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Taking the Complexity Out of Customization



Firms that harness coding technology to customize standard primary packaging with unit or batch-specific information or to print high resolution, dynamic bar codes on secondary packaging see coding in a whole new light



By Ondrej Kruk, Business Unit Manager Label Print Apply and Large Character Marking, Videojet Technologies



Published April 17, 2014
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Taking the Complexity Out of Customization
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Customization of packaging has swept the Fast-Moving Consumer Goods (FMCG) industries in recent years, driven by globalization of markets, more stringent regulatory and retailer traceability requirements, shorter production runs and an increase in consumer demand for targeted, personalized products. Initially limited largely to primary packs, customization is now spreading into secondary packaging as retailers across multiple industries look to streamline operations by extending production information to outer cases and cartons.

In the pharmaceutical industry, the proliferation of counterfeit drugs entering into the global marketplace has driven the need for customization solutions. In 2013, the European Union’s (EU) Falsified Medicines Directive (FMD) mandated individual pack serialization and in the US, California will mandate unit-level serialization as of January 2015. In response to this, it has been reported that manufacturers are exerting pressure on the Food and Drug Administration (FDA) to set up a single, national, drug tracking standard rather than having to comply with California’s e-Pedigree standard.

Likewise, by granting the FDA the authority to issue recalls, the Food Safety Modernization Act (FSMA) has sharpened the US food industry’s focus on traceability. In Europe, the highly publicized scandal that a wide range of beef products were adulterated with horse meat exerted greater pressure on manufacturers of ready to eat meals and meat products to provide more information on their meat suppliers. In response, retailers are asking food manufacturers to include an increasing amount of traceability data on-pack, with producers of perishable products such as meat, eggs and juices taking the lead.

In the cosmetics and personal care industries, customized packaging may be less about traceability and more about meeting consumer demand for a broad range of product variations to better suit their individual preferences. Manufacturers may need the ability to release a single lipstick in 70 shades, each requiring its own package with unique variable data such as Universal Product Code (UPC) code or color name, or to produce limited release items to capitalize on holidays - all while maintaining the unique aesthetics that give them a competitive edge on the store shelf.

Customization Challenges
From a practical perspective, customization can be both complex and costly. Traditionally, the majority of customized information is pre-printed onto labels or packaging materials. As SKUs or stock keeping units proliferate, more packaging materials need to be managed and stored, creating waste and complexity while increasing the cost of warehousing.

This increase in SKUs also makes it more difficult for manufacturers to match supply and demand. Manufacturers holding significant amounts of inventory face the added risk that lines will be discontinued or packaging redesigned, rendering pre-printed materials useless and increasing waste. Managing pre-printed packaging is a complex endeavour that requires working with packaging converters to provide branding or other pre-printed information for multiple SKUs and switching package materials every batch changeover. These activities are time consuming and heighten the risk of mislabeled products entering the supply chain.

Late Stage Customization
The pharmaceutical industry is leading the way in the adoption of late stage customization, partly because regulatory requirements governing packaging, such as serialization, have driven the need for overprinting solutions. Products are often destined for overseas markets, and therefore include different language variants and specific market information such as product names and licence numbers – all data that can be added directly on the packaging line along with 2D codes. Manufacturers can take advantage of a range of coding solutions, from thermal inkjet and continuous inkjet printing, to thermal transfer overprinting and laser technology designed to offer high precision labeling at high speeds, even for small packs and individual components.

The cosmetics and personal care industry has embraced late stage customization as well. Here, for example, rather than pre-printing 50 different carton designs for each shade of hair dye in a manufacturer’s range, one design can be pre-printed and product specific information such as UPC and colour names can be overprinted, along with dates, lot codes and production data. This eliminates the need to replace or change packages during changeovers for each product variant, improving the ratio of set-up time to running time. By reducing the number of packaging SKUs used, manufacturers can maintain fewer inventories, saving on floor space and increasing the ability to benefit from bulk discounts for packaging.

Customization Catches on in Case and Carton Coding Packaging
Having taken hold in primary product packaging, some major retailers have driven the customization trend in case and carton packaging. Historically, it was considered sufficient to include just a global trade number ITF-14 barcode – which simply identifies the product – on an outer case. Increasingly, however, retailers require that manufacturers also provide shelf-life information and traceability data via a GS1-128 barcode.

In the U.S., Walmart requires inclusion of real-time production data on outer cases, while in Europe, hypermarket giant Leclerc has mandated its suppliers meet more stringent traceability standards on all secondary packaging starting in 2014. Suppliers to the French retailer will need to code both primary and secondary packaging with dynamic manufacturing information. With this precedent set, it is expected that other retailers will soon follow suit.

Secondary packaging customization will require manufacturers to print bar code information at the point of packing their product rather than being pre-printed by the case manufacturer. There are two ways of doing this: via direct to case inkjet printing with Large Character Marking (LCM) or by Print and Apply Labeling machines (LPA). In addition to enabling manufacturers to satisfy retailer requirements for traceability data, customizing cases in this way can enhance supply chain efficiency and enable product to be tracked throughout the distribution network. Warehouse economics are also improved by applying codes on-line by eliminating the need to store pre-printed cases.

Inkjet or Labels?
The decision as to which technology is most suited to secondary packaging customization depends on three key factors including the application and barcode requirements, as well as total cost of ownership.

Direct to case inkjet printing is a proven method to customise standard corrugate cases. Current inkjet equipment can print logos, graphics, large and small text and a wide range of linear and 2D bar codes, including the increasingly popular GS1-128 bar code. Inkjet printers require a smooth belt, well-controlled material handling system for optimal print quality and are typically used on porous substrates that will absorb printed ink.

In comparison, print and apply labeling machines can be used on both porous and non-porous substrates, including shrink-wrap, making it the technology of choice for private label manufacturers and co-packers who need greater flexibility as they switch between corrugated and shrink-wrap from one production run or retail customer to the next. With labeling machines, it is less crucial to have precise control over the pack, as machines can apply labels to cases being transported on a roller conveyor.

For supply chain integrity, barcode scannability is the most important criterion. Inkjet as well as print and apply labelers can deliver scannable barcodes. In addition, both solutions can print barcodes according to GS1 standards, depending on the application specifics.

For applications on brown or colored substrates where GS1 grades of C or higher are required (e.g. for compliance with retailer demands) print and apply labeling is the preferred solution, as printing black ink on a white label results in greater contrast than is achievable by printing directly onto the case.

While cost is an important consideration, it is important that the application and barcode requirements be reviewed first, as these can position inkjet or print and apply labelers as the preferred solution. Cost analysis is beneficial in situations where both solutions can be used. In such instances, the key considerations are as follows:

For inkjet, the key aspects to understand are:
• Capital investment
• Ink cost
• Maintenance cost including spare parts

For print and apply labelers, the key aspects to understand are:
• Capital investment
• Label and ribbon cost
• Downtime and changeover cost
• Maintenance cost including spare parts

Verification and Validation
It is not enough simply to print the right information onto secondary packaging. Manufacturers often need to deploy on-line inspections using barcode reading equipment to validate that the barcodes will be readable throughout the distribution chain. This process will ameliorate the risk of unreadable codes leading to a single case failing a coding check after leaving the manufacturer, resulting in an entire consignment of goods to be rejected.

Conclusion
While printers are widely deployed for printing dates, barcodes and lot codes, awareness of their ability to add value through customization is still limited. However, firms that harness coding technology to customize standard primary packaging with unit or batch-specific information or to print high resolution, dynamic bar codes on secondary packaging see coding in a whole new light. These firms often view customized coding not as a cost, but as an investment that returns quicker changeovers, less pre-printed packaging inventory and more flexible manufacturing.

About the Author:
Ondrej Kruk is a business unit manager at Videojet Technologies. His main responsibility at the company is the global commercial leadership of the Print and Apply Labeling (LPA), Large Character Marking (LCM), and software business units. Kruk has 10 years of business experience, four of them in the product identification and digital printing industry. In his previous role, as global manager of the Product Decoration Business at Videojet, Kruk was able to turn a North American business unit into a global business by leveraging the capabilities of an industrial technology to revitalize a product category in the consumer goods market. Prior to Videojet, he was an associate at A.T. Kearney, a global management consulting firm.


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