Labeling Issues Cost Manufacturers Worldwide More Than $1.31 Million Each Year From Production Line Shutdowns, NiceLabel Study Finds
US manufacturers lose more than $1.17M each year on average
US manufacturers on average incur losses of around $1,174,000 per year due to production line shutdowns caused by label printing problems, a global study of IT directors in manufacturing organizations has revealed. This is slightly below the global average, with many companies losing more than $1.31M each year.
The study of 300 IT directors globally, including 100 from the US, found that on average more than two-thirds of manufacturers (67%) were having to shut down their production line for more than an hour if there was a problem with label printing, with an additional 21% saying the line had to be shut down for more than 30 minutes. Recovery time was slightly faster but still problematic for US manufacturers, with just over half (51%) experiencing downtimes of 60 minutes or longer.
The study also revealed that manufacturers – both globally and in the US – were having to pause production lines just under six times a year on average due to such problems, with nearly three-quarters (77% globally and 69% in the US) saying their production line had to be paused four times or more in the past year as a consequence of labeling issues.
Ken Moir, VP Marketing, NiceLabel, said: “Any business disruption or shutdown can significantly impact any manufacturer causing loss of revenues and ultimately even putting the business itself in jeopardy. The danger of that being caused by mislabeling becomes a growing concern as labeling becomes a key part of business and supply chain strategy.”
Given the losses they are incurring due to shutdowns, it is unsurprising that 29% of the US survey sample see ‘reducing costs’ and 22% see productivity gains among the main benefits of modernizing/automating their manufacturing processes, including labeling, with technology, while 31% reference ‘eliminating errors’ as a key driver.
As Moir explains: “Ultimately, the risks to production operations extend well beyond full shutdowns. Decentralized labeling for example, also adds risk to production operations. An ERP system is supposed to provide “a single source of truth” to business users. However, at many organizations there are as many versions of the truth as there are labeling locations. That is because in decentralized labeling operations, each facility may not be integrated with ERP and will be creating their own label formats and duplicated product and customer data.
“After all, without centralization,” continues Moir, “manufacturers are generally not integrated to the same source of truth and that creates redundancies of data – making enterprise-wide updates unmanageable and adding significantly to inaccuracies and inconsistencies.”