Just when it was starting to feel like the economy was finally getting back to something resembling normal, the global supply chain has been hit with unprecedented volatility. Prices for nearly everything are rising, all kinds of raw materials are in short supply, and lead times are getting longer and longer.
Unfortunately, label printers are not immune to supply chain volatility, which can create serious delays in your production if not properly managed.
What’s going on? And more importantly, how can your business and your label printer work together to mitigate the current supply chain volatility (and any volatility that may arise in the future)?
What is Happening in the Label and Packaging Supply Chain Right Now
A “perfect storm” scenario has descended on the global supply chain:
- The COVID-19 pandemic has flared up again in several hot spots around the world, driven by a highly transmissible new variant. Asia – the source of so many global exports – has been hit particularly hard. China partially closed one of the world’s largest shipping ports recently due to COVID, and factories throughout Southeast Asia are being put on pause.
- Skyrocketing demand for raw materials has sent prices into the stratosphere.
- Manufacturers are struggling to return to full capacity in the wake of pandemic-related shutdowns and are falling behind demand.
- Shipping costs are surging with no downturn on the horizon.
- Extreme weather is taking its toll on production and shipping.
The thing about the global supply chain is it’s just that: a chain. Delays or shortfalls at one step in the process can cause problems all the way down the line. And there’s not always much a manufacturer can do to speed up a sluggish supply chain.
The current supply chain volatility has impacted label printers significantly. Competition for a limited supply of raw materials – such as polypropylene – has sparked price increases of 10% to 18% or more.
Label printers have been forced to extend their lead times and, in some cases, increase their prices, frustrating customers who have become accustomed to certain schedules and costs.
Here at The Label Printers, we too have experienced challenges in maintaining our usual “safety stock” of materials. And from what we’ve heard around the industry, we know we are not the only label manufacturer in this boat.
Working With Your Label Printer to Mitigate Supply Chain Volatility
As we said, the global supply chain is a vast interconnected system. Your label printer will not be able to magically summon up materials that are simply not available right now – but that doesn’t mean you should have to postpone your production schedule and disappoint your customers all for the lack of a label.
By keeping the lines of communication open, considering alternatives and planning ahead, you and your label printer can work together to ensure you have the labels you need when you need them – regardless of the state of the world economy.
Here are three crucial strategies for overcoming supply chain volatility when ordering labels:
1. Qualify Alternative Materials
In business, it’s always a good idea to keep a Plan B in your back pocket. You may never use your backup plan, but should something go awry, you’ll be glad not to have to scramble at the last minute for a solution.
In label printing, your backup plan can consist of alternative label components. Your label printer can help you research and test materials and adhesives to discover a selection of options that fit your application. Should your first choices be unavailable or prohibitively expensive, your label printer will have options to fulfill you label demands.
It is not always easy to qualify an alternative material; considerations include:
- Impact to price: Ideally, alternative materials will cost the same or less than your first preferences, but that’s not always possible.
- What is your company’s internal process for qualifying new material? How long does it take, and how much will it cost?
2. Get Your Orders in Early
Lately, the joke going around The Label Printers is we should make t-shirts that read, “Have you ordered your labels yet?”
In times of great uncertainty (and honestly, pretty much anytime), the earlier you secure your place in line with your label printer, the smoother your experience will be.
Of course, we recognize that it’s not always possible to predict your label needs several months down the road. Factors such as market demand, artwork changes, and your company’s own supply chain issues determine your label requirements – and these factors are not easy to anticipate.
3. Choose a Label Printer That is Proactive Rather Than Reactive
While it’s not typically this bad, supply chain volatility is a fact of doing business. If you’re encountering longer lead times and higher-than-expected prices from your label printer, the explanation shouldn’t be a mystery. Your label printer should be open about their supply chain issues and realistic about offering solutions.
Too often, supply chain problems are taken as a given because everyone experiences them at the same time. But as we’ve explained in this article, “Nothing can be done” is not an acceptable excuse. An experienced label printer will help your business prepare for material shortages and will help you formulate creative strategies to overcome shortages when they occur.
Don’t get caught flat-footed the next time the global supply chain gets tangled up by a crisis. Talk to the experts at The Label Printers today about minimizing the effect of supply chain volatility on your label printing plans.
