A Graphic Argument for RFID Labels

By Ken Rohleder



The Challenge




The Solution


Ink and the Environment


One environmental solution is to limit kraft shippers to black ink. However, Wal-Mart and Target both require color coding for some products, and most CPG manufacturers have their brand identity printed according to their own graphic requirements, which often necessitates a specific Pantone ink color.

Consequently, to reduce clean-up time, plants that make corrugated cardboard boxes often schedule their flexo presses to run lighter inks in the morning and progressively darker colors throughout the day. This practice makes it difficult and costly to interrupt the production schedule with a hot order, since the ink color will invariably be different than the one already in the press, so CPG suppliers must carry larger inventories to buffer against the longer lead times.

Resistance to Change

Given the complexity, environmental impact and production constraints that direct printing creates, why haven't manufacturers changed to a label system? At first blush, the cost of a pressure-sensitive label might appear to be more than the incremental cost of direct-printing the box. However, when the effects of SKU consolidation, inventory reduction and the lessening of shrinkage and obsolescence are all factored in, labeling is always more cost-effective than buying preprinted boxes. It also creates greater flexibility for both the corrugated box supplier and the product manufacturer.

Furthermore, not every retail mandate can be met with a label. Technology exists to label a single corner (two adjacent sides) of virtually any size box in-line during the case-packing process. If the retail mandate requires graphics on all four sides of a box, a label becomes prohibitively expensive to apply. However, applying a label to two adjacent sides of a box allows for the identification to appear on all four sides of a pallet of boxes, and handling protocols could be instituted, dictating that boxes always be placed with the label visible.

A white label applied to a kraft box focuses the attention of the distribution channel worker to the data he or she needs. The benefits of printing on a bright white background generally outweigh those of printing all four sides. UPS and FedEx, for example, use white label stock and only imprint one side of each box.

Enabling RFID

Manufacturers are reluctant to commit to label technology for fear that Wal-Mart and Target will choose not to accept labeled cartons, either now or in the future. However, manufacturers with labeling capability will be in the unique position to apply and encode RFID tags, as technology is commercially available today for printing an RFID label, attaching it and programming its tag during the case-packing operation.

If RFID tags are applied to the corrugated cases by box makers (as many in the corrugated industry have suggested they be) RFID will further explode the complexity and cost of corrugated container requirements by adding yet another layer of packaging cost. With a labeling protocol, however, RFID could actually simplify corrugated requirements if Wal-Mart and Target encouraged labeling instead of direct printing. The corrugated savings derived from the simpler system would be an attractive offset to the cost of RFID compliance.

Ken Rohleder (502-412-0123) is president of Rohleder Group, an independent consulting firm specializing in packaging supply chain management and design. Rohleder Group provides strategy and training to companies focused on optimizing their packaging program performance.