With labels, the only thing that isn't changing is their widespread use.
When asked about anything new or different within the past year regarding their label operations, manufacturers had a lot to say. John Shanley, president of Labels West, Woodinville, Wash., talked about greatly decreased order sizes, yet greatly increased order activity, and how the demands for consistently high-quality labels and extremely rapid turnarounds are necessitating digital technology.
"High-quality label products used to be considered specialties. Now, that quality is expected on every label order, and companies are having to invest in that quality," commented Shanley.
At Tipp City, Ohio-based Repacorp Label Products, owner Rick Heinl talked about the shift from stock labels to custom-designed labels in his plant and the impact it's having on his production environment. He is also cautiously planning how to gear up physically and financially to add radio frequency identification (RFID) capabilities, a move he sees as essential for anyone wishing to remain a serious competitor in the label market.
And, both gentleman pointed out that end-users are more knowledgeable and more demanding than ever before, expecting a lot from distributors who, in turn, look to suppliers. "Distributors want to sell a label once. They don't want to have to worry about problems that they'll have to go back and take care of," observed Heinl. "When it comes to choosing a vendor, successful distributors know that it's not all about price."
Buyers Are Downsizing
According to Shanley, customers no longer want to order 100,000 labels at a time to see them through a three-month period. Instead, they prefer ordering 1,000 labels every week. He explained that by carrying less inventory, companies increase their cash flow. "The money can be used for something more constructive than sitting on a shelf," noted Shanley. "Also, the bulk of our label business is for retail packaging, and smaller quantities allow end-users to be more flexible in changing labeling information as needed, instead of waiting until they've used up months worth of inventory."
Obviously, continuous ordering and billing cycles increase administrative burdens for distributors and manufacturers—and drive the need for automated office systems. Also, the constant setting up and tearing down of machines creates production challenges that are being addressed through digital technology, such as Labels West's recently installed computer-to-plate (CTP) system, designed specifically for smaller runs and quicker turnarounds.
Shanley explained that CTP technology reduces cost, saves time and increases quality by eliminating the need for film and the staff required to expose and process it, while preserving the crispness of artwork for a sharper plate image.
He estimated that CTP capabilities cut out an hour of prep time. "That's not a big deal when it's a job that's on the press for 10 days," he continued, "but it's a huge benefit when you have several short-run jobs that are only on the presses for an hour." In addition, if a problem is discovered in the plate, it cuts in half the amount of time a machine is on hold while a new plate is being made.
Shanley pointed out that while CTP technology is more common in the offset world, it is a relatively new technology for a flexo operation. "We're the first company in the northwestern United States to have it," he continued. Later in the year, Shanley will be "blending conventional and digital technology" when he installs a digital ink-jet imaging system on one of his conventional presses for addressing and personalization capabilities.
Shanley has also noticed that with costs coming down, more and more people are using color to sell products. "Shelf appeal has proven to be a huge factor in consumer buying decisions," he said, "and companies are spending money to dress up their label products. They know that if they spend an extra penny, they can charge an extra dime—and that's good math for anyone."
Research indicates that consumers who have not decided on a brand before they enter a store will make their decision within eight seconds of looking at the shelf. "Typically, they believe that the product with the higher-quality label is the better product," continued Shanley, "and they're willing to pay more for it."
Change Is in the Air
The increased demand for high-quality, custom-designed color labels is impacting production schedules at Repacorp, as well. Heinl noted that within the past year and a half, his label orders have gone from being 60 percent stock and 40 percent custom to 65 percent custom and 35 percent stock. "Manufacturers who were forced to shut down plants, lay off pressmen and sell off presses within the last three years can't handle the spike in order activity resulting from a rebounding economy, so they come to preferred vendors, such as Repacorp," he explained.
The shift from predominatly stock to custom work means frequent plate changes and increased job runs every week that create production challenges, but no one at Repacorp is complaining. At the same time, Heinl mentioned that his stock label program has grown by approximately 20 percent. Other popular label products include shrink labels and in-mold labels, as well as bar-coded labels, which are standard today for consumer goods and the health-care industry.
Heinl has also begun working on lenticular products. "But," he added, "lenticular is a tough application because it's difficult to get consistently good lenticular materials from one run to the next." In the near future, Repacorp plans to add RFID labels to its product line. "I've been studying everything I can find on RFID," said Heinl. "The technology isn't quite settled yet, so I haven't written any purchase orders for equipment, such as inserters, but RFID is on its way."
Heinl pointed out that offering these products will also require a "clean room" environment and welders to put the chips and the antennas together. "I'm looking at an investment of between $500,000 and $1 million dollars, but I need to make sure I get a good return on that investment."
In addition to its flexography, hot stamping, thermal-transfer printing, silkscreening, digital printing and ion deposition capabilities, Repacorp installed a 61⁄2x10´ NUR Tempo press in its Phoenix-based Sierra Screen Printing division in February that offers high-resolution, wide-format digital printing and fast turnarounds, but with pricing comparable to screen printing.
Knowledge Is Profitable
Both Shanley and Heinl acknowledged that it is difficult for distributors to keep up with every supplier's evolving production techniques and manufacturing capabilities, but they stressed the benefits of being informed.
"Instead of distributor learning always being driven by customers' needs for new or unique applications, they should strive for a more proactive approach and be ready to make suggestions that educate customers and create sales opportunities," Shanley said. It isn't necessary to know the nitty-gritty details, but distributors should know about high-quality and lower-quality digital printing equipment, and how the products they produce vary in quality, as well. "Know the quality to expect for the price that's being paid and make sure that it matches the customer's needs," recommended Shanley. "In some situations, a lower-quality digital product might be OK."
Heinl pointed out that suppliers often become pigeonholed by distributors regarding particular capabilities, even though they may have expanded significantly. "Despite our marketing efforts, we discovered at a recent trade show that distributors were unaware of how much custom label work we do, and our process-color, nine-color, wide- format and digital capabilities," he said. "Because a knowledgeable distributor exudes competence and reliability that customers pick up on, becoming better informed is sure to increase sales."
By Maggie DeWitt
- Companies:
- Labels West
- Repacorp
- Sierra Screenprinting
- People:
- John Shanley
- Rick Heinl