More Than 10% of Goods Mislabeled Every Year, Say 76% of Manufacturers

More than three-quarters (76%) of IT directors in manufacturing across the US, UK, Germany, and France admit that more than 10% of their organization’s goods are labeled incorrectly every year.

This rises to more than 25% of goods for over a quarter (26%) of organizations globally and nearly 1 in 5 (18%) in the US. These findings come from new research commissioned by NiceLabel and carried out by Loftware, which polled 300 IT directors globally, with 100 from the US, working for manufacturers across a range of sectors, including retail, pharmaceutical, food and beverage, automotive, medical device and chemicals.

IT directors say incorrect labeling costs their organizations on average $89,000 annually, with 61% globally and 47% in the US saying their organization incurred losses amounting to more than $69,000 from mislabeling 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, minimizing errors that lead to a need to relabel products is the second biggest challenge manufacturers worldwide face in getting new label designs into production, cited by 35% of all respondents. The only challenge more pressing was extending the labeling process seamlessly across the wider supply chain, as noted by 38% of the global sample. While these issues were also top of mind in the US (30% and 37% respectively), American manufacturers reported that meeting regulatory compliance (38%) was their greatest challenge, followed closely by reducing time to market (37%).

Given this, it is unsurprising that 29% of US manufacturers (26% worldwide) see ‘reducing costs’ and 22% in the US (18% worldwide) see productivity gains among the main benefits of modernizing and automating their processes, including labeling, with technology.

Highlighting the costs that labeling errors can bring, Ken Moir, VP Marketing, NiceLabel, said: “Mislabeling 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 minimize waste and reduce resource usage, organizations can advance their operational performance and sustainability goals by reducing mislabeling. The key will be a system and tools that allow centralized control of label design and printing across multiple sites.”

“Correct labeling 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-labeling upon receipt. The solution is to extend labeling to those suppliers to ensure they are using the correct templates and content to eliminate the need for costly and time-consuming re-labeling.”

“At a time when supply chains are changing rapidly and becoming increasingly complex, mislabeling is an all-too-frequent pain point that can simply halt production,” said Josh Roffman, VP Global Product Management, Loftware in an interview with SCMR.

He added that struggling with issues like redundant data sources and fragmented labeling systems and approaches, many even budget millions annually to reprint corrected labels and manage added expenses, like lost productivity, extra labor requirements and potential fines from missed deadlines.

“One of the best first steps to prevent mislabeling is to adopt a standard, centralized approach to labeling across an enterprise. This also has the added benefit of reducing costs and improving productivity via tools like label management systems that digitally transform labeling and artwork management,” concluded Roffman.

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