Technology And Operations Management,

transcript

Who is GS1?

Henry C. CoTechnology and Operations Management, California Polytechnic and State University

The Cost of Bad Data

CPG is one of largest sectors of business today. Includes over 25% of Fortune 500 companies and accounts for well over $1 trillion in revenues annually.Critical to the industry is the dynamics between consumer goods manufacturers and the retailers.

It’s All About the Data

Sterling Committee, “Data Synchronization: From Compliance to Collaboration – An Essential Guide to Understanding Your Opportunity,” Whitepaper, 2004, http://www.sterlingcommerce.com

According to Cap Gemini Ernst & Young (CGE&Y), the impact of out-of-sync information within and between businesses in the retail supply chain is an average of 1-3 percent of supply chain performance.

Cost of Bad Data 5

Cost of Bad Data According to A.T. Kearney

$40 billion or 3.5% of total sales lost each year due to supply-0chain information inefficiencies

30% of item data in retail catalogs have errors; each error costs $60-$80 to correct

25 minutes of manual cleansing per SKU per year

http://www.hammer.net/subpage.asp?template=/template.asp?menu%3D476

Cost of Bad Data 6

60% of all invoices generated have errors; 43% of all invoices result in deductions; each invoice error costs $40 - $400 to reconcile

More than 40% of all invoices result in deductions.

Average of 6 weeks to roll-in a new product – largely due to inefficient and error-prone approaches for exchanging and updating new item information in buyer and seller systems.http://www.hammer.net/subpage.asp?template=/template.asp?menu%3D476

The Push for Synchronization

Major companies in merchandizing, CPG/grocery, hardlines, chain drug, office supply, and others are mandating that their suppliers implement data synchronization.

GDS – Process of establishing and maintaining consistent, accurate information within and between businesses in the retail supply chain.

Information about items trading partners buy or sellInformation about the trading partners (contact information, store/warehouse locations, bill-to/pay-to data, etc.)

GS1 (Formerly EAN and UCC)

As part of a unified, global approach to standards development for the global supply chain…

EAN International becomes GS1 (May ‘03)UCC becomes GS1 US (Feb ‘03)

Cost of Bad Data 10

Worldwide standards for unique product and company identification

Standards for global data synchronization

Who is the UCC?

The Uniform Code Council97 Member Organizations Around the World

Cost of Bad Data 12

The Uniform Code Council The Global Language of Business ®

Founded 1974 (30 years experience working with business)

Experienced organization - ~ 175 employees with extensive experience in: XML, EDI, Business Process Modeling, Physical identification (barcode & RFID), Standards development and management

280K members and growing Accredited not-for-profit standards

organization ISO & ANSI Voluntary

Membership Drivenhttp://knownet.hhs.gov/acquisition/D2-5cEGov(UniformCodeCouncil).ppt

Cost of Bad Data 13

Globally recognized Standards Management Process (GSMP)

Top down development of multi-industry standards based on Business Processes

Simpl-eB CPFR®

Rapid Process Development (RPD) Standards development slashed from 12

months to 3 months

Cost of Bad Data 14

UCC’s Internal Support Staff Identification Experts (Bar Codes, Scanning,

RFID) Business process experts Customer Service facility

~100,000 calls annually Implementation support

Interoperability & Compliance testing Promote the value of standards to industry eCommerce expertise

EDI Support XML Standards

http://knownet.hhs.gov/acquisition/D2-5cEGov(UniformCodeCouncil).ppt

Cost of Bad Data 15

UCC Mission

To take a global leadership role in establishing and promoting multi-industry standards for collaborative commerce

The goal is to enhance efficient supply chain management, thus contributing added value to the customer

Key Goals of UCC Provide strong foundation of open and global standards Reduce supply chain costs Create fast and seamless data exchange by removing

e-business bottleneckshttp://knownet.hhs.gov/acquisition/D2-5cEGov(UniformCodeCouncil).ppt

Cost of Bad Data 16

Overview UCC

Jim Petragnani, “EAN.UCC System Update,” PowerPoint Presentation, Aftermarket Council on Electronic Commerce, August `2, 2004.

Who is the EAN?

European Article Number, International99+ EAN Member Organizations

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EAN INTERNATIONAL MISSION :

To create and drive the worldwide implementation of standards to improve the supply and demand chain

ROLE: Develop global, open, multi-sectorial standards, Train and educate on the standards, Promote and help to implement standards, thus

facilitating best business solutions. OBJECTIVE:

To be the number 1 Standards’ Organization in the world for the management of supply and demand chains.

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EAN INTERNATIONAL: Product & Services

These are our Global Product & Services : Bar Codes E-business (EANCOM & EAN.UCC-XML) Global Data Synchronization Network Global Registry Global Product Classification Electronic Product Code Traceability Solutions

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One Million Members ● Over 100 Countries ● 23 Industries

99+ EAN Member Organizations

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Industries Using EAN.UCC StandardsApparelAlcoholic BeveragesAutomotiveBuilding SuppliesChemicalsFood & BeveragesFoodserviceFurnitureGeneral MerchandiseHealth / Beauty CareHousewaresInformation Technology

Industrial ProductsJewelryLeisure IndustriesMusic ProductsPharmaceuticalsGovernmentPublishingTelecommunicationsTransportationUtilitiesVideo Products…and others

What are EAN.UCC Standards?

Identification NumbersData Carriers

http://www.cpfr.org/BHoganUCCnet_CPFR.ppt

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Strong legacy in Identification Numbers

GTIN - Trade Items GLN - Locations SSCC - Logistics Identifier GIST - Instance Identifier GIAI - Individual Assets GRAI - Returnable Assets GSRN - Service Relations

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Relationship of Identification Numbers GTIN / GLN to identify a product’s supplier GLN / GLN to identify the hierarchy of legal,

functional, and physical entities

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Strong legacy in physical ID to tightly link the flow of physical products to information flow Physical Products

Bar Codes EAN/UPC UCC/EAN-128 RSS Composite - 2D

RFID: GTAG - Open Standard RFID The Future: ePC (MIT Auto ID Center)

Cost of Bad Data 26

Information Flow EDI – ANSI x.12

UCS VICS Industrial Commercial

XML – based on business process that assumes data synchronization occurs outside the business process (e.g. – UCCnet)

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Ecommerce

SUPPLY CHAIN

MANAGEMENT

RFIDRFID

GTINGTIN

GLNGLN

RSSRSS EAN/UCC 12

Identification Numbers

Data Carriers

EAN•UCC Core Technologies The EANUCC system provides an integrated suite of

standardized tools that enable effective management of supply chains

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UCC’s Global Supply Chain

Mfg Item Case Pallets Trucks Distributor Trucks Pallets Case Item Destination Mfg Item Case Pallets Trucks Distributor Trucks Pallets Case Item Destination UserUser

212345 6789072 212345 6789072

Source

Data Structure

Application Identifiers= GTIN, SSCC, Dates, Weights, Lot Numbers, etc.

Physical Data Carrier = Symbology or Bar Code

( 01) 9 0 614141000418 ( 15) 991225 ( 3202) 000356 ( 21) VR900389

GTIN, GLN, PO, planning, payment, sales, etc.

GTIN, GLN, shipping, invoice

Information Data Carrier = EDI or XML

Cost of Bad Data 29

10,000s 100,000s1,000s0

Community Size

Interoperability

Registry

Data Sync

EDIINT

Middleware

Standards

•Global B2B

•Small & Large Cos.

•Internet Based

•Multi-Sectoral

•Collaborative

Path to the FutureAchieve maximum

return with maximum

community size

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• Logistics – Serialized Shipping Container Code (SSCC)

• Products – Global Trade Item Number (GTIN)

• Assets – Global Individual Asset Identifier (GIAI)

• Locations –Global Location Number (GLN)

• Relations –Global Service Relation Number (GSRN)

• UCC: Links physical assets and logistic units with the flow of electronic messages

Each of these is a key to data

EAN.UCC Keys Identify …

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EANEANUCC: Proven Supply Chain ManagementUCC: Proven Supply Chain Management

Purchase Order, ASN, Invoice, Assets,

Electronic Commerce

Supply Chain Starts Supply Chain Ends

UCC links physical assets and logistic units

with the flow of electronic messages

Physical Flow

Information Flow

UCC provide

s the Link

212345 6789072 212345 6789072

Mfg. Case Pallet Truck Hospital Truck Pallet Case Asset DoctorAsset

Cost of Bad Data 32

GS1 Global Vision

Act As One Organization or

Become One Organization

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Background Name Confusion Organizational Issues Financial Issues

Cost of Bad Data 34

One World. One System. One Global Language of Business

BUT A ZOO OF NAMES…… UCC (USA) e-centre (UK) Gencod (France) CCG (Germany) DCC (Japan) EAN Russia …

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One World. One System. One Global Language of Business BUT POOR EXTERNAL IMAGE …..

Poor Customer Focus Limited Business Leadership Speed to the Market Focus on Local vs. Global

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NAME CHANGE One World. One System One Global Language of Business

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NAME CHANGE PROPOSAL To change all the EAN names to GS1

followed by the country name :

GS1 US GS1 UK GS1 France GS1 Japan …

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EAN General Assembly approved it in May ‘2003

UCC Board of Governors has just approved to change UCC to GS1 US (Feb. 3rd, 2004)

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Reasons For Change To communicate we are a single

Global Standards organization that covers over 141 countries

To re-launch our image with new attributes (customer focus, leadership and innovation)

To increase our awareness on key targets : C’s levels (CEO’s, COO’s, CIO’s, etc.) Top functional levels (VP’s IT, Supply, F&A,

Sales)

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Why Now ? Leverage momentum of EAN and UCC

single leadership Take advantage of the positive

attributes (leadership, innovation) projected by our new systems (e.g. EPC, GDSN)

Take advantage of the ample media coverage given to our new systems

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Documented Benefits of Early Adaptors

3-5% reduction in shelf out-of-stocks 2 weeks reduction in speed to market

for new items. i.e., 14 extra days sales of faster-moving items.

10,000 to 30,000 hours saved in store labor.

5,000 to 10,000 hours saved in merchandizing and data entry time dealing with new item introductions and updates.

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1,000 to 2,000 hours saved in finance time dealing with invoice disputes related to basic item information.

Reduction in invoice auditor fee. Up to 1 percent reduction in inbound

freight costs. 1,000 to 2,000 hours saved in

warehouse and DSD time dealing with item discrepancies.

1% reduction in inventory.