A system and method are disclosed for automatically dispensing labels for information handling systems being assembled, in an assembly line that is configured to produce many different types of information handling systems with differing internal components. In some embodiments, a service tag identifier and parts listing are associated with each information handling system-under-assembly. The service tag identifier is written to an RFID tag that can be read at various stages of assembly. In some embodiments, when an assembly bin arrives at a label station of the assembly line, the RFID tag is read and a database is searched for the matching service tag and the associated parts listing. One or more appropriate labels are then automatically dispensed in response to the components in the listing. In this manner, correct association of labels with the components is maintained, and the search and dispensing process is performed in an efficient manner.