July 13, 2022
VDC Analyst Perspective: Coding & Marking Automation Gaining Momentum
VDC Consultant, AutoID & Data Capture
Automation is critical today for enhancing manufacturing productivity and in meeting customer expectations for product quality and traceability. Manufacturers are leveraging a variety of solutions as the need for accurate on-package information grows, accelerated by requirements around coordination, synchronization, and consistency in data access/use across globally distributed locations. VDC’s recently concluded primary research on coding and marking solutions – which are used at every level of packaging to print batch numbers, lot numbers, logos, MRP, expiry date, barcodes, etc. – highlights several interesting insights into this highly fragmented marketplace.
The majority of the solutions deployed today are siloed with operators often manually entering codes. Product changeovers are typically manual changeovers, with a high dependence on manual input, and therefore, prone to errors. Nearly half of the organizations that participated in VDC’s survey experience coding and marking-related errors at least once a week. Respondents indicated the following as the three leading contributors to coding errors – incorrect coding and marking data (52%); lack of clarity on coding and marking-related processes (46%); and, inconsistence processes across distributed locations (39%). These lead to loss of brand equity and consumer confidence – amounting to a loss of business – with organizations incurring expenses due to waste generated from rework and scrap, production line downtimes due to wrongly coded products, and regulatory penalties and fines for non-compliance, among others.
Organizations are considering making the transition from manually operating each device to automating the synchronization of print jobs and coding data to remove the “human element”. This will involve integrating coding and marking solutions with their enterprise systems to enable seamless communication and data sharing for enhancing overall operational efficiencies. VDC’s research shows that packaging errors can be prevented through automation investments and a clearly defined error-proofing process.
Software solution investments critical for more control and consistent processes
Danaher (Videojet Technologies and Linx), Markem-Imaje, and Domino Printing – account for over 70% of the market share with their broad portfolios and global distribution networks. Production facilities are typically “mixed” environments from the standpoint of coding and marking hardware installations (and their data sources), with multiple brands, models, and software applications being deployed and used, which makes device management and servicing more complicated. Inconsistent coding and marking practices in these environments contribute significantly to overall errors, resulting in waste due to rework and scrap and downtimes for shutting down production.
Costs incurred due to production shutdowns have companies and their solution partners taking a closer look at software as a means to bridge the “automation gap”. As with barcode labeling solutions, the importance of leveraging a “single source of truth” for coding/marking data has never been greater. VDC’s primary research shows that businesses are increasingly looking to equip their production facilities with comprehensive and customizable product identification technologies that address their unique requirements. The need to tackle challenges including counterfeits and supply chain disruptions (like those experienced during the pandemic) will drive up interest and investments in such solutions across automotive, electronics, food & beverage, medical devices, and pharmaceuticals, among others.
VDC sees leading coding and marking solution vendors taking different approaches to software development, integration, and maintenance, in keeping with the overarching trend for process automation.
- Domino primarily focuses on hardware with its parent company, Brother Industries, working on bringing down product development and manufacturing costs through global material sourcing strategies. It is establishing relationships with labeling software vendors to support organizational requirements for minimizing errors via coding automation in an effort to reduce manual intervention.
- Markem-Imaje is primarily taking the end-to-end, total solution provider route throughout its acquisitions around serialization, packaging intelligence, and brand protection, all working together with its in-house solutions platform, CoLOS®. This is designed to handle coding automation to streamline production, packaging variation, and line control to avoid errors during production changeovers. VDC considers the company’s in-house software offerings and capabilities to be the most comprehensive in the marketplace.
- Loftware, the largest enterprise labeling solutions provider, officially announced its strategic partnership with Videojet Technologies, the global market leader in coding and marking hardware sales. With this, the software vendor will extend its Spectrum Enterprise Labeling solution to coding and marking devices. Loftware Spectrum 4.6 includes new operator dashboards and standard integration to enterprise applications and is aimed at avoiding, if not eliminating, inefficiencies generated from manual interventions and downtimes during production changeovers. Combined with the VideojetConnect Remote Service, this collaboration aims to deploy, maintain, and scale coding, marking, and labeling management and operations across multiple locations via a unified platform.
These varied strategies prove that there is no “one size fits all” method to finding success in and with coding and marking automation. At the very least, organizations are looking for seamless integration with ERP and MES applications (among others) and to lower, if not eliminate, overall error incidence. Inconsistent coding and marking processes across an organization’s distributed locations are proving to be detrimental to operational efficiencies and overall productivity, leading to investigation of and investments in process automation capabilities.
VDC’s latest report on “The Global Market for Industrial Coding & Marking Solutions” quantifies the total cost of errors and highlights opportunities for enterprises to improve efficiencies while driving down costs. It includes global market sizing and forecasting along with end-user investment considerations based on data from our comprehensive end-user research survey and insights from in-depth interviews with leading and emerging vendors. Download the VDC Executive Brief to learn more.
- Supply Chain