by Richa Gupta | 11/21/2024

Ongoing digital transformation within factories and the shift to Industry 5.0 standards is driving the need for automated, cloud-based solutions that can facilitate error-free serialization and traceability workflows. Regulations like the Drug Supply Chain Security Act (DSCSA) and the Food Safety Modernization Act (FSMA) 204 are influencing the implementation of serialization mandates in the pharmaceutical and food and beverage sectors. Additionally, the European Union's Digital Product Passport initiative is commencing with the introduction of a "battery passport," which aims to enhance cradle-to-grave traceability of batteries with compulsory adoption by February 18, 2027. This initiative will provide essential information, including carbon footprint and supply chain movements, through data carriers such as QR codes. Manufacturers who don’t update and upgrade their labeling, coding and marking hardware and related software run the risk of non-compliance with evolving traceability mandates, which can lead to costly errors, production-related inefficiencies and extended downtimes, and penalties. VDC’s research suggests that these costs and associated risks could be passed on to upstream and downstream partners who are unable to implement solutions effectively.

The examples below highlight how AIDC and affiliated market participants are increasingly focused on offering end-to-end solutions that support customer requirements for ani-counterfeiting, branding, product identification information, regulatory compliance, safety, serialization, and traceability.

• Mojix provides a multi-tenant, cloud-hosted product traceability software that helps customers manage label creation and tracking events to maintain regulatory compliance. It offers item-level visibility from sourcing through manufacturer information, warehousing events (including packing, picking, and shipping), and all other inventory management and traceability-related insights. The Mojix AI Visibility Engine (maiven™) leverages Generative AI capabilities to provide real-time data insights for store-level merchandising and distribution/warehousing workflows for accurate inventory management. Seagull Software announced its merger with Mojix in October 2024, extending its value proposition from enterprise-wide barcode labeling to asset visibility, authentication, and traceability – this merger effectively combines Seagull’s BarTender labeling software with Mojix’s real-time data platform. During a recent webinar, Seagull Executives also highlighted how the merged entities will now work to improve efficiencies throughout the supply chain, including within warehouses; help customers meet regulatory compliance requirements; and, reduce the overall costs of operation through streamlined data-powered workflows.

• Leading coding and marking systems vendor, Markem-Imaje (part of Dover Corporation, NYSE:DOV), acquired Systech in 2020. With this, the company offers digital identification and serialization solutions that provide real-time data insights to facilitate authentication and traceability in the supply chain. Systech is a cloud-based solution enables data consolidation, reporting, and sharing to help customers with their information requirements around compliance-driven recalls, product provenance, and warranty management. The vendor also announced its partnership with Spherity, which provides solutions to automate and digitize compliance processes in highly regulated industries, for an Authorized Trading Partner (ATP) solution for error-free partner accreditation. Systech’s solutions are primarily offered to the following industries – Pharmaceuticals, Medical Devices, Nutraceuticals, and CPG.

• Veralto Corporation (NYSE:VLTO), the $5 billion globally diversified conglomerate launched in October 2023 from a Danaher spin-off, is a leader in the coding and marking solutions market through its divisions – Linx and Videojet. In October 2024, the company acquired TraceGains, a cloud-based software vendor that enables compliance, safety, and traceability in the food & beverage industry. This highlights Veralto’s commitment to offering end-to-end authentication, compliance, safety, and traceability solutions that help F&B customers meet stringent regulations regarding ingredients and overall quality. TraceGains’ Gather™ is a Networked Ingredients Marketplace that enables participants to find items and relevant suppliers in real-time, network with partners, and integrate compliance and risk management. Some of the most attractive opportunities for the comprehensive TraceGains system are around the UK’s HFSS (High Fat, Salt and Sugar) regulations limiting the availability of such products through volume promotions (coming into effect from October 2025) and restricting the placement in high-traffic areas within stores (in effect from October 2022); and US’ FSMA 204 regulations requiring documentation of Key Data Elements (KDE) for Critical Tracking Elements (CTE), among several other compliance mandates from the European Union.

VDC believes that mergers and acquisitions in the markets for AIDC and other adjacent technology segments will serve to extend competitive differentiation and customer stickiness. As hardware becomes increasingly commoditized, market participants will increasingly turn to software that not only highlights their commitment to offering end-to-end solution capabilities, but also emphasizes their value proposition in offering agile and flexible feature enhancements based on customers’ specific regulation-driven requirements. Portfolio extension through inorganic growth strategies will offer these companies end-to-end traceability and authenticity tracking capabilities that customers can leverage for cradle-to-grave tracking.

Stay tuned for VDC’s 2024 Industrial Coding and Marking Solutions research that will explore these themes in greater detail.