it can take to identify and find the product and complete a recall cycle. Contemporary track and traceability labeling solutions speed the process, thereby minimizing costs as well as the potential downfall of a company’s reputation in the marketplace. The Chemical Industry has been aware of this need for years. Clearly, a track and trace system that can follow materials from one end of the chemical supply chain to the other, from raw materials to finished product, needs a single source of truth. A centrally driven enterprise capacity that uses core business applications will keep the process transparent and effective. 1 Transforming Business Processes in the Chemical Industry: http://tinyurl.com/3cjqb3c
  6. 6. Copyright © Loftware, Inc. All Rights Reserved. All other marks are the property of their respective owners. Summary: The Strategic Opportunity in Improving Your Labeling Systems Once considered a mere tactical necessity, contemporary Chemical Industry product labeling solutions can have major strategic implications. As noted in this white paper, there are major negative corporate outcomes that can result from product labeling errors and inefficiencies. Avoiding these issues is no longer a matter of fixing one label at a time or refitting one product facility at a time with silo or purpose-driven systems. For labeling to be a core component of a manufacturer’s strategic mission, labeling must be integrated with core manufacturing applications and data. The solution can’t be found in a patchwork of more systems and different systems, but in less and fewer disparities and incompatibilities. Chemical Industry manu- facturers of all sizes and scope can consolidate centralized labeling systems tied to overall corporate objectives and opportunities. Enterprise-wide implementation, integrated with core applications and data, bring into alliance the parallel goals of corporate growth and marketplace efficiency with labeling accuracy and velocity. And, at a time when regulatory scrutiny and standards initiatives worldwide have never been more active, the time for more labeling accuracy, security and flexibility has never been greater. About Loftware Loftware, Inc. is the global market leader in Enterprise Labeling Solutions with more than 5,000 customers in over 100 countries. Offering the industry’s most comprehensive labeling solution, Loftware’s enterprise software integrates SAP® , Oracle® and other enterprise applications to produce mission-critical barcode labels, documents, and RFID Smart tags across the supply chain. Loftware’s design, native print, and built-in business rules functionality drives topline revenue, increases customer satisfaction, and maximizes supply chain efficiency for customers. With over 25 years of industry leadership, Loftware’s enterprise labeling solutions and best practices enable leading companies to meet their customer-specific and regulatory requirements with unprecedented speed and agility. Learn more about Loftware by visiting www.loftware.com.

×