We stumbled on something very interesting here at SCDigest and Distribution Digest with regard to the creeping changes in retail carton labeling requirements.
I won’t repeat the details here: you can find them in Dan Gilmore’s column and the interesting supply chain video discussion he and I had on this topic.
Clearly, this should be something consumer goods vendors pay attention to, as it could add greatly to their costs and operational complexity.
Part of the reason it could add to costs, as we note, is that these requirements could make it a lot less attractive to automate distribution center processes. In fact, that’s in part how we got onto this story. As we were doing some in-depth interviews with logistics executives for our upcoming report on automated case picking, we spoke with one logistics VP who said that the changes they had already seen were causing them to leave as much as 30% of their volume outside an automated system they have implemented.
That dovetailed with some discussions we had had last year and repeated a few weeks ago with another manufacturer facing these challenges. Its executive is concerned an existing mechanized system it has will eventually become impractical due to mandates to leave all bar codes off the box other than the retailer’s UCC128 label (bar codes which drive their system), and increasingly variable requirements about where that label is placed for different retailers.
If the trend continues, it could mean some existing systems will no longer work as designed – and that new ones would be avoided because they can’t provide something as simple as labeling flexibility.
That would be a shame, because of the potential productivity losses, and also be ironic, because the first waves of retail compliance clearly spurred adoption of many automated systems and accompanying WMS software to deal with the requirements.