The Top 3 hidden costs in a label business:
Label Traxx Business Development Manager Chris Spooner outlines how label converters can make savings:
- Excessive raw materials
Do you know exactly how much labelstock you have on the shop floor and how much you will need to fulfil your pipeline? Just in time deliveries mean that for most standard materials you can buy to fulfil your orders and you don’t need to keep “just in case” rolls. Make sure you have a roll tracking system. Your MIS system should tell you your material requirements, what you have in stock and what you need to order. Inventory levels will update in real time as rolls of material are scanned as used on jobs. Having a trusted system will enable you to minimise your stockholding.
And do you track the ageing of your roll inventory? Clear labelling and good working practice will ensure that oldest rolls are used first in production. Your MIS should be able to identify any ageing rolls. The goal should be to use rolls before they have expired past the manufacturer’s use by date. No waste – no cost.
- Bad admin
Companies that lack workflow integration on the administration side leak profits. Do you use multiple software applications to get a job from estimating, through production and into accounting? Do people have to re-type the same data into different systems? Once you have estimated a job, you shouldn’t have to enter those job details again once it becomes an order. The spec info should pull to the order, production instructions, purchase orders, packing slip and invoice. Re-entry of data and islands of information waste time and also hugely increase the risk of errors. And don’t get me started on employees who keep their own offline proprietary spreadsheets to keep the jobs flowing smoothly… Give your employees the tools – or even better a single tool – to streamline your workflow and increase productivity.
- Finished goods inventory
Do you manufacture overs or finished goods for customers that are not paid for? This is a direct cost to your business. Do you have a guarantee that they will be bought? If your customer hasn’t asked for them and given you a purchase order for them, then they effectively they have no sales value. You have wasted time on press that could have been used for billable work. It is just another cost to your business.
If you do hold finished goods for customers, make sure you track the ageing of batches that move into stock. Act on the agreements that you have with your customers. Track their days to expiration and once they go over, then ship and bill the customer for them. Your MIS should help with this. Be proactive and manage it.
Label Traxx MIS can help you manage all of the aspects above. Contact us now to arrange a demo and discussion of how we can help your business.