5 Hidden Sources of Waste in Label Converting

Find the “Silent Wastes” That Erode Margin, and the Operational Controls That Prevent Them.

In the label converting industry, “waste” is traditionally measured by the amount of matrix and scrap material left over after a production run. However, in today’s high-mix, low-volume market, the most significant sources of waste are often invisible. They are the “silent wastes” that hide in inefficient processes, such as time spent waiting for materials, capital tied up in excess inventory, and the opportunity cost of an idle press.

This guide explores five of the most common hidden sources of waste in the label converting industry and outlines the modern operational practices and systems that can help to eliminate them.

1. Inventory Obsolescence: The “Just-in-Case” Tax

The Problem:

Without a real-time, accurate view of inventory, purchasing managers often resort to buying “safety stock” to avoid the risk of stockouts. They order extra material “just in case” the system count is wrong or a job requires more than expected. Over time, this practice leads to an accumulation of off-cuts, partial rolls, and expired materials that take up valuable warehouse space and tie up working capital.

Why It Matters:

This “just-in-case” tax has a direct impact on your bottom line. The capital tied up in excess inventory could be invested in other areas of the business, such as new equipment or marketing initiatives. Furthermore, the physical space occupied by obsolete inventory could be used for more productive purposes.

The Modern Solution:

A modern, cloud-native ERP system like Paxis provides the tools to manage inventory with granular precision. By tracking inventory in real-time, you can eliminate the need for safety stock and reduce the risk of obsolescence. Key features include:

• Real-Time Inventory Tracking: Track raw materials and finished goods with up-to-the-minute accuracy.
• Reorder Points & Low-Inventory Notifications: Set automated triggers to reorder materials when they reach a certain level, ensuring that you always have what you need without overstocking.

2. Administrative Redundancy: The “Data” Waste

The Problem:

How many times does your team enter the same information into different systems? A customer name, a job specification, a shipping address—each time this data is manually re-keyed, it creates an opportunity for error and introduces a bottleneck into your workflow.

Why It Matters:

Manual data entry is not just a time-consuming task; it is a significant source of operational risk. A simple typo can lead to a job being produced incorrectly, shipped to the wrong address, or billed at the wrong price. These errors can be costly to fix and can damage your reputation with your customers.

The Modern Solution:

A unified operational flow, supported by a modern ERP, eliminates the need for manual data entry by creating a “single source of truth.” Information is entered once and then flows seamlessly through the entire system. Paxis, for example, is positioned to streamline estimating and operational processes to save time and reduce errors.

3. Press Idle Time: The “Gap” Waste

The Problem:

The most expensive asset in your facility is a press that is not running. In many cases, presses sit idle not because there is a lack of work, but because of a lack of coordination. The press is ready to go, but the required plates, dies, or materials have not yet arrived.

Why It Matters:

Every minute that a press is idle is a minute that it is not generating revenue. This “gap” waste can have a significant impact on your profitability, especially in a high-mix, low-volume environment where changeover times are already a major cost driver.

The Modern Solution:

Modern ERP systems provide the tools to improve production planning and reduce press idle time. Paxis, for example, includes production management features to oversee day-to-day production tasks and plan equipment usage to boost operational efficiency.

4. Over-Production: The “Safety” Waste

The Problem:

To avoid the risk of being short on a run, operators may be tempted to produce more than is required. While this may seem like a prudent approach, it can lead to significant waste over time. The extra material and press time used to produce the “safety” output adds to the cost of the job without adding any value.

Why It Matters:

Over-production is a hidden cost that can quietly erode your margins. While the cost of a small overrun on a single job may be negligible, the cumulative effect of this practice across all jobs can be substantial.

The Modern Solution:

By improving the accuracy of your estimating and planning processes, you can reduce the need for “safety” output. A modern ERP provides the tools to achieve this, including:

• Better Estimating Inputs: Advanced estimating features allow for more accurate calculation of material and time requirements.
• Tighter Visibility into Operational Data: Data collection for real-time operational insight allows you to compare your estimates against actual production data and continuously improve your planning accuracy over time.

5. The Rework Loop: The “Quality” Waste

The Problem:

Rerunning a job due to a preventable error is one of the most costly forms of waste. You not only incur the cost of the materials and time to produce the job twice, but you also risk damaging your relationship with the customer.

Why It Matters:

The cost of a rework goes beyond the immediate financial impact. It can also lead to production delays, which can have a ripple effect on other jobs in the queue. Furthermore, a rework can damage your reputation for quality and reliability, making it more difficult to win future business.

The Modern Solution:

A modern ERP can help to reduce the risk of reworks by providing greater control over the production process. Paxis, for example, offers traceability capabilities, such as tracking at the pallet level, and stronger control of operational records to help reduce ambiguity when investigating what was used and where.

The Compound Effect of Eliminating Hidden Waste

By addressing these five hidden sources of waste, you can achieve a compound effect that significantly improves your profitability and operational efficiency. Eliminating waste is not just about saving money; it is about creating a more streamlined, agile, and resilient business that is better equipped to compete in today’s dynamic market.