Diversified Labeling Solutions

Label materials 101

 THE TRUE COST OF LABEL FAILURE

Lost Assets, Re-Scans, and Supply Chain Blind Spots

BY KATIE FORSYTHE

 

A technician scans a pump’s asset tag and gets nothing. The barcode has faded and the corner is peeling. The pump is right there, but your asset system can’t see it.
 

Label failure is when an identification label can no longer be scanned or read reliably, usually because of fading, peeling, abrasion, chemicals, or poor print quality. Labels are among the cheapest items on the bill of materials, yet they link every asset to your ERP, WMS, CMMS, and compliance records. When they fail, the costs spread across lost assets, wasted labor, and supply chain blind spots.

Key Takeaways:
 

  • Failed labels create ghost assets, duplicate purchases, and inaccurate books.
  • Every failed scan costs labor and invites manual entry errors.
  • One unreadable label can break traceability across a supply chain.
  • Durable, application-matched labels usually cost less over an asset’s life.

WHY DO ASSET LABELS FAIL?

 

Most labels fail because the material, adhesive, or print method doesn’t match the environment or the asset’s lifespan. Here are some of the common reasons:

UV and Weather

Faded print, cracked face stock

Chemicals

Smeared print, lifting edges

Abrasion

Scratched or worn-off barcodes

Adhesive Mismatch

Peeling on textured, curved, or plastic surfaces

Wrong Print Method

Low contrast or fading direct thermal labels

Lifecycle Mismatch

Label fails years before the asset retires

Cost #1: Lost and Ghost Assets

When a label fails, the asset can’t be verified. Industry estimates suggest 10% to 30% of recorded fixed assets are no longer actually owned. A ghost asset appears on your fixed asset register but can’t be found or verified. An asset with an unreadable tag may sit in plain sight yet fail to match its record during an audit. The results include:
 

  • Duplicate purchases of equipment you already own
  • Inflated taxes and insurance on assets that exist only on paper
  • Inaccurate depreciation and audit findings
  • Idle equipment that no one can locate

Cost #2: Re-scans, Manual Entry, and Labor Drain

A single re-scan takes seconds. Across thousands of scans, those seconds become hundreds of labor hours a year.
 

Annual cost = failed scans per day × seconds lost ÷ 3,600 × labor rate × working days.
 

For example, 200 failed scans a day at 30 seconds each, a $35 loaded labor rate, and 250 working days add up to about 417 hours and $14,600 a year. That’s labor alone.
 

Manual workarounds add risk. Keyboard entry produces about one error per 300 keystrokes. The same source reports inventory accuracy of 63% to 85% with manual entry or poorly maintained scanning, compared with 95% to 99.9% with well-implemented barcode scanning.
 

Relabeling adds more labor, especially for assets on rooftops, in confined spaces, or near energized equipment.

Cost #3: Supply Chain Blind Spots

Traceability only works if every handoff captures clean data. One unreadable label creates a gap that every downstream partner inherits.
 

  • Misrouted shipments and time-consuming manual sorting
  • Phantom inventory that causes both stockouts and overstock
  • Chargebacks from retailers for labels that don’t scan
  • Wider recalls when lot or serial numbers can’t be read


The stakes are rising. Under the FDA’s FSMA 204 rule, covered food companies must produce traceability records within 24 hours of a request, with enforcement starting July 20, 2028.

HOW TO PREVENT LABEL FAILURE IN SIX STEPS

1. Assess the Application

Document the surface, temperature, UV, moisture, chemicals, abrasion, and service life.

 

2. Match the Material

Use anodized aluminum for outdoor and long-life assets, polyester for general industrial use, polyimide for high heat, and tamper-evident materials for high-value items.

 

3. Choose a Durable Print Method

Thermal transfer with resin ribbon, photo-anodizing, and laser etching all outlast direct thermal, which can fade with UV, heat, and chemicals.

4. Pick the Right Data Carrier

Choose 1D barcodes, 2D Data Matrix or QR codes, or RFID based on space and read conditions.
 

5. Test First

Pilot in the real environment and verify print quality to ISO/IEC standards.

 

6. Audit Regularly

Track first-pass scan rates and replace labels before failures pile up.

FREQUENTLY ASKED QUESTIONS

What causes asset labels to fail?

Labels fail when the material, adhesive, or print method doesn’t match the environment. Common causes are UV, chemicals, abrasion, extreme temperatures, and poor adhesion.

What is a ghost asset?

A ghost asset is listed on a fixed asset register but can’t be physically found or verified. Unreadable labels make ghost assets more likely.

How long should an asset label last?

At least as long as the asset’s expected service life, which is often 10 years or more for capital equipment.

What is the most durable type of asset label?

Anodized aluminum and laser-etched metal labels are among the most durable for outdoor and harsh environments. Polyester and polyimide labels work well in many industrial settings.

DLS IS HERE TO HELP!

 

Your labels shouldn’t be the weak link. DLS helps distributors get the right labels for every application, from durable asset tags to compliant shipping labels to industrial labels built for heat, chemicals, and UV. Our specialists match the material, adhesive, and print method to your environment, so you get fewer failed scans, fewer relabeling projects, and clearer supply chain visibility. Contact us today to discuss your customer's label requirements and find the best solution for their application.
 

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