I agree with using a FIFO, but only to track the product on the conveyor. I think he might be better off using a shift register to track the bad label to the point it gets applied, then use the good/bad label status in this shift register for the FIFO.Use a FIFO with a sensor at the reject station. At the inspection load the FIFO with the good/bad status of each label. Unload one status at the reject station.
Yes, it's much harder, but easier does not mean more correct.I don't deal with this problem but I wonder, isn't it much harder to read a label when it has been wrapped around a bottle than when it is flat in the label feed section? But there is the misapplication problem to deal with also.