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What to do when your customer insists on bar coded labels.

At a recent seminar about the use of bar codes, several managers from manufacturing companies as well as distributors were grumbling about a letter they had recently received from a major customer.

The letter was fairly straightforward -- all orders shipped to the customer would soon have to be marked with a bar coded label. Failure to comply by a specific date meant no more orders.

Although the letter was quite specific about the look and size of the bar coded label required, not a single manager was sure about what to do after this one-day seminar on bar code basics.

To make matters worse, most of the managers thought this was a one-sided deal that only benefited their customer. They also wondered why they had been singled out to meet this new demand.

During the lunch break, an automatic data collection consultant who overheard this discussion helped to put in perspective "compliance labeling," as these projects are commonly called.

He explained that thousands of letters had already gone out from companies, many of which are major retailers. Furthermore, an estimated 50,000 additional companies will be sending letters during the next few years. In other words, compliance labeling is a more than likely reality for manufacturers and distributors alike.

To ensure that compliance occurs quickly, companies are typically setting deadlines of a few months to one year. Voluntary compliance had proven to be a long, drawn-out event for those companies that had tried it.

The benefits of labeling

The ultimate goal, explained the consultant, is to reduce costs and streamline the flow of accurate information about inventory as it moves through the supply pipeline. In the end, more of the right inventory will get to its destination on schedule.

As the managers had heard at the morning session of that day's seminar, bar codes help to reduce picking and shipping errors, ensuring that orders are filled accurately. While reducing the number of inaccurate shipments and irritated customers, bar code labeling also slashes the cost of correcting and reshipping goods to successfully complete an order. In other words, compliance labeling delivers benefits to customers and suppliers alike.

By the time lunch was over, most of the managers had a somewhat more tempered perspective on the value to them (beyond keeping a major customer) of compliance labeling. Nevertheless, compliance labeling still looked more like a bad medicine than an acceptable cure for inventory problems.

Getting help

To help managers work through a compliance labeling project, the following article was developed. Some of the information is taken from a recently published book, Compliance Labeling...How to do it. The book is available from the author, Scott Cardais of the automatic data collection consulting firm Quad II in Charlotte, N.C.

This article focuses on how to survive a compliance labeling project and turn it into an operating asset at your company. Because many prominent retailers are actively promoting compliance labeling these days, the label examples used are typically required of manufacturers and distributors that sell to those chains.

At the end of this article is a quiz. To prepare for certification or earn credits toward recertification, send the completed quiz to the Materials Handling and Management Society, Charlotte, N.C. Complete details are printed on the top of the quiz. Hopefully, this will prepare you and your company for the compliance labeling project sure to come your way.

Understanding what your customer wants

Getting started with compliance labeling requires a clear understanding of what it is that your customer wants done. Unfortunately, there is a virtual encyclopedia of possibilities depending on specific industry needs, accepted standards, and your customer's approach to labeling and information management.

Two early steps will help you to make sense of your customer's requirements. First, break down the components that are included in the specification. This will help you to understand what information is required on the label. Then compare these to accepted industry standards to ensure that your customer's request squares with common practice.

It is equally important to understand the value of that information to your customer and how that data will be processed and used.

This portion of a compliance labeling project should be conducted by a team consisting of people from several different departments and disciplines at your facility. Tips about forming the team and seeing the project through other milestones are detailed in the next section of this article.

Seven label requirements to watch carefully are:

* The number(s) that should appear on the label/item,

* What data should be printed in human readable form,

* What data should be in bar code form,

* What bar code symbologies (languages) are acceptable,

* The range of acceptable label sizes,

* How the human readable and bar codes should be arranged on the label/item, and

* Where the label should be placed on the item/shipping container.

From retailers to automotive and heating/air conditioning/refrigeration manufacturers, most major industries have adopted bar code labeling guidelines. Nevertheless, there are still companies that create home-brew versions. That's where industry standards work for you.

The role of standards is two-fold. On the one hand, they are written to include as much frequently needed data as possible on a label. At the same time, standards limit the number of label variations that any supplier or customer would have to print.

Be sure to check the specification from your customer against the labeling standard adopted by the appropriate trade association. If the standards do not coincide with the specification, explore with your customer how the two can be reconciled.

What labels do

If your customer is a major retail chain, there are three distinct labels, one for individual items and two for shipping containers, that could be part of the specification. All three labels are included in industry standards but are required in different combinations depending on the information needs of individual retailers. The Uniform Code Council in Dayton, Ohio, coordinates the assignment of many of the key numbers included in these labels.

The simplest of the three labels, the Universal Product Code (U.P.C.) number, uses 12 digits to identify the manufacturer and the product. The label usually consists of the U.P.C. number in human readable form below a corresponding bar code, and is attached to individual items.

Adding two digits in front of the 12-digit U.P.C. number creates the 14-digit shipping container label that identifies the specific quantity of a specific product in a shipping container. For instance, one code might identify a container with six, quart-size bottles of mouthwash while another might identify a container with twelve, quart-size bottles of the same mouthwash product.

The shipping container label is typically scanned at your customer's receiving dock to confirm a manifest. It can then be used to track full cartons through the customer's distribution process; however, this label does not distinguish between individual cartons containing the same product and quantity. The U.P.C. number, on the other hand, does not usually become important until items are picked for broken-case order fulfillment or until a full case of items is put on a retailer's shelves.

A third commonly used label combines a 20-digit bar code symbol that references the contents of an individual carton to a central data file. Other important shipping and order information is presented in human readable form.

The 20-digit bar code symbol includes standard information-manufacturer identification, plus a packaging-type code--as well as a unique nine-digit shipping container serial number. This allows both the manufacturer and customer to identify each individual carton in a shipment.

In addition to being scanned at the receiving dock of your customer, the 20-digit bar code symbol is often used to transmit shipment information in advance by electronic data interchange (EDI). This computer-to-computer exchange of information tells your customer what to expect in the next shipment before the cartons ever physically leave your shipping dock.

Once cartons arrive at your customer's location, any returns or other exchanges can be managed on an individual carton basis. That means carton 127 can be singled out from the shipment rather than just any carton containing a designated product. Additionally, the serial shipping container label allows your customer to store specific cartons in specific locations at a distribution center and then ship each to a specific retail outlet.

Organizing the project and the team

Central to the success of any compliance labeling project is a team of experienced people from several different departments and disciplines at your company. Representatives from every department affected--from the shipping dock to the computer department--should be included.

The majority of people on the project team will focus on the mechanics of developing workable procedures to print and apply labels required by your customer's specific mandate. There are, however, three members who carry broader responsibilities and should always be on the team.

The project leader has overall responsibility for the successful implementation of the new bar code system and how it ties into the company's current information system. In addition to being dedicated to the project, the leader should have a clear mandate from senior management to make compliance labeling a success.

One person from senior management should also be an active member of the team. Without such direct intervention by one senior manager, the chances of success are not as strong.

The third member with broad responsibilities should be the company's bar code coordinator. This person is appointed by senior management and is dedicated to coordination of all bar code projects. All communication between customers requiring labeling and your company should be the responsibility of the bar code coordinator.

After forming the team and understanding the specification (see previous section of this article), there are four additional steps to completion of the project:

* Prepare the information system to supply the right data,

* Decide how the labels will be printed and applied and select the best equipment,

* Install the equipment, test for the full range of labeling requirements, and modify as needed, and

* Make labeling a routine part of shipping products.

To work through the project, the team should meet regularly to monitor progress through milestones developed at early meetings. Progress reports should document for all involved who is working on what and where each assignment stands in relation to its target timetable.

The information system

In all likelihood, your company's current information system is not ready to immediately supply data in the form that your customer wants.

For instance, your company may not identify products with Universal Product Code (U.P.C.) numbers or another numbering scheme preferred by your customer. New requirements do not necessarily mean abandoning systems already in place; however, they may require cross-referencing the new and the old. Ultimately, this development will affect a wide range of activities at your company including order entry, order picking, inventory adjustments, shipping verification, and invoicing.

Additionally, the MIS department may not yet transfer shipment information to customers by electronic data interchange (EDI). By its very nature, EDI (the computer-to-computer exchange of information that travels parallel to bar code labels on cartons) necessitates a closeness between supplier and customer.

Accommodating these new requirements will certainly place new demands on how the MIS department processes and communicates information. Software may have to be written or purchased, and other controls put in place to manage the flow of information. Your company can then proceed with deciding how to print and apply labels.

Getting ready to label

Where labels will be printed is usually the first decision at this stage.

If you can give an off-site label printer a few days notice for long runs of labels carrying pre-determined data, your company might want to avoid the up-front investment in bar code printers, related software, and personnel. On the other hand, many companies require the flexibility gained with on-site printing of labels.

When considering on-site printing, it is most important to select printer technology and software that will technically and economically accommodate the design of labels that meet your customer's specification.

The table in this section details printer technologies often considered and their specific capabilities. Factors to consider when selecting bar code printing software include:

* The computer platform and operating system that the software must run on,

* Simplicity, speed, and flexibility of label design and generation,

* Data base management capabilities, and

* Variety of bar codes it can print and number of printers that it can drive. Depending on your company's needs, each factor will carry a different weight in the final decision.

There is no chance of overstating the importance of the print quality of finished labels. Many companies impose a financial penalty and may even reject receipt of an entire shipment if the bar code labels cannot be read at the dock.

While bar code quality entails several technical measures, a bar code verifier can instantly determine if labels will be readable by your customer. Considering the penalties for unreadable bar codes, verifiers should be considered a necessary piece of equipment. See the box in this section for a list of other ways that a label can be out of spec.

Beyond printers, software, and verifiers, the project team will have to decide the physical location of printing stations. How and where the labels will be applied must be determined too.

From startup to routine

After making its hardware and software selections and placing orders with vendors, the project team is faced with making it all work. This is where good preparation pays off.

The company's central database should be able to feed critical part numbers and other essential data directly into the label printing system. In turn, the printing system should be able to pass specific shipment information printed on labels back up to the central database for community cation by EDI or other specified technique to your customer.

During this startup phase, it is also important to submit printed bar code labels to your customer for written approval. Any modifications needed should be made immediately.

Once your labels pass, it is up to the people assigned to your printing operation to duplicate that level of quality and accuracy on a day-to-day basis. The same holds for placement of the label in the right place on the shipping container.

As a final step in the compliance labeling project, develop and implement quality control procedures that will make it routine to meet your customer's specification. All of the pain should have passed by this point.

Three labels often required by retailers

Universal Product Code number

The first six digits in the Universal Product Code (U.P.C.) number are the manufacturer's unique identification number. The next five digits are the specific product identification number. The final number is a calculated check digit that confirms the first two numbers are correct.

Shipping container code

The 14-digit shipping container code begins with a two-digit identification number that describes the size (64 oz., for instance) and quantity (4) of items in the container. The manufacturer's identification number is made up of the next six digits followed by five digits for the product identification number. At the end of the code, a final check digit confirms the previous numbers and ensures that the information was handled correctly.

Serial shipping container code label

The label most likely to appear on the outside of shipping containers for quite some time into the future is the serial shipping container code label. It frequently contains human readable information including from/to addresses, shipping data, and even purchase order information. The zip code is also expressed in a bar code symbol for shippers.

The large bar code across the bottom of the label supplies several pieces of data including the type of package (carton, pallet, container larger than pallet, for instance) and the manufacturer's identification. In addition, a nine-digit shipping container serial number identifies the specific contents of the container and includes a serial number for that container.

Don't be out of spec

There are several ways that you can print or apply a bar coded label that looks good but isn't. A label is out of spec if...

A bar code scanner can't read the symbol because the widths are wrong or the contrast between bars and spaces is insufficient.

The bar code is printed correctly but the human readable data beneath it doesn't match.

The bar code and the human readable information match but they are applied to the wrong item or carton.

The label is on the right item but was placed improperly on the item or carton.

The label materials don't hold up to heat, humidity, abrasion or other environmental conditions and the label falls off.
COPYRIGHT 1993 Peerless Media, LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
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Title Annotation:includes mail-in exam
Author:Forger, Gary
Publication:Modern Materials Handling
Date:May 1, 1993
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