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Opportunities for a barcode-based package labeling system in the Chinese book-printing work in process

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Chenfan Zhang

on 13 December 2012

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Transcript of Opportunities for a barcode-based package labeling system in the Chinese book-printing work in process

for a Barcode-Based Package Labeling System in the Chinese Book-Printing Work in Process Opportunities Chenfan Zhang
School of Packaging
Michigan State University
12/14/2012 ackground introduction

hinese book-printing industry investigation

abeling application in automotive industry

omparison between the two industries

onsiderations to build a new model

onclusion Outline B c L c C c Target Investigate the necessity of implementing a package labeling system based on barcode technology to improve the in-house packaging transit efficiency for the Chinese book-printing industry, which is growing fast, but the profit keeps going down in the face of new challenges.
Questions for most Chinese book-printing companies "In-house packaging transit”

The process to move packages of materials, work in process, and finished products between production processes. Is labeling system a weakness for in-house packaging transit?
Should they improve the labeling system and why?
Who should they study from?
What should they study? Background introduction One-sided updated technologies
Changed market pattern
Raised cost
Fierce competition and lower price 1978 2012 1980s-90s The international trend Declining Global Printing Market vs. Raised Chinese book-printing sales
From "World Company" to "World Brand" Now: 2.2% down / year 2009 – 2012
Forecasting: 1.8% down / year 2013 - 2017 (Resource: IBISWorld report) 1- US Decrease of total quantity of printing companies, 68 bankruptcies filed in the first half of 2011, 6.8% higher than 2010 2 - Japan (Resource: Teikoku Databank, Inc., 2012) 5 - UK Shows the overall declining trend (Resource: Key Note, Inc) 3 - China Steady growth of sales volume
Prediction of rise in book-printing by trade relocation from other countries, and growing domestic consumption needs
Will over Japan, to be the second largest printing entity by 2015 (Resouce: Smithers Pira Market Intelligence, 2011; News, Wireless, 2011) *Asia: Total of Asian countries excluding Japan and China
Global printing market forecast (2011-2016)
(Resource: Smithers Pira Market Intelligence, 2011) HOWEVER, things have changed Profiteering era in China New Challenges Revived publishing houses needed printers after the Cultural Revolution vs. Scarce printing resources
Accrued sky-high profits
Low threshold entering the business 20%-40% profit margin (Resource: Liu, 2010; Pan, 2009) 2-3% profit margin for small printers;
10% for large companies In the past:
Average > 20,000 copies per title

Since 2008
The demand side is off due to E-reading and more diversified selection
More titles, less copies
Overall sales volume is up
99.5% titles sold < 5000 copies
Publishing cycle becomes shorter
Changed market pattern Automation - only accelerates the production rate for single process
Computer direct plate-making technology
Digital printing machinery
Large investment for upgrade
Bottlenecks between
each process One-sided updated technologies Higher material cost, especially paper
Cost to "go green" - 10-20% up
Purchase green ink
Redesign the oil pipeline
Update equipment
Rise of the Chinese labor cost
Mainly due to currency appreciation
Overquick inflation Raised cost 2000 - 2010, from ten thousands to over 106,400 printing companies nationally
Book-printing ranked the second largest portion Fierce competition Slumped printing price
E.g. Lithographic printing paper
In the past: 25 Yuan per color ream
Now: 8-10 Yuan per color ream Time has come for change Large book-printers want to be more competitive in their own area
Adapt to new market pattern
Reduce non-valuable cost
Earn bargaining power
Win better reputation Why look at the package labeling system Poor labeling of the in-house packaging transit process is believed as a weakness that suppresses the competitiveness of many Chinese book-printing companies. Chinese book-printing Industry
investigation Survey
Audio Interview
On-site research Survey Seven are unsatisfied with (or not sure) about the packaging transit performance Production managers in ten leading book-printing companies answered below questions in July, 2012 Only one is using complete automatic computer generated labels via its management system Only half of them applied barcodes with limited utilization Five managers agree it worth a try to implement a barcode-based labeling system or to update the existing one. Activities of the packaging transit process Receiving and storage of raw materials
Raw materials pick up
Storage of raw materials after processing
Printing plate production
Printed paper sheets waiting for folding, cutting or other post-press finishing processes
Storage of sub-assemblies
Pack matching service
Storage and delivery of finished products The existing package labeling system and drawbacks Supplier label
Material code & inventory tag
Material code
Inventory tag based on a variety of numbers
Seal number & work labels
Seal number
Work labels
Shipping label General wastes "Waste" is activity that does not add value to the product or service which can limit a business over time, unless they are identified and systematically eliminated.

Seven categories of wastes are identified by Japanese engineer Taiichi Ohno to prevent maximum utilization of resources, which includes overproduction, waiting, transportation, processing, inventory on hand, movement, and making defective products. (Lewis, 2005) Waiting and movement wastes
Higher risk of defective products waste
Inventory wastes [On-site research] Packaging transit bottlenecks Labeling application in automotive industry Supplier label
VQQ label
Storage label
Date label
Location label
AHB label
Overhead hanging label
Shelf label on the rack Linear barcode - Code 128 for license plate

Two dimensional barcode - PDF 417 for both supplier and storage labels Comparison between the two industries Low attention vs. High attention of labeling application
Improper vs. Proper barcode utilization
Manual procedure vs. Automatic procedure with barcodes
Unwritten policies vs. Strict standards
Out of touch vs. Partner relation Barcode application
Redesign the existing labels
Add new label categories
Apply the color and graphic scheme
Rearrangement of the warehouse configuration
Education and training Conclusion Material flow of paper: Material order - Plate making - Printing - Folding - Post-processing - Binding - Pack matching - Delivery Blue area - Receive packages
Green area - Store packages
Yellow area - Pick packages
Orange area - Sort / Collate packages
Purple area - Deliver packages In-house packaging transit processes Supplier label The product label a supplier attaches onto each product for self-identification
Product UPC (Universal Product Code)
Supplier identifier
Product description No industry standard to define it
Could be any style
Barcode symbologies are diversified
Miss communication with printers’ management system
Only support visual inspection Drawback Material codes on inventory tags A Material code is composed by two capital letters and six numbers, such as IM006048
IM - A specific category
006048 - A unique kind of material under the category

Created by anyone who first presents a purchase requisition for the material
Constantly exists as a BOM (Bill of Material) for future ordering
Embedded in WMS (Warehouse management system) Drawback No relevance between adjacent numbers
Possibility to be established repeatedly
All embedded information are manually updated
Does not link to materials provided by customers
Only supports computer tracking Inventory tag Printed out onto a piece of A4 ink-jet paper
Taped onto the material
Contains several management codes and original material information
One Material code per tag
WMS batch number / PO (Purchase Order) number / Supplier ID code / Operator code
A underneath blank chart to fill in
updated information Drawback Hard to distinguish via visually inspection. More rely on sorters’ experience, proficiency, and sense of responsibility when pick packages
Poor design to identify information
No standard to set a fixed adhesive position
Manual entry information without self-verification
Lazy to implement FIFO (First in first out) An inventory tag is applied when materials are received, stored, picked up, and replenished from suppliers in printers’ warehouse. Drawback Seal number for work labels Shipping label Work label The seal number is composed by two capital letters and four numbers, such as HM1781
HM - Domestic sales department (H) in 2012 (M).
1781 - 1781st books

Generated by a customer service representative for one book order
Goes through every field of the ERP system
Printed on all paper sheets, and work labels.  Drawback Help identify order by order, but cannot distinguish sub-assemblies in one batch
Hard to distinguish via visually inspection Work labels are attached onto the packaging of semi-products and sub-assemblies, aim at providing the pack information for the next department.

It includes the printing, folding and binding work label, as well as the outward processing label, return factory label, and sample labels.
Go through the whole production flow
Link with each other by the seal number
Exported from ERP system
Each has the same Code 128 barcode (Not applied) Drawback Hard to identify via complete visual inspection
All look the same from a distance
Randomly stacking
Case: 2.5 hours to pick and sequence pallets of 13 SKUs from the transit area for book binding
Handwritten outward processing labels Drawback Drawback Local publishers
Have their own labeling and packaging criteria
Barcode is not common for local customers
Foreign publishers
Require sticking two pieces of extra linear barcode labels onto two adjacent surfaces for each container Rely on customer requirement Label without special requirement. Dirty, fragile and illegible Barcode labels for exporting books Must manually count, sort, and record product packs in the finished product warehouse
High possibility of human error
Status cannot be tracked for a specific single container once delivered
Lead to meaningless dispute due to lack of traceable delivery history Unordered stacked packages
Over 20 orders run in one workshop during the peak season
Non-real time packaging location information

Must walk around to look up packages
Machine is idle during the waiting hours
Many labor hours are taken to wait Waiting and movement wastes Manual operation fosters
Higher human error rate (>1 per 40 entries)
More defective products
Case: Mistakes due to visal inspection
Multi language version books
Midnight-shift, tired workers
Mixture of US and UK version leaves
Reproduction - Direct income loss
Impaired reputation Higher risk of defective products waste As a chain reaction of human errors, inaccurate records in the warehouse system lead to increased obsolete stock per auditing
Occupy the space
Depreciate fast
Labor and time spent to dispose Inventory wastes
Busy season
A chaotic and lousy work condition
The packaging transit bottlenecks show out since every department is suffering intensive orders
New production trend
A mass of small orders with shorter production cycle apply more pressure to the entire industry
The packaging transit delay will be easier highlighted

"Firefighters" - Never stop working on an emergency
"Vicious cycle" - Mistakes, delay, rework, complaints from clients, financial loss, and following dispute from top to bottom What the current labeling system gave us Barcodes implementation Highly standardized job
Templates are available for every label
Supported by all suppliers
Simplify the entire process by applying barcodes
Real time tracking and verification
Easier visual identification with color and better label design Features Considerations to build a new labeling model Why more barcodes

Why not RFID or Smart Label No related industry standards
ISO standards available for reference
S.a. ISO 15394-2009 / ISO 22742-2010 / ISO 28219:2009 for packaging and labeling
Standardization from supplier, printing company and customer
Standardize only from the printing plant side
Standardize from the supplier side
Standardize from the customer side Barcode symbologies options
Barcodes scanner options
Printer options
Verifier options
Information management systems
& Software
Suppliers recommendations A standardized barcode-based package labeling system could help. But how? An inevitable element of the modern industry
Store, collect and convey tremendous amount of data for diversified functions
Easy to design and print
Cheap (As low as few cents per piece)
Get rid of labor intensive process
Lower the experience requirement to employees

Cost issue
Built by circuit instead of ink
More attractive to products at or above a $ 15 cost
The application scope issue
Over-sensitive in a random workshop / warehouse which work areas are crossing to each other Barcode - Barcode symbologies options "Symbology" is the language of barcodes that refers to the configuration of bars and spaces
Linear barcode - Code 39 / Code 128 / GS1-128 data bar
2D barcode - QR Code / Data Matrix / PDF-417 (LaMoreaux, 1995) Suppliers recommendations The scanners scan or read the bar code and capture its encoded data, then display the data to a connected device, such as a computer, and meanwhile send it to a centralized database warehouse. Barcode scanner options Laser scanners
Digital imagers (Motorola, Inc., 2007) General purpose barcode scanners - Wire or wireless, multiple-propose
Ruggedized barcode scanners - For harsh conditions
Fixed mount barcode scanners - Hands-free Scanner categories (Motorola, Inc., 2007) Printer options Generates a label that is attached to products for identification Industrial Label Printers - High-duty cycle / Harsh condition
Mid-range Label Printers - Moderate-volume / Small to medium-size
Desktop Label Printers - Low to medium volume / No space limitation
Mobile Printers - On-site / Worn on the belt
Color Inkjet Printers - Add color / Waterproof Verifier options Ensures every printed barcode meets specification and will be able to be scanned Can be in-line with printing or can function as a separate operation
Has both linear and 2D versions. Information management systems Digitized database based on existing information network
Compatible with equipment software In the survey, seven companies have their own resource management systems (SAP/ERP) as shown in Table 11 and 12. Five have contained warehouse management part, and the other two have the separated WMS system. Manufacturing global giants - Motorola, Metrologic, Honeywell, Datalogic, etc. Local small suppliers - More cost-effective / Service level is not guaranteed (Resource: MAIGOO.com, 2012) Apply Code 128 and PDF 417 rely on the existing ERP and WMS systems
Equip the laser barcode hand terminals
Small size label printers for each department.
Find assistance and guidance from a qualified integrated solution supplier, to establish the barcode information network that links all packages to real physical locations and the resource management system. Feasible selection Standardization Under the trend of smaller book orders, the high flexibility and fast response of this system
Allows a higher productivity of each manufacturing process
Ensures effective utilization of warehouse space without extra investment of large scale equipment or facilities
Directly offsets the increasingly expensive labor cost by
shortening the non-valuable work hours during every packaging transit process, and
reducing the high dependence of skilled personnel who would expect higher wages
Benefits from the reduction of potential human errors
Implies a triumph of reputation Reasonable to implement a better standardized barcode-based package labeling system in the Chinese book-printing industry
No available database to guarantee a substantial profits
But advantages are clear without any doubt Thank you!!! Questions? (Part questions are listed here) A highly standardized label specification is built to all suppliers
Two pieces in the adjacent two surfaces of one container
Label color - White
Dimension - 4” high x 6” wide (Or 3" x 8" for smaller package)
Apply Code 128 license plates that consistent with the setting of the entire identification system. Supplier label The quality verification label by the third quality assurance company Vani Quality Quest, Inc.
Packages are not allowed to process without VQQ label Equals an inventory tag
Print out after the operator scans the supplier label barcode
Label color is yellow to distinguish from the supplier label
Two pieces on the adjacent surfaces of container VQQ label Storage label Date label An independent label
Refers to the day the warehouse receives a batch of parts. Format of MM/DD/YR
Different colored tags Marks Alternate Storing Location for new model parts
Other locations are fixed with overhead hanging labels Helps return reusable containers to suppliers
Unique to every supplier Location label AHB label Overhead hanging label Distinguish location, store and retrieve parts information
Different colors
Facilitates FIFO policy Shelf label on the rack Provides a linkage between storage and pick up
Check in and check out when to store and pick up the package
Helps visual inspect the correctness of stored parts information More orders for same sales
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