Brands rarely think about retail chargebacks until the deductions start showing up in their invoices. And the amount that suppliers will have to forfeit differs by retailer and violation type but chargebacks can typically range from 1% to 5% of the gross invoice amount.

One of the most common, yet preventable, causes of retail chargebacks is packaging and labelling issues. A labelling error, unreadable barcode, or incorrect printed information may seem like a small production issue but it can have big penalty repercussions that can cost thousands. And if you’re shipping through a third-party logistics provider that doesn’t log chargeback data for its clients then you might not know why invoice deductions were made.

This is why inventory control should start at production output as, if discovered later, it can lead to rework, laborious manual verification, inventory discrepancies, and delays in finished goods processing.

For manufacturers managing high volumes of finished goods, the question is not simply how quickly products can move out of production but whether the product, and its information, have been properly verified before that handoff takes place.

Make label inspection ‘part and parcel’ of the process

Many finished goods processes still rely on downstream checks, which means an issue originating at production may only become visible further down the line.

A more proactive approach is to establish a control point at production output. An ODV/OCR-assisted label inspection solution can verify barcode print quality and validate label data before finished goods leave production. This ensures the finished good is correctly identified before it enters the next process.

The solution connects label data, automated inspection and reprint, and digital inventory updates into one workflow.

Product label information from the MES is sent to the barcode inspection printer, where ODV verifies barcode print quality and validates the barcode data. Snapshots of the labels are sent to an OCR system for text and graphic verification. The OCR system then returns a result, pass or fail, to the printer.

If the label passes verification, it is printed as normal. If an error is detected, the incorrect label is automatically overstruck, and the correct label is reprinted, without manual intervention.

This means only verified product labels are applied to the finished product and its outer case. Before the goods enter inventory, operators can scan them with a keypad mobile computer and immediately update the WMS, connecting verified product identification with the inventory record. The result is a controlled flow from product identification to inventory entry.

Why does this all matter?

If manufacturers address label and identification issues at production output, they can reduce any manual effort and downstream disruption associated with incorrect finished goods information. Depending on the application and implementation, the solution can reduce verification time by 60–80%, cut label errors by 70–90%, and hasten put-away by 20–35%.

But the wider benefits are even greater. Manufacturers face not only increased pressure to automate but also growing expectations around traceability, so product information quality becomes increasingly important. Initiatives such as the Digital Product Passport (DPP) highlight this broader shift towards more connected product information. 

While finished goods put-away is not a DPP solution, it addresses a fundamental operational requirement behind more connected processes. Importantly, it makes sure product information is accurate at the point where it enters the next stage of the product lifecycle.

Engineer compliance into your production output point

Manufacturers don’t need to redesign their entire production or warehouse operation to improve their finished goods control. A practical starting point is engineering real-time validation control at the end of production.

TSC Auto ID has a number of experts on hand who could talk to you about your manufacturing workflow or ways of strengthening your inventory control at production output. If you have complementary technologies or capabilities and are looking to bring them into practical manufacturing applications, then get in touch with TSC now.