'Next Generation’ Product Identification Project Trading Partner Alliance Supply Chain Conference Feb. 2014 Agenda • The story so far • Building capability • In-market application • Q&A Copyright © 2014 Accenture. All rights reserved. 2 New forces are driving change for the consumer & retail trade environment Consumers are demanding more information, presented digitally, anytime, anywhere … Impact of Digital Regulators are now legislating that accurate product information be available digitally … Source: Kantar Research EU- 1169/2011 – Online Product Information US – e-Pedigree Requirements Copyright © 2014 Accenture. All rights reserved. Turkey – Pharmaceutical Track and Trace China – Online Consumer Rights Law 3 Today’s EAN/UPC bar code cannot accommodate additional information GDSN approaching 300 Attributes 70-80 Attributes ~ 25 attributes Pointer to Price Product Name Weights Dimensions food ingredients * * * * Nutritional information * * * Regulatory Requirements Chemical Ingredients * * * * Sustainability * * * * Social Compliance Information * * * * If we want accurate data… we must either find a way for GTIN changes to flow seamlessly though the Value Chain or we must build new capability Copyright © 2014 Accenture. All rights reserved. 4 Current options for communicating digital information at the “product variant level” are costly and inefficient Maintaining the GTIN allows inaccurate information to permeate the value chain … … changing the GTIN disrupts the supply chain and triggers non-value added costs … Eroding consumer trust, and ultimately undermining brand value … Manufacturer Lost revenues estimated at 2-4 weeks on average or 4-8% of sales due to out-of-stocks … This challenge will simply get worse, Unintended distribution voids in the range of 5-10% of locations as demand for information increases Cost avoidance opportunity $7-10 billion Additional costs due to remnant inventory, replenishment and commercial fees Source: GS1 Copyright © 2014 Accenture. All rights reserved. Retailer Administration costs due to new item set up estimated to increase by 2-3% 5 By building new capabilities to embed more information into more advanced data carriers… Information strategy Data Item Product Variant Number 50+ use cases… Use Case: Supply Chain/Distribution (B2B) (#2)Lot-level inventory management Value Chain Segment: Supply Chain/Distribution (B2B) Process: Use Case: Manage InventorySupply Chain/Distribution (B2B) (#2)Lot-level inventory management SCD-2 Group: 1 SCD-2 Value Chain Supply Chain/Distribution (B2B) Group: 1 Data Requirements Description Segment: Use Case: management SCD-2 As a… Manufacturer Data item Used? How used? Manage InventorySupply Chain/Distribution (B2B) (#2)Lot-level inventory Process: I can use Lot No to accurately identify embargo specific lots within my inventory Valueand Chain PVN Supply Chain/Distribution (B2B) Group: 1 Data Requirements Description Segment: Lot # x management Use Case: SCD-2 As a… Manufacturer Data item Used? How used? Manage InventorySupply Chain/Distribution (B2B) (#2)Lot-level inventory Process: Reduced overall riskIofcan defective the supply chainand (andembargo reduce the specific cost of identification/ use Lotproduct No toentering accurately identify lots within my inventory Expiry Date s Value Chain PVN Supply Chain/Distribution (B2B) embargo) when there are product quality or other issues Group: 1 Data Requirements Description Segment: Serial # Lot # x management Use Case: SCD-2 As a… Manufacturer Data item Used? How used? Manage InventorySupply Chain/Distribution (B2B) (#2)Lot-level inventory Process: PVN Reduced overall riskIofcan defective the supply chainand (andembargo reduce the specific cost of identification/ use Lotproduct No toentering accurately identify lots within my inventory Expiry Date s Value Chain PVN Supply Chain/Distribution (B2B) embargo) when there are product quality or other issues Group: 1 Data Requirements Description Segment: Impacts Derived Serial # Lot # x management Use Case: SCD-2 Score Description of impacts As a… Manufacturer Data item Used? How used? Manage InventorySupply Chain/Distribution (B2B) (#2)Lot-level inventory Process: PVN Reduced overall riskIofcan defective the supply chainand (andembargo reduce the specific cost of identification/ People use Lotproduct No toentering accurately identify lots within my inventory Expiry Date s Value Chain PVN Supply Chain/Distribution (B2B) or other issues Group: 1 Processes Impacts Derivedembargo) when there are product qualityDescription Data Requirements Segment: Serial # Systems Lot # x management Use Case: SCD-2 Score Description of impacts As a… Manufacturer Data item Used? How used? Manage InventorySupply Chain/Distribution (B2B) (#2)Lot-level inventory Process: PVN Reduced overall riskIofcan defective the supply chainand (andembargo reduce the specific cost of identification/ People use Lotproduct No toentering accurately identify lots within my inventory Expiry Date s Value Chain Benefits Derived PVN Supply Chain/Distribution (B2B) embargo) when there are product quality or other issues Group: 1 Data Requirements Description Score ProcessesDescription Segment: of impacts Impact Impacts Derived Serial # Systems Lot # x management Use Case: SCD-2 People Score Description of impacts As a… Manufacturer Data item Used? How used? Manage InventorySupply Chain/Distribution (B2B) (#2)Lot-level inventory Process: PVN Reduced overall riskIofcan defective the supply chainand (andembargo reduce the specific cost of identification/ Processes Benefits Derived People use Lotproduct No toentering accurately identify lots within my inventory Expiry Date s Value Chain PVN Supply Chain/Distribution (B2B) embargo) when there are product quality or other issues Group: 1 Systems Data Requirements Description Segment: Score ProcessesDescription of impacts Impact Impacts Derived Serial # Systems Lot # x management Use Case: People Score Comments Description of impacts As a… Manufacturer Data item Used? How used? Manage InventorySupply Chain/Distribution (B2B) (#2)Lot-level inventory Process: PVN Reduced overall riskIofcan defective the supply chainand (andembargo reduce the specific cost of identification/ Processes Benefits Derived People use Lotproduct No toentering accurately identify lots within my inventory Expiry Date s Value Chain PVN Supply Chain/Distribution (B2B) embargo) when there are product quality or other issues Systems Data Requirements Description Segment: Score ProcessesDescription of impacts Impact Impacts Derived Serial # Systems Lot # x People Score Comments Description of impacts As a… Manufacturer Data item Used? How used? Manage Inventory Process: PVN Reduced overall riskIofcan defective the supply chainand (andembargo reduce the specific cost of identification/ Processes Benefits Derived People use Lotproduct No toentering accurately identify lots within my inventory Expiry Date s PVN embargo) when there are product quality or other issues Systems Data Requirements Description Score ProcessesDescription of impacts Impact Impacts Derived Serial # Systems Lot # x People Score Comments Description of impacts As a… Manufacturer Data item Used? PVN Reduced overall riskIofcan defective the supply chainand (andembargo reduce the specific cost of identification/ Processes Benefits Derived People use Lotproduct No toentering accurately identify lots within my inventory Expiry Date s PVN embargo) when there are product quality or other issues Systems Score ProcessesDescription of impacts Impact Impacts Derived Serial # Systems Lot # x People Score Comments Description of impacts PVN Reduced overall risk of defective product entering the supply chain (and reduce the cost of identification/ Processes Benefits Derived People Expiry Date embargo) when there are product quality or other issues Systems Score ProcessesDescription of impacts Impact Impacts Derived Serial # Systems People Score Comments Description of impacts PVN Processes Benefits Derived People Systems Score ProcessesDescription of impacts Impact Impacts Derived Systems People Score Comments Description of impacts Processes Benefits Derived People Systems Comments URL SCD-2 Group: 1 How used? Expiry date s Score ProcessesDescription of impacts Systems People Processes Benefits Derived Systems Score Description of impacts Impact People Processes Systems Impact Comments Comments Lot Number Serial Number Copyright © 2014 Accenture. All rights reserved. 6 … Industry can ensure information accuracy, enhance consumer trust and protect and create value More information GTIN plus Product Variant Advanced data carriers SHORT TERM Copyright © 2014 Accenture. All rights reserved. Web URL Expiry Date GS1 DataBar Lot Number Serial Number GS1 QR Code or GS1 DataMatrix LONGER (8-10 years) TERM 7 Building capability and enabling choices Key next steps • GS1 to create global standards and guidelines • Trading Partner Alliance to lead US planning for implementation Copyright © 2014 Accenture. All rights reserved. 8 For each data item, there are issues and opportunities to consider in the next steps DataBar implementation journey Product Variant Top manufacturer priority to manage “hard” and “soft” conversions and provide consumers with accurate information. PVN Allocation Rules need to be established, GTIN Allocation rules need to be refreshed in this new context Interesting capability but requires larger space – Could be an important capability within the US “Consumer Information Transparency Initiative” as an alternative to using a URL embedded in a GS1 QR Code Web URL Expiry Date Top retailer priority. Already in production in meat and some dairy categories. Need to set pragmatic expectations. Parameters being established. Dynamic printing limited to line speeds up to 120 ppm. Two large retailers will put “artwork based codes” out of short term scope Little interest here due to pragmatic issue of dynamic printing capability Lot Number Serial Number Copyright © 2014 Accenture. All rights reserved. 9 GS1 Standards work: Impacted Standards 1. Package Variation Number as GS1 Application Identifier (data in a bar code or tag) 2. Create PVN Allocation Rules and Refresh GTIN Allocation Rules in context of the new capability Copyright © 2014 Accenture. All rights reserved. 3. Review of AIDC Rules • AIDC Validation • Human-Readable Interpretation (text associated with bar code) • Managing Multiple Bar Codes • Symbol placement 4. Updates to GS1 AIDC Application Standard: B2C Extended Packaging 5. In parallel with #4, work with the Open Mobile Alliance (OMA) to ensure GS1 requirements for smartphones are supported and aligned 6. GDSN approach to PVN 7. GS1 Source use of PVN 8. eCom PRICAT message 10 It is proposed that TPA project be established to assess if / when / how to accelerate adoption of the GS1 DataBar Why the GS1 DataBar … GS1 DataBar – Can carry more information than the current EAN/UPC – Proven technology in use today in many markets – Can be read by most existing POS scanning technology – Can hold the GTIN supply chain information constant and change the variant component for “soft” conversions – Enables new capability in the near term What about the EAN/UPC … – Companies can stay with EAN/UPC if GTIN alone meets their information needs – Future POS scanners expected to be backward compatible … as a means to enable new capability in the near term and provide industry with a CHOICE on how to support the needs of today’s consumer Copyright © 2014 Accenture. All rights reserved. 11 Reason to believe US Case Study – DataBar journey with Coupons • DataBar was launched in 2006 and approved (by the GS1 US Board) for Coupon use in 2008 .... But nothing happened until..... • US INDUSTRY set a Jan. 2010 Sunrise date for use on Coupons Today….in the US…. • ~80% of coupons have only a DataBar • ~10% carry a DataBar and a EAN/UPC • ~10% still meet all their needs with a EAN/UPC • Retailers can read the coupon code embedded in the DataBar (some might be entering the human readable code) • About 40% of retailers process the expanded coupon information beyond the coupon code because they get value from that information The GS1 Board approved DataBar for use on consumer goods at Point-of-sale in 2014 .... But nothing will happen unless INDUSTRY sets a sunrise date Copyright © 2014 Accenture. All rights reserved. 12 GS1 DataBar Kroger Future Vision February 2013 GS1 DataBar It carries GTIN + dynamic data and this matters for Fresh Foods It scans at retail Point-of-Sale Global sunrise timing 2014 © 2012 GS1 DataBar has finer resolution than GS1 128 (case barcodes) 14 The Business Case / Benefits • Efficient management of short shelf life products • • robust data by store & product line prevent sale of expired product • Real-time inventory control: • improved yield management • reduced product wastage • price markdowns • Enhanced recall process © 2012 GS1 DataBar & Freshness Applications • Dairy – tool to reinforce freshness performance by store. • Fresh Departments – tool to track freshness sales by item & store. • Meat & Deli – tool to track sales vs production (to the second). • Grocery – tool for suppliers to improve freshness performance 16 GS1 DataBar Deployment in Fresh Foods South Korea Japan Hong Kong = country implementing = country planning pilot(s) GS1 expanded stacked barcodes in Kroger Kroger DataBar 101 Tool to improve fresh performance in stores 1. Code date included in the barcode Dairy example – dairy plant – Point of Sale (POS) functional today – Other systems under development 2. Dairy & Meat pilots underway since 2012 3. Working to expand in 2014 with Kroger Manufacturing and 3rd party suppliers Meat example – store scale Future vision = if an item has an expiration date visible to the customer, it should have DataBar “stop sale” message at Kroger register for expired product 18 Kroger Dairy Operations print, scan, apply DataBar printed during production 19 Current Challenges to Expansion • Production Capability – development & equipment costs • Line speed – current print speed in the 100-120 per minute range • Broad adoption - of GS1 DataBar by food retailers & suppliers. © 2012 GS1 20 Evaluation: Suppliers (with inline printing capabilities) Note: Based on replies of suppliers to a letter of the SVP Commerce AH Out of scope are suppliers that do not print barcodes inline, meaning they receive packaging material with preprinted barcodes. These are out of scope since: - investments to implement in-line printing capabilities are far higher - production speed is reduced drastically by moving from off-line to inline printing 21 21 Thank You [email protected] 513-762-1340
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