Description
The Global Standards Management Process (GSMP) is the global process established initially by Global Commerce Initiative (GCI) and continued by GS1 for the development and maintenance of global standards and implementation guidelines, which are part of the GS1 System.
Chapter 10
© 2012 Popa, licensee InTech. This is an open access chapter distributed under the terms of the Creative
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Global Standards for Supply Chain Management
in Consumer Packaged Goods Industry
Virgil Popa
Additional information is available at the end of the chapterhttp://dx.doi.org/10.5772/50100
1. Introduction
The Global Standards Management Process (GSMP) is the global process established
initially by Global Commerce Initiative (GCI) and continued by GS1 for the development
and maintenance of global standards and implementation guidelines, which are part of the
GS1 System.
The Global Standards (GS) is a comprehensive set of methods and rules allowing the user
community and affected industry groups to submit and influence the creation and
maintenance of globally agreed standards and guidelines. Since the needs of the community
as a whole and the vertical industry groups are constantly changing, the GSMP structure
needs to reflect changes to allow maximum process efficiency.
The Efficient Consumer Response (ECR) movement, Voluntary Interindustry Commerce
Standards (VICS) and other industry associations have developed Global Standards and
Best Practices for CPG (FMCG) industry based on collaboration. These include for example
Category Management and Collaborative, Planning, Forecasting and Replenishment
(CPFR). To date the industry has struggled to implement these processes widely. A
standards based foundation brings: Scalability (expansion from a pilot to an enterprise-wide
solution); Portability (roll-out across internal divisions and regions); Affordability (increase
in scale without proportional increase in cost) to these processes. [1]
Emerging technology brings new e-business and e-service opportunities to the marketplace.
e-Procurement, e-auctions and e-communication over the internet through XML will all be
more efficient if developed on a common standards based platform. If international
manufacturers, retailers and solution providers (including exchanges) are forced to support
a myriad of local ‘standards’ then the incremental cost incurred will impact the entire
supply chain, including national players.
Globalization – Education and Management Agendas 234
The Global Commerce Initiative established the Global Upstream Supply Initiative (GUSI)
in order to provide a standard framework for consumer goods manufacturers and their
suppliers of ingredients, raw materials and packaging to better integrate across a number of
supply chain processes.
Without Internal Data Alignment, for example, Global Data Synchronization (GDS) will
definitely not improve business performance and will, in fact, magnify the negative impact
of poor quality data. What’s more, collaborative initiatives such as those included in
Efficient Consumer Response (ECR) and Collaborative Planning, Forecasting and
Replenishment (CPFR) will not be economically deployable on a wide scale without the
consistently accurate and available information that will result from an Internal Data
Alignment program.
GDS is based on a global network of data pools, or electronic catalogues, which are all inter-
operable and compliant with the same business requirements and standards.
Interoperability means that a manufacturer can publish a product and partner data on one
single Data Pool without having to worry about the fact that customers may select different
Data Pools to access the data.
The need for an internal organization
The success of Global Standards, and therefore the realization of the benefits, will come
through achievement of critical mass. Widespread adoption, though, does not mean that
companies cannot gain competitive advantage through optimal implementation of standards.
Leading companies that strive for this position have aligned relevant internal functions and
processes with the external standards development and management environment and are
building standards implementation into their internal business processes.
It is clear that standards development requires business involvement. Industry
representation is critical. Leading businesses understand this and engage with the standards
process.
In addition to working with the GS1 - GSMP and with GCI, most major manufacturers and
retailers engage with trade associations such as Association Internationalle de Marque
(AIM), CIES – The Food Business Forum, Food Marketing Institute (FMI) and Grocery
Manufacturers Association (GMA), and with associations such as the regional and national
ECR and GS1 organizations. Most companies do not co-ordinate their activity across these
bodies allowing regional or national managers to engage with a regional or local perspective
rather than a global perspective.
Lack of alignment of these activities in a global company results in inefficient use of
resources, duplication of activity and confusion within and outside the organization.
Companies that have coordinated across these activities report increased efficiency (a
reduction in the resource applied against these activities) but coupled with a significant
increase in effectiveness. Less people doing a better job.
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 235
The GS1 Business Plan includes expansion of the GS1 System into targeted sectors. In order
to accommodate new sectors, GSMP must balance the need for individual sector needs with
a consistent overall process. In terms of recognition and governance, the GSMP allows the
formation of a User Group for a specific sector based on the GS1 Business Plan.
The Nestlé GCI/GSMP network
Nestlé implemented a GCI/GSMP internal network to co-ordinate the approach to standards
development and drive the standards implementation. The organization is built around 4
units: One Expert Network per subject; Subject Matter Owner; Central coordination role;
Nestlé GCI/GSMP Steering Group.
Nestlé created an Expert Network for each subject in which they are involved in GCI/GSMP
working groups. In general, the Experts could be anyone, who is working on the respective
subject. They contribute their subject knowledge during standards development and
communicate the decisions made back to their base (e.g. Market, Regional Center).
2. Overview of Global Data Synchronization (GDS)
2.1. Information sharing in the supply chain
Information sharing can address three key areas in a product life cycle: Greater sharing of
information about consumer trends and market trends between trading partners can lead to
greater insights into consumer behavior, enabling both partners to better serve the
consumer. Sharing information about real demand between two trading partners can enable
the development of products that better meet consumers’ needs. Sharing of accurate, real-
time operational information between the two trading partners can lead to better use of
assets in the supply chain. This can improve product availability and consumer satisfaction
at the point of purchase. Accurate information is the basis of any commercial enterprise.
This is particularly true in the fast-moving, quick-response world of manufacturing and
retail. [2]
New ways of working together is about developing new ways for vertical trading partners
to work together – including sustainable changes in culture, collaborative business planning
and new measures and rewards. For a bilateral trading partner relationship, it offers an
integrated roadmap for getting alignment and commitment on four key strategic choices in
the collaboration of trading partners, which can ultimately lead to more satisfied shoppers
and the elimination of waste, both of which should, in the end, produce better business
results.
Some of the changes that need to be made with regard to information sharing will affect the
whole industry; others will be bilateral arrangements between individual trading partners,
as each company finds out “what works for us”. The reforms needed are in systems, in
practice and in philosophy, and cover, for example, a common vision of the value to be
created by sharing information across participants in the value chain or changing the way
Globalization – Education and Management Agendas 236
data is exchanged. A GCI group worked on the development of data flows linked to the
process of new product introduction, identifying what the information needs would be in
2018, as well as possible solutions, like a POS data sharing platform. The group analyzed the
current situation and outlined the action needed to move the industry forward. A number of
group members are now working to establish pilots on information sharing across several
steps of the new product introduction process. [3]
2.2. Global commerce initiative vision for Global Data Synchronization (GDS)
Data synchronization is the process of sharing master data between trading partners (details
of materials for sale within a market). GDS is based on a global network of data pools, or
electronic catalogues, which are all inter-operable and compliant with the same business
requirements and standards. Interoperability means that a manufacturer can publish a
product and partner data on one single Data Pool without having to worry about the fact
that customers may select different Data Pools to access the data. A Global Registry controls
the flow of information within the network. Obviously , perfect alignment of Master Data is
a necessity to support advanced collaborative practices, but the effort of undertaking such a
project is worth it : exchange of master data through data pools is the most efficient and
reliable method to implement modern collaborative practices.
Strategic direction
To support and implement the GCI vision for GDS is the strategic direction formany
multinational companies. Under the Global Commerce Initiative was developed the first
truly global approach to Data Synchronization.
A known best practice in the area is always to collaborate with customers or suppliers with
confirmed GDS commitment while aligning internally to create the readiness for efficient
and effective large scale implementation of GDS, in terms of organization, processes, data
and systems.
Buyers and sellers would be able to focus on building sales rather than on correcting
misaligned information. When a new product is launched the data will be exchanged in a
seamless and streamlined way through the supply chain, allowing the right amount of
goods to become available at the right place and at the right time – and faster!
This is the vision that GDS enables through providing the fundamental infrastructure for the
seamless flow of product information through the supply chain.
This GDS vision is delivered by the GDS Network. The network (Figure 1.) consists of:
? Interoperable, certified Data Pool,
? A Global Registry; provided by GS1,
? A set of EAN.UCC Standards (European Article Numbering – United Code Council),
ensuring that all supply chain partners use common product descriptions and
classification and the same message structures to exchange the data.
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 237
Source: An integrated view of the Global Data Synchronization network on the Electronic Product Code Network, GCI
and IBM, 2004 [4]
Figure 1. GCI vision for GDS
These elements of the GDS Network collectively support the synchronization of product
data between trading partners.
The GS1 Global Registry and the interoperable Data Pools are at the heart of the GDS
process. Their roles and functions are distinct but complementary. The key role of the GS1
Global Registry is to ensure that original data is registered once, at one place. Data Pools
provide for the publication of certified standard data and subscription to this data.
The Network works with the following principles:
? The GS1 Global Registry and the Data Pools will be EAN.UCC certified,
? There is interoperability among all Data Pools and the GS1 Global Registry,
? One single point of entry into the Network by all participants,
? Only the Data Pools will communicate with the GS1 Global Registry,
? Only GDS EAN.UCC Business Messages will be used within the Network.
2.3. Master data synchronization
Master Data Synchronization (or alignment) through data pools
is recognized as the most
efficient way to support the master data sharing between trading partners. The benefit of
data pools is that the use of their services mandates the adoption of standards. The
development of most national data pools in the world are claimed to be based on GS1
standards such as the Global Trade Item Number (GTIN) for the unique identification of
items, GS1 messages such as PRICAT and PARTIN, etc. Although many data pools support
GS1 standards, their development appears having been mainly focused on national
2. The Data Pool registers a product in the GS1
Global Registry and sends very basic
information about the item.
3. The GS1 Global Registry holds this basic
information about all items and the location of each
items’ source Data Pool.
1. A manufacturer will:
• Align data internally
• Prepare data for external
publication in line
with EAN.UCC
standards
• Publish item information
to the source Data
Pool
• Synchronize changes to
this date
• Approve retailer requests
to subscribe to date.
4. A retailer will:
• Search the GS1
Global Registry, via a
selected Data Pool, for
an item (by GTIN or
by description) – the
Registry returns the
details of the items to
the Data Pool
• Request subscription
to manufacturer data
• Receive data and any
subsequent changes
• Align data with
internal data.
5. The trading partners
synchronise the item
information between
their respective Data
Pools.
6. The same process
applies for synchronising
Party information,
published by manufacturer
or retailer, based on the
GLN.
Registry
Manufacturer
Retailer
Data
Pool
Data
Pool
Globalization – Education and Management Agendas 238
requirements. This has led to the implementation of different structures and designs. In
order for global data synchronization to be viable, data pool inter-connection and inter-
operability is essential.
Key business components and requirements of the global data synchronization process are:
? Leveraging data pools in order to benefit from the potential they offer,
? The registration of all items and locations to facilitate sharing of master data,
? The implementation of standardized information flow to support the data registration
and synchronization.
In order to meet these requirements, the following is needed:
? Implementation of a Global Registry to control the registration of items and locations,
? Amendment and further development of data pools in order to comply with the GCI
specifications (master data dictionary (GCI / Data dictionary), rules, principles,
synchronization process, etc.),
? Development and implementation of standardized messages between data pools and
the Global Registry,
? Development and implementation of standardized messages between data pools and
users (companies) based on the GCI / Data dictionary,
? Establishment of a Neutral Body for the governance and certification of the Global
Registry,
? Establishment of a Neutral Body for the Technical Certification of data pools.
The initial implementation of the GDS vision is focused around Master Data for ‘Item’ with
‘Location’ intended to follow soon after. Master Data is the set of data describing the
specifications and structure of each Product (or Item) and Location (or Party) involved in
Supply Chain Processes, based on the key identifiers, the Global Trade Item Number (GTIN)
and the Global Location Number (GLN).
The Master Data is an Information Alignment that can be divided into Neutral and
Relationship Dependent Data.
Neutral Data is that which is generally shared between multiple parties and which is
Relationship Independent. This can be split into three categories:
? Core Product Data – Core Data Attributes that apply to all instances of any product (e.g.
description, brand name, packaging, dimensions, etc),
? Category Specific Data – Data Attributes that only apply to specific product categories
(e.g. the color, grape and strength of a bottle of wine),
? Target Market Data – Data Attributes that are specific to product in a particular market
(e.g. packaging indicators in a specific country).
Relationship Dependent Data – Data Attributes that concern all terms bilaterally agreed and
communicated between trading partners such as marketing conditions, price information
and discounts, logistics agreements and more.
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 239
2.4. Global Upstream Supply Initiative (GUSI)
The Global Upstream Supply Initiative (GUSI) was formed to define a common way for
manufacturers of consumer products and their suppliers to provide tighter integration of their supply
chains, without the need for costly and time-consuming IT integration projects with every customer
or supplier. The UIM (Upstream Integration Model) developed by GUSI comprises a set of agreed
business processes and information flows supported by electronic message exchange based on GS1
standards.[6]
The GUSI Working Group first established an Upstream Integration Model (UIM), which
defined a number of standard business processes and information flows for different
scenarios. These scenarios covered different situations where consignment stock was or was
not involved and covered the case where the manufacturer initiated the order (Traditional
Order Management) or where the supplier initiated the order (Supplier Managed
Inventory).
In both cases, greater supply chain integration is achieved by improving visibility of both
inventory and demand throughout the supply chain.
The GUSI Working Group decided to adopt the GS1 XML message standards to
exchange information between the trading partners in support of these supply chain
processes.
It is important to highlight that each business case must be tailored to the actual situation
depending on the individual supplier and manufacturer, the industry, the products, etc. The
starting point for the companies will also be different. The business case for companies that
have already invested in collaborative supply chain solutions will focus on the cost to adopt
the GUSI model vs. the benefits gained from extending their collaboration community,
while the case for a company introducing collaborative solutions for the first time will focus
on the initial investment vs. the benefits gained from collaboration based on the GUSI
model.
The potential benefits can be categorized as:
? Hard benefits (tangible),
? Likely benefits (quantified) (tangible),
? Qualitative benefits (non-tangible),
? Stretched benefits (non-tangible).
Tangible benefits are those associated with a monetary saving, e.g. from collaboration which
can give reduced inventory, material cost reduction, reduced errors, optimized production
planning, reduced paper handling (e.g. e-billing) etc.
Non-tangible benefits refer to all those that cannot directly be put into monetary terms,
e.g. improved data quality, increased flexibility and reliability towards customers.
Although difficult to quantify, intangible benefits can be significant and add weight to an
ROI study [5].
Globalization – Education and Management Agendas 240
2.5. Business rationale
The current situation in the upstream supply chain of the CG industry is that all
manufacturers and suppliers are faced with different business processes and data
interchanges when they move into more integrated relationships. Different business
processes and approaches create a barrier to the scalability of integration efforts whilst also
imposing many costs: the time and money spent making transactions; the delays caused by
the need for corrections; plus inevitable information gaps and misunderstandings. Both
parties should obtain benefits from integration, among them improved visibility of demand
and demand changes and reduced inventory. Today, to access these benefits, each program
between manufacturer and supplier has to establish its own framework for process
definitions, item and location coding and in many cases message content. This is both a
wasteful process and in itself presents a significant barrier for scaled adoption. For example,
integrated suppliers consists in the challenge to integrate with multiple manufacturers, each
one with its own definition of the above factors. The existence of a framework based on
industry standards overcomes the described barriers and:
2.6. Integrated suppliers
The working group has taken into account existing standards and work undertaken by
previous projects. In particular it has built on work sponsored by ECR Europe.
The ECR “Integrated Suppliers” report summarized the concept of ‘Integrated Suppliers’
as follows: “Integrated Suppliers is a concept for improving the part of the supply chain between
manufacturers and the tiers of suppliers of ingredients, raw materials and packaging. By sharing
information both parties are able to exercise judgment on costs, quantities and timing of
deliveries and production in order to stream line the production flow and to move to a
collaborative relationship.” [7] Where the ECR report was about the ‘supplier driven’
continuous replenishment processes (supplier recommends the order to the
manufacturer) it did not include ‘manufacturer driven’ ordering processes. The UIM
covers both aspects and covers more elements that can be improved in the
manufacturer/supplier relationship - for example, next generation electronic data
exchange based on exception management.
2.7. Case for using existing GS1 item and location coding standards
A significant change proposed is that manufacturers and their suppliers should adopt the
GS1 standards for item and location coding to create a common coding system across the
supply chain - downstream as well as upstream. It is felt that the time is right for this move
given that:
a. There is strong manufacturer commitment to the GS1 standards;
b. There is an increased manufacturer momentum to build automated solutions that will
scale;
c. There is increasing supplier awareness of the inefficiencies of the existing methods;
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 241
d. There are new technologies expected over the next few years that will be based on
existing GS1 standards. By adopting the existing standards, suppliers will be able to
migrate to these new technologies. An example is the emerging use of Radio Frequency
Identification (RFID). To use RFID companies will need to adopt the new GS1
Electronic Product Code (EPC) Network being developed. The EPC will provide a
coding structure for radio frequency tags enabling individual items or groups of
products to be tracked across the supply chain. The existing GS1 item-coding standards
are embedded in the new EPC structure. It therefore provides a good first step towards
new RFID-based solutions [6].
The main GS1 standards that suppliers and manufacturers should use are the:
? “Global Trade Item Number“(GTIN): a unique and international GS1 number is assigned
to each trade item or to a standard grouping of trade items. This number is known as
the GTIN. Each GTIN data structure is represented by a bar code symbol. This allow for
the identification numbers to be scanned for automated data capture and electronic data
processing.
? Global Location Number (GLN). Location numbers are a key concept in supply chain
management. A location number is a numeric code that identifies any legal, functional
or physical entity within a business or organization. The identification of locations is
required to enable an efficient flow of goods and information between trading partners
through electronic messages to identify the parties involved in a transaction (e.g. buyer,
supplier, place of delivery, place of departure).
2.8. The Upstream Integration Model (UIM)
The UIM and Information Alignment offer common business processes and data
interchanges to support upstream interoperability between manufacturers and suppliers.[6]
By engaging in such an integration effort, business partners wish to:
? Create value in the supply chain for mutual benefit,
? Apply practical solutions fitting the nature of their business,
? Share and synchronize data and processes,
? Co-manage the materials lifecycle through the definition of business rules,
? Apply industry standards,
? Push the concepts through the whole supply chain.
It has been designed to meet the major electronic communication needs in the following
business areas:
? Procurement,
? Material forecasting,
? Inventory management,
? Dispatch, Receipt & Consumption of Materials,
? Financial Settlement.
Globalization – Education and Management Agendas 242
By adopting this model manufacturers and suppliers will have a common language for the
processes and data interchanges within their electronic integration relationships. To achieve
this, the model contains very specific definitions of process terms, data exchanges and their
content. Adopting the model allows companies to translate their internal processes and
approaches into a common language that all other parties will be using. The UIM structure
creates a common set of definitions that all parties can use, whilst still allowing them to use
their own internal definitions and processes, possibly with a requirement to translate
internal information into the standard structure of the UIM.
The concept of the model is based on six building blocks, structured as per Figure 2 below:
Source: GUSI working group [6]
Figure 2. UIM Building Blocks
The UIM offers a collaborative approach to both supplier- and manufacturer- initiated
ordering processes and addresses the most common variants of them based on either a
manufacturer or supplier driven scenario.
3. An integrated view of the Global Data Synchronization network with
Electronic Product Code network
3.1. The EPCglobal network
RFID is a technology which allows an electronic ‘tag’ (a silicon chip attached to an antenna)
to transmit its unique identification number to nearby electronic ‘readers’. RFID tags are
used in a variety of applications from automated bridge toll payments to dog tracking. The
Auto-ID Center created the concept of a unique code EPC that can be stored on the ‘tag’ and,
once read by an RFID reader, the code can be used to ‘look up’ information about the tagged
item. Because a code uses very little chip memory the chips themselves can be very small
and, therefore, very low cost. This makes the tags suitable for ubiquitous deployment on
pallets, cases, inner packs, and even on individual consumer items.[4]
By using the RFID technology to increase the visibility of product movement and the EPC
code to facilitate off-product information storage, supply chains of the future will be able to
track objects in real-time through the total supply chain and the product’s lifecycle. The
increased visibility of pallets, cases, and items that the use of EPC technology can deliver
will offer numerous new opportunities for improving supply chain measurement,
performance tuning, and product collaboration. In order to take advantage of this product
visibility across multiple trading partners in a supply chain, there will need to be a secure
network for reliably sharing product information.
Integration
Agreement
Master Data
Alignment
Financial
Settlement
Demand &
Supply
Signals
Dispatch,
Receipt &
Consumption
Purchase
Conditions
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 243
The EPCglobal Network is an open, standards-based system that will facilitate the sharing of
unique product identification and tracking information among partners in the value chain.
The EPCglobal Network enables the secure storage and/or retrieval from other sources and
networks of the following information about each tagged object:
? Core Product Information: Things true for all products with the same GTIN. This is
identical to the Core Product Information in the GDS Network.
? Manufacturing Time Information: Things known about this pallet, case, or item at the
time of manufacture. Data elements such as ‘lot number’ and ‘expiration date’ are not
stored by the GDS Network and today are often only stored in the internal IT systems of
the manufacturer.
? Lifecycle History Information: The distributed track and trace details of the lifecycle of
a product. Data elements such as ‘date/time received in back of store’ are not stored by
the GDS Network and today are often only stored in the internal IT systems of the
various supply chain partners.
3.2. The link between GTIN and EPC Code
The GTIN (e.g. EAN13, UPC12, etc) and the EPC are standards based numbering schemes
for identifying items.
Source: [3]
Figure 3. Example of a GTIN used to build an EPC Code
The diagram shows a high level schematic of how a GTIN can be used to build a unique
EPC code.
Reference should be made to the EPCglobal Tag Data Specifications.
The GTIN is an umbrella term used to describe an entire family of EAN.UCC data structures for
trade items identification. The family of data structures includes the UPC (UCC-12), EAN.UCC-
13, EAN.UCC-8 and EAN.UCC-14. Items at every level of the trade item configuration
(consumer selling unit, case level, inner pack level, and pallet) require a unique GTIN.
The EPC is an identification scheme to uniquely identify an individual item. The difference
between the two is that a GTIN identifies a particular class of object, such as a particular
Globalization – Education and Management Agendas 244
kind of product or Stock Keeping Unit (SKU), but does not uniquely identify a single
physical object.
To ensure the continuity, but still being able to create a unique identifier for individual
objects using the GTIN, the GTIN is augmented with a serial number. The combination of a
GTIN and a unique serial number is called Serialised GTIN (SGTIN).
Other GS1 standards based numbering schemes can also be used to build unique EPC
codes.
The publicly available EPCglobal Tag Data Specifications give details on how to create 96-bit
EPC codes, which encapsulate existing industry numbering schemes such as:
? EAN.UCC Serial Shipping Container Code (SSCC
®
)
? EAN.UCC Global Location Number (GLN
®
)
? EAN.UCC Global Returnable Asset Identifier (GRAI
®
)
? EAN.UCC Global Individual Asset Identifier (GIAI
®
).
For other industries, it is intended that different numbering schemes will be used to build
the EPC to ensure minimal disruption and investment protection, while at the same time
ensuring that all EPC codes are globally unique. Today, in addition to consumer products
and retail, many industries are considering EPC adoption – including defense, aerospace,
pharmaceuticals, healthcare, logistics, airlines, chemicals, medical equipment, consumer
electronics and paper.
3.3. Electronic Product Code: RFID drives the next revolution in adaptive retail
supply chain execution
RFID-Based EPC Will Fail in Supply Chains Built on Inaccurate Data
The benefits promised by RFID-based EPCs can only be delivered if trading networks also
address the issue of inaccurate data that pervades today’s supply chains, especially in the
retail sector. There is little point in knowing that a case of goods with a particular EPC is
speeding its way through the system if you think it is toothpaste when it is actually
shampoo. Since the EPC is a GTIN-based number, synchronizing the meaning of the GTIN
during the order management process is critical to ensuring accurate fulfillment of that
order and downstream supply chain processes based on EPC scanning.[11]
Therefore, prior to the implementation of RFID readers and tags, all retailers and their
suppliers must adopt the single global data synchronization (GDS) vision being promoted
by the Global Commerce Initiative (GCI) and GS1. GS1, the standards organization for retail,
has not only developed a single standard for identifying products, the Global Trade
Identification Number (GTIN), but also an infrastructure—the Global Data Synchronization
Network (GDSN)—to allow the retail industry to share data more easily. When fully
implemented, GDSN will allow detailed data about products from any supplier anywhere
in the world to be accessed by any retailer anywhere in the world, through a network of
locally held databases of GTINs called data pools.
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 245
Source: [10]
Figure 4. GTIN and EPC in Supply Chain Synchronization
3.3.1. RFID (Radio Frequency Identification) and EPCs—The basic technology
RFID tags storing EPCs are a way to associate data with a physical product. Anyone
handling the physical item can (with the right technology) access the business data about
that item—everything from its identity to which invoice it has been charged on. Each RFID
tag contains a microchip that stores identification data—the EPC—and a wireless
transmitter and antenna that can broadcast that data to readers. Unlike the conventional
barcode, readers do not have to be in “line of sight” of the tag.
As with the barcode, a set of standards is emerging to govern the EPC data structure stored
on RFID tags, so that a tag attached to a pallet by a supplier can be read and understood
when that pallet reaches the customer. The format of EPC is governed by EPCglobal, an
RFID standards development joint venture between GS1 and GS1 US. EPCglobal is also
developing standards for the radio frequencies at which RFID tags will operate to ensure
global interoperability of tags and readers.
3.3.2. Structure of EPC
RFID tags can be active, passive or semi-passive. Active tags include a battery that powers
the antenna to broadcast a signal to be picked up by the reader. Passive tags have no battery
but draw power from the reader, which sends out electromagnetic waves that induce a
current in the tag’s antenna. Semi-passive tags use a battery to run the chip’s circuitry, but
communicate by drawing power from the reader. Active and semi-passive tags can be read
up to 100 feet (30 meters) away while passive tags can only be read from within 10 feet (3
meters). Active and semi-passive tags are also much more expensive. This means they are
economical for tracking high-value goods that need to be scanned from a distance but are
not suitable for tagging very low cost items.
Globalization – Education and Management Agendas 246
Source: [10]
Figure 5. Structure of EPC
3.3.3. How RFID works as part of the supply chain
When an RFID tag is attached to a pallet or case, the manufacturer needs to either program
the tag with an EPC containing the relevant code for that product or capture the pre-
programmed EPC. In either case, the EPC needs to be associated with the appropriate data
describing that product.
This product data is stored using Physical Markup Language (PML), a subset of eXtensible
Markup Language (XML), devised to allow the attributes of physical items to be described
in a standard way which can be interpreted by any PML-compliant application. The PML
standard is also managed by EPCglobal, drawing on work undertaken by bodies such as Le
Système International d’Unités (SI) and the National Institute of Standards and Technology
(NIST) in the US.
When an RFID tag is read, the EPC code is sent to an Object Name Service (ONS) on a local
network or the Internet, which points to a server where comprehensive data about the
product can be found in PML format. That data can be retrieved and passed to a company’s
inventory or supply chain applications.
Readers can be arranged and configured to capture RFID data in several ways:
? to conduct a scan of an area to identify everything in that area at that time. Such scans
could be continuous, scheduled on a regular basis or triggered by an event in another
system or by a person;
? to continuously scan for tags passing through a narrowly defined area (such as the
doorway to a loading dock);
? handheld scanners could be used to scan for tags on individual items.
Determines the
structure of the
following series of
numbers
Identifies the company
or entity responsable
for maintaining the
subsequent numbers
Used to identify an
object which represents
a group of products
Unique object
identification
01 . 0000A89 . 000 I 6 F . 00I69DC0
Header Domain Manager Object Class Serial Number
8 bits 28 bits 24 bits 36 bits
Indicator digit
EAN.UCC Prefix Product number Check digit
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 247
However readers are configured, they will pick up a constant stream of EPCs. Many of
these will be duplicate readings of the same RFID tag. Existing business applications such
as Enterprise Resource Planning (ERP), Supply Chain Management and Logistics
applications are ill-equipped to deal with these high volumes of repetitive data. The reader
therefore needs to pass the information to a middleware application that can manage the
flow of data.
4. Creating the business case for Global Data Synchronization in
the company
The basic building blocks of Global Trade Item Number (GTIN) and Global Location
Number (GLN) have been around for a number of years whereas GDS is now being set
in place. The GTIN is a single, unique number assigned to all products and services, so
that these products and services can be easily and accurately identified by everyone,
regardless of country, region or continent. The GLN provides businesses with a globally
accepted method of identifying legal entities and locations, such as plants, offices,
stores and any other shipping or receiving point. GDS is a process designed to help
keep everyone in the industry on the same page by ensuring that basic data such as
item and party information stored by one company matches the corresponding data in
the systems of their business partners. There are many paths that can be taken on the
journey to a global system language. In an effort to limit the scope, we chose to focus
the business case on the first “island of stability” in this move to global standards: the
Global Data Synchronization (GDS) process and the necessary preparation for that, the
adoption of GTINs and GLNs. The reason for this is that GDS is the first step after
implementing GTIN and GLN that will really bring the benefits from these foundational
standards.[12]
Let’s take a closer look at some examples of how the benefits can be mapped to specific
process areas:
Building the Case for Global Standards The Global Commerce Initiative (GCI) is working to
promote the necessary standards for the adoption of a common system language. GCI has
already published several recommendations ranging from implementation guidelines for
the Global Trade Item Number (GTIN) to best-practice recommendations for Collaborative
Planning, Forecasting and Replenishment (CPFR).
5. Global Trade Item Number (GTIN)
definition
A GTIN is used to identify any item (product or service) upon which there is a need to
retrieve pre-defined information and that may be priced or ordered or invoiced at any point
in any supply chain. This definition covers raw materials through to the end user products
and also includes services, all of them having predefined characteristics.
Globalization – Education and Management Agendas 248
Manufacturer Retailer
Corporate
management
• Simplified corporate reporting (D)
• Expand geographic retailer base (I)
• Eliminate IT system redundancy (I)
• Opportunity for shared service creation
(I)
• Simplified corporate reporting (D)
• Enable global sourcing (I)
• Corporate transparency/sales synergy
(I)
• Eliminate IT system redundancy (I)
• Opportunity for shared service creation
(I)
Category/Promotion
management
• Improve visibility/stock-level planning (I)
• Product posting/maximize retail
exposure (I)
• Reduce time spent on
complaints/disputes (D)
• Simplified and enhanced category
reporting (D)
• Reduce product introduction lead time
(D)
• Reduce product promotion lead time (D)
• Reduce need for local
agents/intermediation (I)
• Expand supplier base (I)
• Corporate sourcing price transparency
(I)
• Improve visibility/stock-level planning
(I)
• Reduce time spent on
complaints/disputes (D)
• Simplified and enhanced category
reporting (D)
• Reduce product introduction lead time
(D)
• Reduce product promotion lead time
(D)
Administrative
data handling
• Eliminate need for cross-reference tables
(D)
• Fewer invoice disputes (D)
• Fewer write-offs (D)
• Reduce accounts receivable (I)
• Fewer sales order defects (D)
• Less catalogue maintenance (D)
• Eliminate need for cross-reference
tables (D)
• Fewer invoice disputes (D)
• Fewer order defects (D)
• Improved fill rate (I)
Logistics
• Simplified order tracking and tracing (I)
• Fewer return shipments (D)
• Improved rate of perfect orders (D)
• Fewer emergency orders (D)
• More accurate picking (D)
• Optimized short-term planning (I)
• Error-free shipment receiving (D)
• Fewer return shipments (D)
• Fewer backorders (D)
• Less excess/safety stock (I)
• Optimized location dispatch (I)
Source: [12]
Table 1. The benefits for manufacturer and retailer for implementing GDS
5.1. Basic principles for assigning a GTIN
? GTIN assignment is governed by the rules contained in the General GS1 Specific actions
Manual .
? A series of identical items use the same GTIN.
? Any series of items different from another, for trading purposes (ordering, stocking or
billing), is assigned its own unique GTIN.
? A GTIN used at the lowest packing level, often the unit sold in the retail store, must be
based upon the EAN/UCC-8, UCC-12 or EAN/UCC-13 Data Structure.
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 249
5.2. GTIN allocation rules
A Global Trade Item Number (GTIN) is used to identify any item upon which there is a
need to retrieve pre-defined information and that may be priced or ordered or invoiced at any
point in any supply chain. A separate unique GTIN is required whenever any of the pre-
defined characteristics of an item are different in any way that is relevant to the trading
process. The guiding principle is if the customer is expected to distinguish a new trade item
from an old trade item and purchase accordingly, a new GTIN should be assigned. Specific
rules that apply to prevalent industry practices have been endorsed by the Global
Commerce Initiative Board, for the Fast Moving Consumer Goods (FMCG) industry. These
rules covering many common business cases can be found in Section 3 below. While all GS1
standards are voluntary, the rules are intended to drive normative practice within the
FMCG sector. [13]
The Brand Owner is the organization that owns the trade item specifications and may be:
? The manufacturer or supplier. The company manufactures the trade item or has it
manufactured, in any country, and sells it under its own brand name,
? The importer or wholesaler. The importer or wholesaler has the trade item
manufactured, In any country, and sells it under its own brand name or the importer or
wholesaler changes the trade item (for example by modifying the packaging of the
trade item).
6. An introduction to the Serial Shipping Container Code
6.1. The Serial Shipping Container Code
The Serial Shipping Container Code (or SSCC) is a voluntary standard designed to provide a
standard code and symbology system that can be used by all parties in the supply chain,
from manufacturer to transporter, distributor and retailer to track product distribution. The
standard was designed to support as wide a range of applications within the distribution
system as practical. When coupled with shipment information provided in advance by
means of Electronic Data Interchange or EDI, the standard will support applications such as
shipping/receiving, inventory updating, sortation, purchase order reconciliation, and
shipment tracking.
The SSCC is used to uniquely identify goods on the way from sender to final recipient and
can be used by all participants in the transport and distribution chain. Each shipping
container at the time of its creation is uniquely identified by the sender with a SSCC. A bar
code label encoding the SSCC is applied to the shipping container using the GS1 Application
Identifier Standard and the GS1 bar code symbology. [14]
The sender then communicates to the recipient in advance via the EANCOM Despatch Advice
(DESADV) message, the SSCC's of each shipping container to be shipped and all the relevant
shipment and container information. The shipment information will usually include
information such as date and time of shipment, expected date and time of arrival, carrier
Globalization – Education and Management Agendas 250
identification, references to a customer purchase order number or contract, etcetera. Container
information will include the product or products and the relevant quantities contained in each
shipping container identified by an SSCC along with any additional information such as final
delivery location(s), relevant dates such as best before date, or expiry date, batch numbers, etc..
The recipient stores this information in a computer data base. Upon reception of a shipment,
the receiver scans the bar coded SSCC, and all the relevant information stored on file for that
particular shipping container is transmitted from the computer to the application for further
processing. The SSCC can be used by all parties in the supply chain as a reference number or
license plate to extract all the relevant shipping container information held in computer files
within the receiver's information systems. The SSCC uniquely identifies the transport entity
(the shipping container it is applied to) for the lifetime of that transport unit.
Source: [14]
Figure 6. The GS1 messages
Source: [14]
Figure 7. The SSCC as an entity identifier
Use of the SSCC as an entity identifier means it can be used in multiple transactions by all
companies across a supply chain. All companies will benefit from the implementation of one
common and unique shipping container reference number.
SUPPLIER
SENDER
PRINTING SSCC AND
APPLYING LABEL
CUSTOMER
RECIPIENT
SCANNING
SSCC
Transmission of the SSCC alongside
detailed consignment information
Using the EANCOM message (DESADV)
Physical transport (3PL)
Supplier Transporter Distributor Customer Transporter
Applies
original
SSCC
Uses SSCC
for internal
controls &
tracing
Receives SSCC. Uses
SSCC for internal
controls and for
outbound shipment
Uses SSCC
for internal
controls &
tracing
Receives original
SSCC. Uses for
efficient goods
receipt
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 251
7. Global Product Classification (GPC)
7.1. Overview
The GS1 Global Product Classification (GPC) is a system that gives both sides of trading
partner relationship a common language for grouping products in the same way. It ensures
that products are classified correctly and uniformly, everywhere in the world. The term
“product” as used throughout this guide refers mainly to physical products; however GPC
is expanding into services as well. [15]
The business objectives of GPC are to:
- Support buying programs by allowing buyers to pre-select groups of applicable
products
- Provide a common language for category management, thus speeding up reaction to
consumer needs
- Be a key enabler of the Global Data Synchronization Network
- To be a Pivotal classification system between the information exchange parties
How it works
GPC is a rules-based, four-tier classification system for grouping products. The four tires are
Segment, Family, Class, and Brick (with attributes and attribute values). A Brick identifies a
category incorporating products (Global Trade Item Numbers (GTINs)) that serve a common
purpose, are of a similar form and material, and share the same set of category attributes.
7.2. General principles
1. Modularity and Flexibility of the classification structure in order to meet industry
objectives for the GPC.
2. The logical grouping of bricks. The logic behind the schema should be transparent.
3. All categorized information must be universally applicable, i.e. the terminology used in
the schema should not be culturally or nationally biased.
4. The schema is initially published in Oxford English with an explanatory glossary,
which helps to clarify specific terms. Both the schema and the glossary are being
translated to other languages, including US English.
5. Schema should facilitate the collection of relevant classification information, and allow
it to be presented in a view acceptable by the industry.
6. The schema can cover all products in the supply chain
7. Any changes to the classification schema should be communicated in delta report.
7.3. GPC rules for assessing GPC attributes
A clear and unambiguous understanding of classification concepts is critical for the
development and maintenance of a coherent classification system. Within the fields of
Globalization – Education and Management Agendas 252
electronic catalogues and data synchronization there is confusion due to differences in
terminology (e.g. property = attribute) or different understandings of concepts like
identification, description, and classification. Typical terms that can cause misunderstanding
when not precisely defined include ontology, taxonomy, classification system, data
dictionary, vocabulary, thesaurus, characteristics, property, attribute, and feature.
Recommendations below relating to these terms and definitions do not imply that the other
terms and definitions are erroneous or inferior. This section seeks to establish a consistent
vocabulary for supporting the GPC, and recognizes that other terms may be equally valid in
the same or a slightly different context.
8. Shelf Ready Packaging (SRP) - A collaborative approach
SRP is a reality today. Numerous stores all across Europe demonstrate a fairly high level of
implementation. Expected benefits from SRP sit both in the area of productivity (shelf
replenishment effectiveness) and of business opportunity (On Shelf availability
improvement, improvement of product recognition in shelf by the shoppers). But
surprisingly, so far very little shopper research has been done to understand in detail how
the shoppers interact with SRP. [17]
For these reasons, SRP cannot be considered as a standalone best practice, whose
generalization would bring substantial and measurable benefits at the industry level. Its
implementation should follow a case-by-case iterative, rather than systematic or dogmatic
approach. This report aims to provide you with a methodological framework,
comprehensive tools, and testimonials for embarking on your journey through the SRP
world.
8.1. Scope
Shelf Ready Packaging (SRP) is the term used throughout this publication to refer to a
product that comes in a ready merchandised unit which is easy to identify, easy to open, can
easily be put onto the shelf and disposed of, allowing an optimisation of shelf replenishment
and enhanced visibility. SRP is synonymous with RRP (Retail Ready Packaging), and ready
to sell or PAV (prêt-à-vendre). SRP covers all types of packaging which goes to the retail
outlet, including promotional displays, pallets, trays, crates, etc.
8.2. Guiding principles
First of all, to guide the discussion between manufacturers and retailers, the following
comprehensive set of guiding principles for SRP implementation has been established:
? Always of Value to the Shopper, Retailer and Manufacturer,
? Compliance with Environmental Legislation and Public Policy Concerns,
? Avoid Fragmentation and Complexity,
? Maintain Brand Identity,
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 253
? Measure Implementation,
? Requirement of Long-term Commitment from Retailers and Manufacturers,
? Compliance with total Supply Chain Efficiency Principles.
8.3. Functional requirements
Experience shows that it is generally easy to define what is not SRP. Reversely, it is
sometimes not so straight forward to define precisely what is SRP. An industry agreement
on common functional requirements for SRP design, applicable across Europe, is therefore
an important pre – requisite. The following diagram illustrates the five SRP requirements
validated by the ECR Europe workgroup:
Source: [17]
Figure 8. The five SRP requirements
The requirements listed above can vary in importance according to the product, and should
be taken into consideration alongside existing ECR Europe recommendations pertaining to
efficient unit loads design throughout the supply chain (1997). The assessment tool provided
in this document allows the relative importance of these requirements, for a specific product
or group of products, to be weighted collaboratively, and to measure the compliance of a
specific SRP design with each of these requirements. 100% compliance with all the
functional requirements should not be a systematic target: depending on product
characteristics, it may appear that some of these requirements are not applicable in a
particular case. However, Easy Identification (facilitation of product identification in
warehouse or back store) will always be considered best practice for most packaging
solutions, whether SRP or not.
Globalization – Education and Management Agendas 254
8.4. Business case
SRP implementation, can in many cases, impact the cost structure of a product, since it
may require industrial investment or additional outer packaging cost. However, as
mentioned above, shoppers are not willing to pay for any extra cost related to SRP
implementation. A collaborative and consistent business case approach is therefore
required to assess the costs and benefits of implementing SRP on one specific product or
group of products.
The eight step approach illustrated below enables retailers and manufacturers to take a total
supply chain view and to make an informed decision on SRP execution, with the ultimate
goal of enhancing shopper experience and maximizing joint business benefits.
Source: [17]
Figure 9. The eight step of SRP implementation
The eight-step approach includes a business case assessment tool.
8.5. In store execution
Once a retailer and a manufacturer have agreed on the development of an SRP solution in
line with the guiding principles, functional requirements and business case approach, it is
imperative that the solution is fully utilised.
To maximise the success of implementation, SRP should be approached as a company
initiative, supported by the top management, both at manufacturer and retailer level. The
following 3 step process will ensure a successful in store execution
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 255
Figure 10. Ensuring Successful In-Store Execution
Successful execution relies mainly on management communication, staff training, usage
tracking and feedback. The store audit checklist provided in this document will facilitate the
initiation of a continuous improvement approach on SRP, by capturing at the shelf level the
feedback from the store personnel in light of the expected benefits of a specific SRP execution
9. CPG company best practices
9.1. Overview of a typical Landscape
Best Practice: nowadays the ERP systems like SAP most probably will not offer the full range
of attributes needed to GDS; therefore companies like IBM have developed special products
to “fill this gap”. It is very important to have in mind the scale of the GDS implementation
before acquiring such a product like WPC-GDS, the installation and configuration costs for
such solutions could be considerable. Also is important to notice that, despite 1SYNC cannot
be “connected” to the ERP system, massive uploads can be done using the web interface of
the system.
In the example above the ERP system of the company is SAP R/3. The solution provided by
IBM (WPC-GDS) is implemented. WPC-GDS is periodically updated to meet the full
attributes set of 1SYNC. Also will be noticed that 1SYNC is offering Pre-Prod and Prod
environments, therefore the necessary testing and simulations can be conducted
A typical landscape of a GDS implementation in a large company will look as follows (Fig. 11.)
9.2. Cutover steps (testing scenario)
The 7 points below are a testing scenario for the environment mentioned earlier:
1. Review of material from Data Quality point of view: GTINs inconsistency,
completeness.
2. Replication from SAP to WPC
3. Enrichment (at least at mandatory in WPC fields level: GPC Description/Code, Start
Availability Date, GTIN name)
4. Approval (an intermediary step in WPC, specially designed as a quality gate)
5. Add Item (Items are moved from WPC to 1SYNC)
6. Add Links (GTINs linked between them)
7. Publish
Globalization – Education and Management Agendas 256
Figure 11. Typical Environment for GDS
Best Practice: to perform full reconciliation after each step above
The goal of conducting such a test is to check the end-to-end process of moving the data
from SAP R/3 to 1SYNC. Based on the results of this test the massive publication of items
can be carried out (remember: an item 1SYNC can be deleted only by 1SYNC clerk).
Details for each step:
9.2.1. Review of material from data quality point of view:
GTINs inconsistency, completeness
In the example from Figure 4 a material will be published from SAP system. The material
has 2 GTINs – one for CS (case) and another for (each), therefore resulting in a publication of
2 GTINs linked to each other
Obviously, a check should be conducted in both WPC and 1SYNC to make sure that these
GTINs don’t exist already.
Figure 12. The check of material member (EAN/UPC)
During testing the materials will be reviewed “manually”, but for big amounts of data
applications such as Athanor from Similarity Systems can be successfully used to make
Master Data
Repository
WebSphere
Product
Middlew
Cyclone
PREPROD
PROD
WPC
R/3
WPC 1SYNC
R/3
1SYNC
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 257
sure the data in the master data repository is cleansed and compliant with the
standards.
Best Practice: Athanor is a recommended tool not only for GDS implementations .Due to its
capacity to maintain data quality it can be at the core of data cleansing activities in general.
Before taking the decision to use Athanor a correct estimation should be done taking in
account the costs of the Athanor implementation per se and developments needed to have
Athanor effectively checking the data.
At this step is also good to notice that some retailers have developed own guides
to easy synchronization through 1SYNC. For example Carrefour has developed a
“1SYNC-Carrefour Implementation Guide” which, once again, underlines the crucial
importance of a good coordination between producer and retailer during the
implementation phases. The purpose of the guide mentioned above is to give 1SYNC
manufacturer users instructions needed to synchronize their item data with Carrefour
using 1SYNC Item manager. It is intended to highlight any specific processes, attributes
or validations that are in addition to the standard 1SYNC GDSN synchronization
process.
Best Practice: once again the link with the GDS partner is proved to be very important. It is
important to notice that some of the partners participating in GCI have special instructions
to be taken in consideration
Basically, a very important part of the project will be solving on the points below:
? Data Cleansing:
i. Athanor implementation and training (recommended, especially in case of big volumes
of data);
ii. Cleansing.
? GDS Data Standards adoption:
i. Understand Data Standards;
ii. Prepare all values;
iii. Implement in WPC or/and ERP (SAP R/3).
? Attribute analysis:
i. Mapping between 1SYNC , WPC and the ERP system (SAP R/3);
ii. Agree fields (attributes) with the partner.
9.2.2. Replication from SAP to WPC
An IDOC is generated from SAP system once the GDS flag activated and the information for
the selected material is transmitted. The key for this transmission is GTIN – GLN – TM
(Global Trade Item Number – Global Location Number – Target Market). The IDOC will
contain the information of the parent and child GTINs.
In Figure 5 can be seen the Outbound Idocs in SAP and the corresponding XML Message in
WPC Process Monitor. In the XML message can be seen information on both GTINs and the
corresponding hierarchy organization for this GTINs.
Globalization – Education and Management Agendas 258
SAP R/3:
Figure 13. The Outbound Idocs in SAP R/3 (Status 3)
WPC:
Figure 14. The corresponding XML Message in WPC Process Monitor (the link at SAP R/5 to WPC -
GDS)
Best Practice: at this point it is important to notice the time needed for this replication, which
for bigger volumes will be taken in consideration. If this replication is successful the
technical work of linking SAP R/3 to WPC-GDS is completed, therefore the idols generated
and the XML message in WPC-GDS will be checked for any discrepancies very carefully.
9.2.3. Enrichment (at least for mandatory in WPC fields, for example:
GPC description/code, start availability date, GTIN name)
During tests this enrichment can be done manually directly in WPC. During a cutover this
enrichment will be done using built-in mass uploads WPC facilities.
Best Practice: both manual and mass uploads enrichment will be tested. For mass uploads
development work in WPC-GDS will be required. Is important to notice that, every time a
new attribute is added in GDS these developments (for upload), will need to be adapted.
Also is known that, when 1SYNC implements a new attribute, IBM-WPC-GDS is not always
up to date. A “waiting time” for a new attribute in WPC is to be taken in consideration.
The status in WPC at arrival of the items will be “Draft with Variant” for Global attributes
and “Edited” for Local attributes (note that the statuses can be different, depending on WPC
configuration). The enrichment with supplementary attributes, not stored in the ERP system
will happen uploading flat files having structures aligned with the way the upload facilities
were designed in WPC. Below can be seen the flat file and the successful loading (results).
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 259
Figure 15. The uploading of flat files designed in WPC
After such operation the status of the items will change in WPC to “Draft with Variant” for
Global attributes and “Compliant” for Local attributes of the GTINs.
9.2.4. Approval (an intermediary step in WPC, specially designed as a quality gate)
Best practice: The approver will be usually a separate user
During cutover the approval step will be “automated” using the uploading facilities of
WPC:
Figure 16. The approval step, using the uploading facilities of WPC (Approved)
The status will change to “Approved” for local attributes:
WPC:
Figure 17. The approval step for local attributes (Approved)
Globalization – Education and Management Agendas 260
9.2.5. Add item (items are moved from WPC to 1SYNC)
WPC:
Figure 18. The global information alignment – adding the Item to 1Sync (Registered)
Adding the Item to 1SYNC will take place from inside WPC. The status of the items will
change from “Approved” for Local attributes to “Submitted for Registration” and after
receiving the confirmation from 1SYNC to “Registered” (Figure 10).
At this stage the items can be finally viewed in 1SYNC (both GTINs and the corresponding
link ready for creation):
1SYNC:
Figure 19. Final checking – the chain/link SAP R/3 – WPC – GDS - 1SYNC WORKS
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 261
The success of this step proves that the “chain” SAP R/3 – WPC-GDS – 1SYNC works
correctly.
9.2.6. Both “Add links” and “Publish” steps are done from WPC
Best Practice: it is important to involve the partner at this stage- to check that he can “see”
correctly what was published. Attention to correct GLNs and TMs.
10. Conclusions
Master data sharing between trading partners (e.g. buyer / seller) is one of the most important supply
chain processes since master data is fundamental to all business systems. The integrity and
timeliness of master data is critical for the uninterrupted flow of goods throughout the
Supply Chain. Sharing data effectively and efficiently is reliant on access to precise data
definitions by all partners, data accuracy and agreement on the process used to support the
exchange of data between trading partners. Such data sharing is commonly called Master
Data Alignment or Master Data Synchronization. The master data exchanged is defined and
agreed in the context of a common understanding of the business requirements between
trading partners.
Since 1990, increased awareness of the importance of master data synchronization has
triggered the launch of national (public) initiatives.
- A primary objective of these initiatives was to offer trading partners efficient “tools” to
support master data synchronization between national trading partners, namely the
implementation of National Data Pools;
- Currently, there are many data pools around the world, most of who are affiliated with
EAN / UCC organizations.
With the emergence of free trade regions, global and international commerce, increasing use
of e-commerce, master data synchronization has rapidly become an international concern. In
March 1999, the report of the ECR Master Data Group (Inter-Operability of EAN Compliant
Data Pools, IODP) highlighted the diversity of the existing data pools. This diversity
prevents proper global master data synchronization and, makes the harmonization of the
national data pools a necessity in order to support the global business needs [7].
Best practices at Nestle confirm the Global Standards of Global Data Synchronization (GDS),
launched by Global Commerce Initiative (GCI), now renamed Global Consumer Forum
(GCF)
Companies are working together, both retailers and producers, to overcome the technical
and organizational difficulties of GDS implementations. In this environment is important for
each company to understand GDS implementation in terms of its own particularities (from
technical, organizational and financial point of views) and to adopt the most suitable
solution to meet the standardized criteria recommended by entities like GCI, which are
supported by most of the industry players.
Globalization – Education and Management Agendas 262
Author details
Virgil Popa
Valahia University of Târgovi?te, Romania
11. References
[1] Global Commerce Initiative (2001), Aligning to Global Standards and Best Practices, Bruxells
[2] Global Commerce Initiative & IBM (2009), „Information Sharing Report”, Cologne
[3] Global Commerce Initiative, Cap Gemini, SAP & HP (2008), „Succeeding in a volatile
market. 2018 – The Future Value Chain”, Cologne
[4] Global Commerce Initiative & IBM (2004), „An Integrated View of the Global Data
Synchronization Network and the Electronic Product Code Network”, Cologne
[5] Global Commerce Initiative (2006), „Business Case Outline & Key Success Factors for
Implementing GUSI”, Version 1.00, Cologne
[6] Global Commerce Initiative, Global Upstream Supply Initiative (2006), „The Upstream
Integration Model”, Foundation for Global Upstream Supply Chain, Version 2.2 (Final
Version), Cologne
[7] ECR Europe & Fraunhofer Institute (2000), “Integrated Suppliers. ECR is also for Suppliers of
Ingredients, Raw Materials and Packaging”, Bruxelles
[8] Global Commerce Initiative, Global Data Synchronization Group (2001), „Global Master
Data Synchronization Process. Business Requirements, Vision, Concept and Recommendations.
Report 1 – Version V 1.0”, Cologne
[9] Global Commerce Initiative, Global Data Synchronization Group (2002), Global Master
Data Synchronization Process. Detailed Specifications of Global Registry, Global Search
Function and Flow of Messages. Report 2 – Version V 0.5, 2
nd
Edition, Cologne
[10] Global Commerce Initiative, Global Data Synchronization Group (2002), Global Master
Data Synchronization Process. Detailed Specifications of the Technical Certification of Data
Pools and the Global Registry. Report 3 – Version V 0.3, Cologne
[11] Electronic product code: RFID Drives the Next Revolution on Adaptive Retail Supply Chain
Execution (2004), Global Exchange Services, Gaithersburg, USA
[12] Global Commerce Initiative (2006), Business Case Outline & Key Success Factors for
Implementation GUSI, version 1.01, Bruxelles
[13] EAN
®
International (1998), An introduction to the Serial Shipping Container Code, Bruxelles
[14] GS1 (2011), Global Product Classification (GPC), Issue 1, Bruxelles
[15] GS1 International (2006), GTIN Allocation Rules, Bruxelles
[16] EAN International (1997), An introduction to EANCOM
®
in Trade and Transport, Bruxelles
[17] Popa V., Mircea D.(2010), Global Standards and Best Practices for Supply Chain Information
Alignment in Consumer Goods and Retail, Proceedings of the 4th European Conference on
Information Management and Evaluation, Universidade Novo de Lisboa, Portugal, 9-10
September 2010, Conference Managed by Academic Conferences, Published by
Academic Publishing Limited
doc_558798517.pdf
The Global Standards Management Process (GSMP) is the global process established initially by Global Commerce Initiative (GCI) and continued by GS1 for the development and maintenance of global standards and implementation guidelines, which are part of the GS1 System.
Chapter 10
© 2012 Popa, licensee InTech. This is an open access chapter distributed under the terms of the Creative
Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use,
distribution, and reproduction in any medium, provided the original work is properly cited.
Global Standards for Supply Chain Management
in Consumer Packaged Goods Industry
Virgil Popa
Additional information is available at the end of the chapterhttp://dx.doi.org/10.5772/50100
1. Introduction
The Global Standards Management Process (GSMP) is the global process established
initially by Global Commerce Initiative (GCI) and continued by GS1 for the development
and maintenance of global standards and implementation guidelines, which are part of the
GS1 System.
The Global Standards (GS) is a comprehensive set of methods and rules allowing the user
community and affected industry groups to submit and influence the creation and
maintenance of globally agreed standards and guidelines. Since the needs of the community
as a whole and the vertical industry groups are constantly changing, the GSMP structure
needs to reflect changes to allow maximum process efficiency.
The Efficient Consumer Response (ECR) movement, Voluntary Interindustry Commerce
Standards (VICS) and other industry associations have developed Global Standards and
Best Practices for CPG (FMCG) industry based on collaboration. These include for example
Category Management and Collaborative, Planning, Forecasting and Replenishment
(CPFR). To date the industry has struggled to implement these processes widely. A
standards based foundation brings: Scalability (expansion from a pilot to an enterprise-wide
solution); Portability (roll-out across internal divisions and regions); Affordability (increase
in scale without proportional increase in cost) to these processes. [1]
Emerging technology brings new e-business and e-service opportunities to the marketplace.
e-Procurement, e-auctions and e-communication over the internet through XML will all be
more efficient if developed on a common standards based platform. If international
manufacturers, retailers and solution providers (including exchanges) are forced to support
a myriad of local ‘standards’ then the incremental cost incurred will impact the entire
supply chain, including national players.
Globalization – Education and Management Agendas 234
The Global Commerce Initiative established the Global Upstream Supply Initiative (GUSI)
in order to provide a standard framework for consumer goods manufacturers and their
suppliers of ingredients, raw materials and packaging to better integrate across a number of
supply chain processes.
Without Internal Data Alignment, for example, Global Data Synchronization (GDS) will
definitely not improve business performance and will, in fact, magnify the negative impact
of poor quality data. What’s more, collaborative initiatives such as those included in
Efficient Consumer Response (ECR) and Collaborative Planning, Forecasting and
Replenishment (CPFR) will not be economically deployable on a wide scale without the
consistently accurate and available information that will result from an Internal Data
Alignment program.
GDS is based on a global network of data pools, or electronic catalogues, which are all inter-
operable and compliant with the same business requirements and standards.
Interoperability means that a manufacturer can publish a product and partner data on one
single Data Pool without having to worry about the fact that customers may select different
Data Pools to access the data.
The need for an internal organization
The success of Global Standards, and therefore the realization of the benefits, will come
through achievement of critical mass. Widespread adoption, though, does not mean that
companies cannot gain competitive advantage through optimal implementation of standards.
Leading companies that strive for this position have aligned relevant internal functions and
processes with the external standards development and management environment and are
building standards implementation into their internal business processes.
It is clear that standards development requires business involvement. Industry
representation is critical. Leading businesses understand this and engage with the standards
process.
In addition to working with the GS1 - GSMP and with GCI, most major manufacturers and
retailers engage with trade associations such as Association Internationalle de Marque
(AIM), CIES – The Food Business Forum, Food Marketing Institute (FMI) and Grocery
Manufacturers Association (GMA), and with associations such as the regional and national
ECR and GS1 organizations. Most companies do not co-ordinate their activity across these
bodies allowing regional or national managers to engage with a regional or local perspective
rather than a global perspective.
Lack of alignment of these activities in a global company results in inefficient use of
resources, duplication of activity and confusion within and outside the organization.
Companies that have coordinated across these activities report increased efficiency (a
reduction in the resource applied against these activities) but coupled with a significant
increase in effectiveness. Less people doing a better job.
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 235
The GS1 Business Plan includes expansion of the GS1 System into targeted sectors. In order
to accommodate new sectors, GSMP must balance the need for individual sector needs with
a consistent overall process. In terms of recognition and governance, the GSMP allows the
formation of a User Group for a specific sector based on the GS1 Business Plan.
The Nestlé GCI/GSMP network
Nestlé implemented a GCI/GSMP internal network to co-ordinate the approach to standards
development and drive the standards implementation. The organization is built around 4
units: One Expert Network per subject; Subject Matter Owner; Central coordination role;
Nestlé GCI/GSMP Steering Group.
Nestlé created an Expert Network for each subject in which they are involved in GCI/GSMP
working groups. In general, the Experts could be anyone, who is working on the respective
subject. They contribute their subject knowledge during standards development and
communicate the decisions made back to their base (e.g. Market, Regional Center).
2. Overview of Global Data Synchronization (GDS)
2.1. Information sharing in the supply chain
Information sharing can address three key areas in a product life cycle: Greater sharing of
information about consumer trends and market trends between trading partners can lead to
greater insights into consumer behavior, enabling both partners to better serve the
consumer. Sharing information about real demand between two trading partners can enable
the development of products that better meet consumers’ needs. Sharing of accurate, real-
time operational information between the two trading partners can lead to better use of
assets in the supply chain. This can improve product availability and consumer satisfaction
at the point of purchase. Accurate information is the basis of any commercial enterprise.
This is particularly true in the fast-moving, quick-response world of manufacturing and
retail. [2]
New ways of working together is about developing new ways for vertical trading partners
to work together – including sustainable changes in culture, collaborative business planning
and new measures and rewards. For a bilateral trading partner relationship, it offers an
integrated roadmap for getting alignment and commitment on four key strategic choices in
the collaboration of trading partners, which can ultimately lead to more satisfied shoppers
and the elimination of waste, both of which should, in the end, produce better business
results.
Some of the changes that need to be made with regard to information sharing will affect the
whole industry; others will be bilateral arrangements between individual trading partners,
as each company finds out “what works for us”. The reforms needed are in systems, in
practice and in philosophy, and cover, for example, a common vision of the value to be
created by sharing information across participants in the value chain or changing the way
Globalization – Education and Management Agendas 236
data is exchanged. A GCI group worked on the development of data flows linked to the
process of new product introduction, identifying what the information needs would be in
2018, as well as possible solutions, like a POS data sharing platform. The group analyzed the
current situation and outlined the action needed to move the industry forward. A number of
group members are now working to establish pilots on information sharing across several
steps of the new product introduction process. [3]
2.2. Global commerce initiative vision for Global Data Synchronization (GDS)
Data synchronization is the process of sharing master data between trading partners (details
of materials for sale within a market). GDS is based on a global network of data pools, or
electronic catalogues, which are all inter-operable and compliant with the same business
requirements and standards. Interoperability means that a manufacturer can publish a
product and partner data on one single Data Pool without having to worry about the fact
that customers may select different Data Pools to access the data. A Global Registry controls
the flow of information within the network. Obviously , perfect alignment of Master Data is
a necessity to support advanced collaborative practices, but the effort of undertaking such a
project is worth it : exchange of master data through data pools is the most efficient and
reliable method to implement modern collaborative practices.
Strategic direction
To support and implement the GCI vision for GDS is the strategic direction formany
multinational companies. Under the Global Commerce Initiative was developed the first
truly global approach to Data Synchronization.
A known best practice in the area is always to collaborate with customers or suppliers with
confirmed GDS commitment while aligning internally to create the readiness for efficient
and effective large scale implementation of GDS, in terms of organization, processes, data
and systems.
Buyers and sellers would be able to focus on building sales rather than on correcting
misaligned information. When a new product is launched the data will be exchanged in a
seamless and streamlined way through the supply chain, allowing the right amount of
goods to become available at the right place and at the right time – and faster!
This is the vision that GDS enables through providing the fundamental infrastructure for the
seamless flow of product information through the supply chain.
This GDS vision is delivered by the GDS Network. The network (Figure 1.) consists of:
? Interoperable, certified Data Pool,
? A Global Registry; provided by GS1,
? A set of EAN.UCC Standards (European Article Numbering – United Code Council),
ensuring that all supply chain partners use common product descriptions and
classification and the same message structures to exchange the data.
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 237
Source: An integrated view of the Global Data Synchronization network on the Electronic Product Code Network, GCI
and IBM, 2004 [4]
Figure 1. GCI vision for GDS
These elements of the GDS Network collectively support the synchronization of product
data between trading partners.
The GS1 Global Registry and the interoperable Data Pools are at the heart of the GDS
process. Their roles and functions are distinct but complementary. The key role of the GS1
Global Registry is to ensure that original data is registered once, at one place. Data Pools
provide for the publication of certified standard data and subscription to this data.
The Network works with the following principles:
? The GS1 Global Registry and the Data Pools will be EAN.UCC certified,
? There is interoperability among all Data Pools and the GS1 Global Registry,
? One single point of entry into the Network by all participants,
? Only the Data Pools will communicate with the GS1 Global Registry,
? Only GDS EAN.UCC Business Messages will be used within the Network.
2.3. Master data synchronization
Master Data Synchronization (or alignment) through data pools
is recognized as the most
efficient way to support the master data sharing between trading partners. The benefit of
data pools is that the use of their services mandates the adoption of standards. The
development of most national data pools in the world are claimed to be based on GS1
standards such as the Global Trade Item Number (GTIN) for the unique identification of
items, GS1 messages such as PRICAT and PARTIN, etc. Although many data pools support
GS1 standards, their development appears having been mainly focused on national
2. The Data Pool registers a product in the GS1
Global Registry and sends very basic
information about the item.
3. The GS1 Global Registry holds this basic
information about all items and the location of each
items’ source Data Pool.
1. A manufacturer will:
• Align data internally
• Prepare data for external
publication in line
with EAN.UCC
standards
• Publish item information
to the source Data
Pool
• Synchronize changes to
this date
• Approve retailer requests
to subscribe to date.
4. A retailer will:
• Search the GS1
Global Registry, via a
selected Data Pool, for
an item (by GTIN or
by description) – the
Registry returns the
details of the items to
the Data Pool
• Request subscription
to manufacturer data
• Receive data and any
subsequent changes
• Align data with
internal data.
5. The trading partners
synchronise the item
information between
their respective Data
Pools.
6. The same process
applies for synchronising
Party information,
published by manufacturer
or retailer, based on the
GLN.
Registry
Manufacturer
Retailer
Data
Pool
Data
Pool
Globalization – Education and Management Agendas 238
requirements. This has led to the implementation of different structures and designs. In
order for global data synchronization to be viable, data pool inter-connection and inter-
operability is essential.
Key business components and requirements of the global data synchronization process are:
? Leveraging data pools in order to benefit from the potential they offer,
? The registration of all items and locations to facilitate sharing of master data,
? The implementation of standardized information flow to support the data registration
and synchronization.
In order to meet these requirements, the following is needed:
? Implementation of a Global Registry to control the registration of items and locations,
? Amendment and further development of data pools in order to comply with the GCI
specifications (master data dictionary (GCI / Data dictionary), rules, principles,
synchronization process, etc.),
? Development and implementation of standardized messages between data pools and
the Global Registry,
? Development and implementation of standardized messages between data pools and
users (companies) based on the GCI / Data dictionary,
? Establishment of a Neutral Body for the governance and certification of the Global
Registry,
? Establishment of a Neutral Body for the Technical Certification of data pools.
The initial implementation of the GDS vision is focused around Master Data for ‘Item’ with
‘Location’ intended to follow soon after. Master Data is the set of data describing the
specifications and structure of each Product (or Item) and Location (or Party) involved in
Supply Chain Processes, based on the key identifiers, the Global Trade Item Number (GTIN)
and the Global Location Number (GLN).
The Master Data is an Information Alignment that can be divided into Neutral and
Relationship Dependent Data.
Neutral Data is that which is generally shared between multiple parties and which is
Relationship Independent. This can be split into three categories:
? Core Product Data – Core Data Attributes that apply to all instances of any product (e.g.
description, brand name, packaging, dimensions, etc),
? Category Specific Data – Data Attributes that only apply to specific product categories
(e.g. the color, grape and strength of a bottle of wine),
? Target Market Data – Data Attributes that are specific to product in a particular market
(e.g. packaging indicators in a specific country).
Relationship Dependent Data – Data Attributes that concern all terms bilaterally agreed and
communicated between trading partners such as marketing conditions, price information
and discounts, logistics agreements and more.
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 239
2.4. Global Upstream Supply Initiative (GUSI)
The Global Upstream Supply Initiative (GUSI) was formed to define a common way for
manufacturers of consumer products and their suppliers to provide tighter integration of their supply
chains, without the need for costly and time-consuming IT integration projects with every customer
or supplier. The UIM (Upstream Integration Model) developed by GUSI comprises a set of agreed
business processes and information flows supported by electronic message exchange based on GS1
standards.[6]
The GUSI Working Group first established an Upstream Integration Model (UIM), which
defined a number of standard business processes and information flows for different
scenarios. These scenarios covered different situations where consignment stock was or was
not involved and covered the case where the manufacturer initiated the order (Traditional
Order Management) or where the supplier initiated the order (Supplier Managed
Inventory).
In both cases, greater supply chain integration is achieved by improving visibility of both
inventory and demand throughout the supply chain.
The GUSI Working Group decided to adopt the GS1 XML message standards to
exchange information between the trading partners in support of these supply chain
processes.
It is important to highlight that each business case must be tailored to the actual situation
depending on the individual supplier and manufacturer, the industry, the products, etc. The
starting point for the companies will also be different. The business case for companies that
have already invested in collaborative supply chain solutions will focus on the cost to adopt
the GUSI model vs. the benefits gained from extending their collaboration community,
while the case for a company introducing collaborative solutions for the first time will focus
on the initial investment vs. the benefits gained from collaboration based on the GUSI
model.
The potential benefits can be categorized as:
? Hard benefits (tangible),
? Likely benefits (quantified) (tangible),
? Qualitative benefits (non-tangible),
? Stretched benefits (non-tangible).
Tangible benefits are those associated with a monetary saving, e.g. from collaboration which
can give reduced inventory, material cost reduction, reduced errors, optimized production
planning, reduced paper handling (e.g. e-billing) etc.
Non-tangible benefits refer to all those that cannot directly be put into monetary terms,
e.g. improved data quality, increased flexibility and reliability towards customers.
Although difficult to quantify, intangible benefits can be significant and add weight to an
ROI study [5].
Globalization – Education and Management Agendas 240
2.5. Business rationale
The current situation in the upstream supply chain of the CG industry is that all
manufacturers and suppliers are faced with different business processes and data
interchanges when they move into more integrated relationships. Different business
processes and approaches create a barrier to the scalability of integration efforts whilst also
imposing many costs: the time and money spent making transactions; the delays caused by
the need for corrections; plus inevitable information gaps and misunderstandings. Both
parties should obtain benefits from integration, among them improved visibility of demand
and demand changes and reduced inventory. Today, to access these benefits, each program
between manufacturer and supplier has to establish its own framework for process
definitions, item and location coding and in many cases message content. This is both a
wasteful process and in itself presents a significant barrier for scaled adoption. For example,
integrated suppliers consists in the challenge to integrate with multiple manufacturers, each
one with its own definition of the above factors. The existence of a framework based on
industry standards overcomes the described barriers and:
2.6. Integrated suppliers
The working group has taken into account existing standards and work undertaken by
previous projects. In particular it has built on work sponsored by ECR Europe.
The ECR “Integrated Suppliers” report summarized the concept of ‘Integrated Suppliers’
as follows: “Integrated Suppliers is a concept for improving the part of the supply chain between
manufacturers and the tiers of suppliers of ingredients, raw materials and packaging. By sharing
information both parties are able to exercise judgment on costs, quantities and timing of
deliveries and production in order to stream line the production flow and to move to a
collaborative relationship.” [7] Where the ECR report was about the ‘supplier driven’
continuous replenishment processes (supplier recommends the order to the
manufacturer) it did not include ‘manufacturer driven’ ordering processes. The UIM
covers both aspects and covers more elements that can be improved in the
manufacturer/supplier relationship - for example, next generation electronic data
exchange based on exception management.
2.7. Case for using existing GS1 item and location coding standards
A significant change proposed is that manufacturers and their suppliers should adopt the
GS1 standards for item and location coding to create a common coding system across the
supply chain - downstream as well as upstream. It is felt that the time is right for this move
given that:
a. There is strong manufacturer commitment to the GS1 standards;
b. There is an increased manufacturer momentum to build automated solutions that will
scale;
c. There is increasing supplier awareness of the inefficiencies of the existing methods;
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 241
d. There are new technologies expected over the next few years that will be based on
existing GS1 standards. By adopting the existing standards, suppliers will be able to
migrate to these new technologies. An example is the emerging use of Radio Frequency
Identification (RFID). To use RFID companies will need to adopt the new GS1
Electronic Product Code (EPC) Network being developed. The EPC will provide a
coding structure for radio frequency tags enabling individual items or groups of
products to be tracked across the supply chain. The existing GS1 item-coding standards
are embedded in the new EPC structure. It therefore provides a good first step towards
new RFID-based solutions [6].
The main GS1 standards that suppliers and manufacturers should use are the:
? “Global Trade Item Number“(GTIN): a unique and international GS1 number is assigned
to each trade item or to a standard grouping of trade items. This number is known as
the GTIN. Each GTIN data structure is represented by a bar code symbol. This allow for
the identification numbers to be scanned for automated data capture and electronic data
processing.
? Global Location Number (GLN). Location numbers are a key concept in supply chain
management. A location number is a numeric code that identifies any legal, functional
or physical entity within a business or organization. The identification of locations is
required to enable an efficient flow of goods and information between trading partners
through electronic messages to identify the parties involved in a transaction (e.g. buyer,
supplier, place of delivery, place of departure).
2.8. The Upstream Integration Model (UIM)
The UIM and Information Alignment offer common business processes and data
interchanges to support upstream interoperability between manufacturers and suppliers.[6]
By engaging in such an integration effort, business partners wish to:
? Create value in the supply chain for mutual benefit,
? Apply practical solutions fitting the nature of their business,
? Share and synchronize data and processes,
? Co-manage the materials lifecycle through the definition of business rules,
? Apply industry standards,
? Push the concepts through the whole supply chain.
It has been designed to meet the major electronic communication needs in the following
business areas:
? Procurement,
? Material forecasting,
? Inventory management,
? Dispatch, Receipt & Consumption of Materials,
? Financial Settlement.
Globalization – Education and Management Agendas 242
By adopting this model manufacturers and suppliers will have a common language for the
processes and data interchanges within their electronic integration relationships. To achieve
this, the model contains very specific definitions of process terms, data exchanges and their
content. Adopting the model allows companies to translate their internal processes and
approaches into a common language that all other parties will be using. The UIM structure
creates a common set of definitions that all parties can use, whilst still allowing them to use
their own internal definitions and processes, possibly with a requirement to translate
internal information into the standard structure of the UIM.
The concept of the model is based on six building blocks, structured as per Figure 2 below:
Source: GUSI working group [6]
Figure 2. UIM Building Blocks
The UIM offers a collaborative approach to both supplier- and manufacturer- initiated
ordering processes and addresses the most common variants of them based on either a
manufacturer or supplier driven scenario.
3. An integrated view of the Global Data Synchronization network with
Electronic Product Code network
3.1. The EPCglobal network
RFID is a technology which allows an electronic ‘tag’ (a silicon chip attached to an antenna)
to transmit its unique identification number to nearby electronic ‘readers’. RFID tags are
used in a variety of applications from automated bridge toll payments to dog tracking. The
Auto-ID Center created the concept of a unique code EPC that can be stored on the ‘tag’ and,
once read by an RFID reader, the code can be used to ‘look up’ information about the tagged
item. Because a code uses very little chip memory the chips themselves can be very small
and, therefore, very low cost. This makes the tags suitable for ubiquitous deployment on
pallets, cases, inner packs, and even on individual consumer items.[4]
By using the RFID technology to increase the visibility of product movement and the EPC
code to facilitate off-product information storage, supply chains of the future will be able to
track objects in real-time through the total supply chain and the product’s lifecycle. The
increased visibility of pallets, cases, and items that the use of EPC technology can deliver
will offer numerous new opportunities for improving supply chain measurement,
performance tuning, and product collaboration. In order to take advantage of this product
visibility across multiple trading partners in a supply chain, there will need to be a secure
network for reliably sharing product information.
Integration
Agreement
Master Data
Alignment
Financial
Settlement
Demand &
Supply
Signals
Dispatch,
Receipt &
Consumption
Purchase
Conditions
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 243
The EPCglobal Network is an open, standards-based system that will facilitate the sharing of
unique product identification and tracking information among partners in the value chain.
The EPCglobal Network enables the secure storage and/or retrieval from other sources and
networks of the following information about each tagged object:
? Core Product Information: Things true for all products with the same GTIN. This is
identical to the Core Product Information in the GDS Network.
? Manufacturing Time Information: Things known about this pallet, case, or item at the
time of manufacture. Data elements such as ‘lot number’ and ‘expiration date’ are not
stored by the GDS Network and today are often only stored in the internal IT systems of
the manufacturer.
? Lifecycle History Information: The distributed track and trace details of the lifecycle of
a product. Data elements such as ‘date/time received in back of store’ are not stored by
the GDS Network and today are often only stored in the internal IT systems of the
various supply chain partners.
3.2. The link between GTIN and EPC Code
The GTIN (e.g. EAN13, UPC12, etc) and the EPC are standards based numbering schemes
for identifying items.
Source: [3]
Figure 3. Example of a GTIN used to build an EPC Code
The diagram shows a high level schematic of how a GTIN can be used to build a unique
EPC code.
Reference should be made to the EPCglobal Tag Data Specifications.
The GTIN is an umbrella term used to describe an entire family of EAN.UCC data structures for
trade items identification. The family of data structures includes the UPC (UCC-12), EAN.UCC-
13, EAN.UCC-8 and EAN.UCC-14. Items at every level of the trade item configuration
(consumer selling unit, case level, inner pack level, and pallet) require a unique GTIN.
The EPC is an identification scheme to uniquely identify an individual item. The difference
between the two is that a GTIN identifies a particular class of object, such as a particular
Globalization – Education and Management Agendas 244
kind of product or Stock Keeping Unit (SKU), but does not uniquely identify a single
physical object.
To ensure the continuity, but still being able to create a unique identifier for individual
objects using the GTIN, the GTIN is augmented with a serial number. The combination of a
GTIN and a unique serial number is called Serialised GTIN (SGTIN).
Other GS1 standards based numbering schemes can also be used to build unique EPC
codes.
The publicly available EPCglobal Tag Data Specifications give details on how to create 96-bit
EPC codes, which encapsulate existing industry numbering schemes such as:
? EAN.UCC Serial Shipping Container Code (SSCC
®
)
? EAN.UCC Global Location Number (GLN
®
)
? EAN.UCC Global Returnable Asset Identifier (GRAI
®
)
? EAN.UCC Global Individual Asset Identifier (GIAI
®
).
For other industries, it is intended that different numbering schemes will be used to build
the EPC to ensure minimal disruption and investment protection, while at the same time
ensuring that all EPC codes are globally unique. Today, in addition to consumer products
and retail, many industries are considering EPC adoption – including defense, aerospace,
pharmaceuticals, healthcare, logistics, airlines, chemicals, medical equipment, consumer
electronics and paper.
3.3. Electronic Product Code: RFID drives the next revolution in adaptive retail
supply chain execution
RFID-Based EPC Will Fail in Supply Chains Built on Inaccurate Data
The benefits promised by RFID-based EPCs can only be delivered if trading networks also
address the issue of inaccurate data that pervades today’s supply chains, especially in the
retail sector. There is little point in knowing that a case of goods with a particular EPC is
speeding its way through the system if you think it is toothpaste when it is actually
shampoo. Since the EPC is a GTIN-based number, synchronizing the meaning of the GTIN
during the order management process is critical to ensuring accurate fulfillment of that
order and downstream supply chain processes based on EPC scanning.[11]
Therefore, prior to the implementation of RFID readers and tags, all retailers and their
suppliers must adopt the single global data synchronization (GDS) vision being promoted
by the Global Commerce Initiative (GCI) and GS1. GS1, the standards organization for retail,
has not only developed a single standard for identifying products, the Global Trade
Identification Number (GTIN), but also an infrastructure—the Global Data Synchronization
Network (GDSN)—to allow the retail industry to share data more easily. When fully
implemented, GDSN will allow detailed data about products from any supplier anywhere
in the world to be accessed by any retailer anywhere in the world, through a network of
locally held databases of GTINs called data pools.
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 245
Source: [10]
Figure 4. GTIN and EPC in Supply Chain Synchronization
3.3.1. RFID (Radio Frequency Identification) and EPCs—The basic technology
RFID tags storing EPCs are a way to associate data with a physical product. Anyone
handling the physical item can (with the right technology) access the business data about
that item—everything from its identity to which invoice it has been charged on. Each RFID
tag contains a microchip that stores identification data—the EPC—and a wireless
transmitter and antenna that can broadcast that data to readers. Unlike the conventional
barcode, readers do not have to be in “line of sight” of the tag.
As with the barcode, a set of standards is emerging to govern the EPC data structure stored
on RFID tags, so that a tag attached to a pallet by a supplier can be read and understood
when that pallet reaches the customer. The format of EPC is governed by EPCglobal, an
RFID standards development joint venture between GS1 and GS1 US. EPCglobal is also
developing standards for the radio frequencies at which RFID tags will operate to ensure
global interoperability of tags and readers.
3.3.2. Structure of EPC
RFID tags can be active, passive or semi-passive. Active tags include a battery that powers
the antenna to broadcast a signal to be picked up by the reader. Passive tags have no battery
but draw power from the reader, which sends out electromagnetic waves that induce a
current in the tag’s antenna. Semi-passive tags use a battery to run the chip’s circuitry, but
communicate by drawing power from the reader. Active and semi-passive tags can be read
up to 100 feet (30 meters) away while passive tags can only be read from within 10 feet (3
meters). Active and semi-passive tags are also much more expensive. This means they are
economical for tracking high-value goods that need to be scanned from a distance but are
not suitable for tagging very low cost items.
Globalization – Education and Management Agendas 246
Source: [10]
Figure 5. Structure of EPC
3.3.3. How RFID works as part of the supply chain
When an RFID tag is attached to a pallet or case, the manufacturer needs to either program
the tag with an EPC containing the relevant code for that product or capture the pre-
programmed EPC. In either case, the EPC needs to be associated with the appropriate data
describing that product.
This product data is stored using Physical Markup Language (PML), a subset of eXtensible
Markup Language (XML), devised to allow the attributes of physical items to be described
in a standard way which can be interpreted by any PML-compliant application. The PML
standard is also managed by EPCglobal, drawing on work undertaken by bodies such as Le
Système International d’Unités (SI) and the National Institute of Standards and Technology
(NIST) in the US.
When an RFID tag is read, the EPC code is sent to an Object Name Service (ONS) on a local
network or the Internet, which points to a server where comprehensive data about the
product can be found in PML format. That data can be retrieved and passed to a company’s
inventory or supply chain applications.
Readers can be arranged and configured to capture RFID data in several ways:
? to conduct a scan of an area to identify everything in that area at that time. Such scans
could be continuous, scheduled on a regular basis or triggered by an event in another
system or by a person;
? to continuously scan for tags passing through a narrowly defined area (such as the
doorway to a loading dock);
? handheld scanners could be used to scan for tags on individual items.
Determines the
structure of the
following series of
numbers
Identifies the company
or entity responsable
for maintaining the
subsequent numbers
Used to identify an
object which represents
a group of products
Unique object
identification
01 . 0000A89 . 000 I 6 F . 00I69DC0
Header Domain Manager Object Class Serial Number
8 bits 28 bits 24 bits 36 bits
Indicator digit
EAN.UCC Prefix Product number Check digit
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 247
However readers are configured, they will pick up a constant stream of EPCs. Many of
these will be duplicate readings of the same RFID tag. Existing business applications such
as Enterprise Resource Planning (ERP), Supply Chain Management and Logistics
applications are ill-equipped to deal with these high volumes of repetitive data. The reader
therefore needs to pass the information to a middleware application that can manage the
flow of data.
4. Creating the business case for Global Data Synchronization in
the company
The basic building blocks of Global Trade Item Number (GTIN) and Global Location
Number (GLN) have been around for a number of years whereas GDS is now being set
in place. The GTIN is a single, unique number assigned to all products and services, so
that these products and services can be easily and accurately identified by everyone,
regardless of country, region or continent. The GLN provides businesses with a globally
accepted method of identifying legal entities and locations, such as plants, offices,
stores and any other shipping or receiving point. GDS is a process designed to help
keep everyone in the industry on the same page by ensuring that basic data such as
item and party information stored by one company matches the corresponding data in
the systems of their business partners. There are many paths that can be taken on the
journey to a global system language. In an effort to limit the scope, we chose to focus
the business case on the first “island of stability” in this move to global standards: the
Global Data Synchronization (GDS) process and the necessary preparation for that, the
adoption of GTINs and GLNs. The reason for this is that GDS is the first step after
implementing GTIN and GLN that will really bring the benefits from these foundational
standards.[12]
Let’s take a closer look at some examples of how the benefits can be mapped to specific
process areas:
Building the Case for Global Standards The Global Commerce Initiative (GCI) is working to
promote the necessary standards for the adoption of a common system language. GCI has
already published several recommendations ranging from implementation guidelines for
the Global Trade Item Number (GTIN) to best-practice recommendations for Collaborative
Planning, Forecasting and Replenishment (CPFR).
5. Global Trade Item Number (GTIN)
definition
A GTIN is used to identify any item (product or service) upon which there is a need to
retrieve pre-defined information and that may be priced or ordered or invoiced at any point
in any supply chain. This definition covers raw materials through to the end user products
and also includes services, all of them having predefined characteristics.
Globalization – Education and Management Agendas 248
Manufacturer Retailer
Corporate
management
• Simplified corporate reporting (D)
• Expand geographic retailer base (I)
• Eliminate IT system redundancy (I)
• Opportunity for shared service creation
(I)
• Simplified corporate reporting (D)
• Enable global sourcing (I)
• Corporate transparency/sales synergy
(I)
• Eliminate IT system redundancy (I)
• Opportunity for shared service creation
(I)
Category/Promotion
management
• Improve visibility/stock-level planning (I)
• Product posting/maximize retail
exposure (I)
• Reduce time spent on
complaints/disputes (D)
• Simplified and enhanced category
reporting (D)
• Reduce product introduction lead time
(D)
• Reduce product promotion lead time (D)
• Reduce need for local
agents/intermediation (I)
• Expand supplier base (I)
• Corporate sourcing price transparency
(I)
• Improve visibility/stock-level planning
(I)
• Reduce time spent on
complaints/disputes (D)
• Simplified and enhanced category
reporting (D)
• Reduce product introduction lead time
(D)
• Reduce product promotion lead time
(D)
Administrative
data handling
• Eliminate need for cross-reference tables
(D)
• Fewer invoice disputes (D)
• Fewer write-offs (D)
• Reduce accounts receivable (I)
• Fewer sales order defects (D)
• Less catalogue maintenance (D)
• Eliminate need for cross-reference
tables (D)
• Fewer invoice disputes (D)
• Fewer order defects (D)
• Improved fill rate (I)
Logistics
• Simplified order tracking and tracing (I)
• Fewer return shipments (D)
• Improved rate of perfect orders (D)
• Fewer emergency orders (D)
• More accurate picking (D)
• Optimized short-term planning (I)
• Error-free shipment receiving (D)
• Fewer return shipments (D)
• Fewer backorders (D)
• Less excess/safety stock (I)
• Optimized location dispatch (I)
Source: [12]
Table 1. The benefits for manufacturer and retailer for implementing GDS
5.1. Basic principles for assigning a GTIN
? GTIN assignment is governed by the rules contained in the General GS1 Specific actions
Manual .
? A series of identical items use the same GTIN.
? Any series of items different from another, for trading purposes (ordering, stocking or
billing), is assigned its own unique GTIN.
? A GTIN used at the lowest packing level, often the unit sold in the retail store, must be
based upon the EAN/UCC-8, UCC-12 or EAN/UCC-13 Data Structure.
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 249
5.2. GTIN allocation rules
A Global Trade Item Number (GTIN) is used to identify any item upon which there is a
need to retrieve pre-defined information and that may be priced or ordered or invoiced at any
point in any supply chain. A separate unique GTIN is required whenever any of the pre-
defined characteristics of an item are different in any way that is relevant to the trading
process. The guiding principle is if the customer is expected to distinguish a new trade item
from an old trade item and purchase accordingly, a new GTIN should be assigned. Specific
rules that apply to prevalent industry practices have been endorsed by the Global
Commerce Initiative Board, for the Fast Moving Consumer Goods (FMCG) industry. These
rules covering many common business cases can be found in Section 3 below. While all GS1
standards are voluntary, the rules are intended to drive normative practice within the
FMCG sector. [13]
The Brand Owner is the organization that owns the trade item specifications and may be:
? The manufacturer or supplier. The company manufactures the trade item or has it
manufactured, in any country, and sells it under its own brand name,
? The importer or wholesaler. The importer or wholesaler has the trade item
manufactured, In any country, and sells it under its own brand name or the importer or
wholesaler changes the trade item (for example by modifying the packaging of the
trade item).
6. An introduction to the Serial Shipping Container Code
6.1. The Serial Shipping Container Code
The Serial Shipping Container Code (or SSCC) is a voluntary standard designed to provide a
standard code and symbology system that can be used by all parties in the supply chain,
from manufacturer to transporter, distributor and retailer to track product distribution. The
standard was designed to support as wide a range of applications within the distribution
system as practical. When coupled with shipment information provided in advance by
means of Electronic Data Interchange or EDI, the standard will support applications such as
shipping/receiving, inventory updating, sortation, purchase order reconciliation, and
shipment tracking.
The SSCC is used to uniquely identify goods on the way from sender to final recipient and
can be used by all participants in the transport and distribution chain. Each shipping
container at the time of its creation is uniquely identified by the sender with a SSCC. A bar
code label encoding the SSCC is applied to the shipping container using the GS1 Application
Identifier Standard and the GS1 bar code symbology. [14]
The sender then communicates to the recipient in advance via the EANCOM Despatch Advice
(DESADV) message, the SSCC's of each shipping container to be shipped and all the relevant
shipment and container information. The shipment information will usually include
information such as date and time of shipment, expected date and time of arrival, carrier
Globalization – Education and Management Agendas 250
identification, references to a customer purchase order number or contract, etcetera. Container
information will include the product or products and the relevant quantities contained in each
shipping container identified by an SSCC along with any additional information such as final
delivery location(s), relevant dates such as best before date, or expiry date, batch numbers, etc..
The recipient stores this information in a computer data base. Upon reception of a shipment,
the receiver scans the bar coded SSCC, and all the relevant information stored on file for that
particular shipping container is transmitted from the computer to the application for further
processing. The SSCC can be used by all parties in the supply chain as a reference number or
license plate to extract all the relevant shipping container information held in computer files
within the receiver's information systems. The SSCC uniquely identifies the transport entity
(the shipping container it is applied to) for the lifetime of that transport unit.
Source: [14]
Figure 6. The GS1 messages
Source: [14]
Figure 7. The SSCC as an entity identifier
Use of the SSCC as an entity identifier means it can be used in multiple transactions by all
companies across a supply chain. All companies will benefit from the implementation of one
common and unique shipping container reference number.
SUPPLIER
SENDER
PRINTING SSCC AND
APPLYING LABEL
CUSTOMER
RECIPIENT
SCANNING
SSCC
Transmission of the SSCC alongside
detailed consignment information
Using the EANCOM message (DESADV)
Physical transport (3PL)
Supplier Transporter Distributor Customer Transporter
Applies
original
SSCC
Uses SSCC
for internal
controls &
tracing
Receives SSCC. Uses
SSCC for internal
controls and for
outbound shipment
Uses SSCC
for internal
controls &
tracing
Receives original
SSCC. Uses for
efficient goods
receipt
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 251
7. Global Product Classification (GPC)
7.1. Overview
The GS1 Global Product Classification (GPC) is a system that gives both sides of trading
partner relationship a common language for grouping products in the same way. It ensures
that products are classified correctly and uniformly, everywhere in the world. The term
“product” as used throughout this guide refers mainly to physical products; however GPC
is expanding into services as well. [15]
The business objectives of GPC are to:
- Support buying programs by allowing buyers to pre-select groups of applicable
products
- Provide a common language for category management, thus speeding up reaction to
consumer needs
- Be a key enabler of the Global Data Synchronization Network
- To be a Pivotal classification system between the information exchange parties
How it works
GPC is a rules-based, four-tier classification system for grouping products. The four tires are
Segment, Family, Class, and Brick (with attributes and attribute values). A Brick identifies a
category incorporating products (Global Trade Item Numbers (GTINs)) that serve a common
purpose, are of a similar form and material, and share the same set of category attributes.
7.2. General principles
1. Modularity and Flexibility of the classification structure in order to meet industry
objectives for the GPC.
2. The logical grouping of bricks. The logic behind the schema should be transparent.
3. All categorized information must be universally applicable, i.e. the terminology used in
the schema should not be culturally or nationally biased.
4. The schema is initially published in Oxford English with an explanatory glossary,
which helps to clarify specific terms. Both the schema and the glossary are being
translated to other languages, including US English.
5. Schema should facilitate the collection of relevant classification information, and allow
it to be presented in a view acceptable by the industry.
6. The schema can cover all products in the supply chain
7. Any changes to the classification schema should be communicated in delta report.
7.3. GPC rules for assessing GPC attributes
A clear and unambiguous understanding of classification concepts is critical for the
development and maintenance of a coherent classification system. Within the fields of
Globalization – Education and Management Agendas 252
electronic catalogues and data synchronization there is confusion due to differences in
terminology (e.g. property = attribute) or different understandings of concepts like
identification, description, and classification. Typical terms that can cause misunderstanding
when not precisely defined include ontology, taxonomy, classification system, data
dictionary, vocabulary, thesaurus, characteristics, property, attribute, and feature.
Recommendations below relating to these terms and definitions do not imply that the other
terms and definitions are erroneous or inferior. This section seeks to establish a consistent
vocabulary for supporting the GPC, and recognizes that other terms may be equally valid in
the same or a slightly different context.
8. Shelf Ready Packaging (SRP) - A collaborative approach
SRP is a reality today. Numerous stores all across Europe demonstrate a fairly high level of
implementation. Expected benefits from SRP sit both in the area of productivity (shelf
replenishment effectiveness) and of business opportunity (On Shelf availability
improvement, improvement of product recognition in shelf by the shoppers). But
surprisingly, so far very little shopper research has been done to understand in detail how
the shoppers interact with SRP. [17]
For these reasons, SRP cannot be considered as a standalone best practice, whose
generalization would bring substantial and measurable benefits at the industry level. Its
implementation should follow a case-by-case iterative, rather than systematic or dogmatic
approach. This report aims to provide you with a methodological framework,
comprehensive tools, and testimonials for embarking on your journey through the SRP
world.
8.1. Scope
Shelf Ready Packaging (SRP) is the term used throughout this publication to refer to a
product that comes in a ready merchandised unit which is easy to identify, easy to open, can
easily be put onto the shelf and disposed of, allowing an optimisation of shelf replenishment
and enhanced visibility. SRP is synonymous with RRP (Retail Ready Packaging), and ready
to sell or PAV (prêt-à-vendre). SRP covers all types of packaging which goes to the retail
outlet, including promotional displays, pallets, trays, crates, etc.
8.2. Guiding principles
First of all, to guide the discussion between manufacturers and retailers, the following
comprehensive set of guiding principles for SRP implementation has been established:
? Always of Value to the Shopper, Retailer and Manufacturer,
? Compliance with Environmental Legislation and Public Policy Concerns,
? Avoid Fragmentation and Complexity,
? Maintain Brand Identity,
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 253
? Measure Implementation,
? Requirement of Long-term Commitment from Retailers and Manufacturers,
? Compliance with total Supply Chain Efficiency Principles.
8.3. Functional requirements
Experience shows that it is generally easy to define what is not SRP. Reversely, it is
sometimes not so straight forward to define precisely what is SRP. An industry agreement
on common functional requirements for SRP design, applicable across Europe, is therefore
an important pre – requisite. The following diagram illustrates the five SRP requirements
validated by the ECR Europe workgroup:
Source: [17]
Figure 8. The five SRP requirements
The requirements listed above can vary in importance according to the product, and should
be taken into consideration alongside existing ECR Europe recommendations pertaining to
efficient unit loads design throughout the supply chain (1997). The assessment tool provided
in this document allows the relative importance of these requirements, for a specific product
or group of products, to be weighted collaboratively, and to measure the compliance of a
specific SRP design with each of these requirements. 100% compliance with all the
functional requirements should not be a systematic target: depending on product
characteristics, it may appear that some of these requirements are not applicable in a
particular case. However, Easy Identification (facilitation of product identification in
warehouse or back store) will always be considered best practice for most packaging
solutions, whether SRP or not.
Globalization – Education and Management Agendas 254
8.4. Business case
SRP implementation, can in many cases, impact the cost structure of a product, since it
may require industrial investment or additional outer packaging cost. However, as
mentioned above, shoppers are not willing to pay for any extra cost related to SRP
implementation. A collaborative and consistent business case approach is therefore
required to assess the costs and benefits of implementing SRP on one specific product or
group of products.
The eight step approach illustrated below enables retailers and manufacturers to take a total
supply chain view and to make an informed decision on SRP execution, with the ultimate
goal of enhancing shopper experience and maximizing joint business benefits.
Source: [17]
Figure 9. The eight step of SRP implementation
The eight-step approach includes a business case assessment tool.
8.5. In store execution
Once a retailer and a manufacturer have agreed on the development of an SRP solution in
line with the guiding principles, functional requirements and business case approach, it is
imperative that the solution is fully utilised.
To maximise the success of implementation, SRP should be approached as a company
initiative, supported by the top management, both at manufacturer and retailer level. The
following 3 step process will ensure a successful in store execution
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 255
Figure 10. Ensuring Successful In-Store Execution
Successful execution relies mainly on management communication, staff training, usage
tracking and feedback. The store audit checklist provided in this document will facilitate the
initiation of a continuous improvement approach on SRP, by capturing at the shelf level the
feedback from the store personnel in light of the expected benefits of a specific SRP execution
9. CPG company best practices
9.1. Overview of a typical Landscape
Best Practice: nowadays the ERP systems like SAP most probably will not offer the full range
of attributes needed to GDS; therefore companies like IBM have developed special products
to “fill this gap”. It is very important to have in mind the scale of the GDS implementation
before acquiring such a product like WPC-GDS, the installation and configuration costs for
such solutions could be considerable. Also is important to notice that, despite 1SYNC cannot
be “connected” to the ERP system, massive uploads can be done using the web interface of
the system.
In the example above the ERP system of the company is SAP R/3. The solution provided by
IBM (WPC-GDS) is implemented. WPC-GDS is periodically updated to meet the full
attributes set of 1SYNC. Also will be noticed that 1SYNC is offering Pre-Prod and Prod
environments, therefore the necessary testing and simulations can be conducted
A typical landscape of a GDS implementation in a large company will look as follows (Fig. 11.)
9.2. Cutover steps (testing scenario)
The 7 points below are a testing scenario for the environment mentioned earlier:
1. Review of material from Data Quality point of view: GTINs inconsistency,
completeness.
2. Replication from SAP to WPC
3. Enrichment (at least at mandatory in WPC fields level: GPC Description/Code, Start
Availability Date, GTIN name)
4. Approval (an intermediary step in WPC, specially designed as a quality gate)
5. Add Item (Items are moved from WPC to 1SYNC)
6. Add Links (GTINs linked between them)
7. Publish
Globalization – Education and Management Agendas 256
Figure 11. Typical Environment for GDS
Best Practice: to perform full reconciliation after each step above
The goal of conducting such a test is to check the end-to-end process of moving the data
from SAP R/3 to 1SYNC. Based on the results of this test the massive publication of items
can be carried out (remember: an item 1SYNC can be deleted only by 1SYNC clerk).
Details for each step:
9.2.1. Review of material from data quality point of view:
GTINs inconsistency, completeness
In the example from Figure 4 a material will be published from SAP system. The material
has 2 GTINs – one for CS (case) and another for (each), therefore resulting in a publication of
2 GTINs linked to each other
Obviously, a check should be conducted in both WPC and 1SYNC to make sure that these
GTINs don’t exist already.
Figure 12. The check of material member (EAN/UPC)
During testing the materials will be reviewed “manually”, but for big amounts of data
applications such as Athanor from Similarity Systems can be successfully used to make
Master Data
Repository
WebSphere
Product
Middlew
Cyclone
PREPROD
PROD
WPC
R/3
WPC 1SYNC
R/3
1SYNC
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 257
sure the data in the master data repository is cleansed and compliant with the
standards.
Best Practice: Athanor is a recommended tool not only for GDS implementations .Due to its
capacity to maintain data quality it can be at the core of data cleansing activities in general.
Before taking the decision to use Athanor a correct estimation should be done taking in
account the costs of the Athanor implementation per se and developments needed to have
Athanor effectively checking the data.
At this step is also good to notice that some retailers have developed own guides
to easy synchronization through 1SYNC. For example Carrefour has developed a
“1SYNC-Carrefour Implementation Guide” which, once again, underlines the crucial
importance of a good coordination between producer and retailer during the
implementation phases. The purpose of the guide mentioned above is to give 1SYNC
manufacturer users instructions needed to synchronize their item data with Carrefour
using 1SYNC Item manager. It is intended to highlight any specific processes, attributes
or validations that are in addition to the standard 1SYNC GDSN synchronization
process.
Best Practice: once again the link with the GDS partner is proved to be very important. It is
important to notice that some of the partners participating in GCI have special instructions
to be taken in consideration
Basically, a very important part of the project will be solving on the points below:
? Data Cleansing:
i. Athanor implementation and training (recommended, especially in case of big volumes
of data);
ii. Cleansing.
? GDS Data Standards adoption:
i. Understand Data Standards;
ii. Prepare all values;
iii. Implement in WPC or/and ERP (SAP R/3).
? Attribute analysis:
i. Mapping between 1SYNC , WPC and the ERP system (SAP R/3);
ii. Agree fields (attributes) with the partner.
9.2.2. Replication from SAP to WPC
An IDOC is generated from SAP system once the GDS flag activated and the information for
the selected material is transmitted. The key for this transmission is GTIN – GLN – TM
(Global Trade Item Number – Global Location Number – Target Market). The IDOC will
contain the information of the parent and child GTINs.
In Figure 5 can be seen the Outbound Idocs in SAP and the corresponding XML Message in
WPC Process Monitor. In the XML message can be seen information on both GTINs and the
corresponding hierarchy organization for this GTINs.
Globalization – Education and Management Agendas 258
SAP R/3:
Figure 13. The Outbound Idocs in SAP R/3 (Status 3)
WPC:
Figure 14. The corresponding XML Message in WPC Process Monitor (the link at SAP R/5 to WPC -
GDS)
Best Practice: at this point it is important to notice the time needed for this replication, which
for bigger volumes will be taken in consideration. If this replication is successful the
technical work of linking SAP R/3 to WPC-GDS is completed, therefore the idols generated
and the XML message in WPC-GDS will be checked for any discrepancies very carefully.
9.2.3. Enrichment (at least for mandatory in WPC fields, for example:
GPC description/code, start availability date, GTIN name)
During tests this enrichment can be done manually directly in WPC. During a cutover this
enrichment will be done using built-in mass uploads WPC facilities.
Best Practice: both manual and mass uploads enrichment will be tested. For mass uploads
development work in WPC-GDS will be required. Is important to notice that, every time a
new attribute is added in GDS these developments (for upload), will need to be adapted.
Also is known that, when 1SYNC implements a new attribute, IBM-WPC-GDS is not always
up to date. A “waiting time” for a new attribute in WPC is to be taken in consideration.
The status in WPC at arrival of the items will be “Draft with Variant” for Global attributes
and “Edited” for Local attributes (note that the statuses can be different, depending on WPC
configuration). The enrichment with supplementary attributes, not stored in the ERP system
will happen uploading flat files having structures aligned with the way the upload facilities
were designed in WPC. Below can be seen the flat file and the successful loading (results).
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 259
Figure 15. The uploading of flat files designed in WPC
After such operation the status of the items will change in WPC to “Draft with Variant” for
Global attributes and “Compliant” for Local attributes of the GTINs.
9.2.4. Approval (an intermediary step in WPC, specially designed as a quality gate)
Best practice: The approver will be usually a separate user
During cutover the approval step will be “automated” using the uploading facilities of
WPC:
Figure 16. The approval step, using the uploading facilities of WPC (Approved)
The status will change to “Approved” for local attributes:
WPC:
Figure 17. The approval step for local attributes (Approved)
Globalization – Education and Management Agendas 260
9.2.5. Add item (items are moved from WPC to 1SYNC)
WPC:
Figure 18. The global information alignment – adding the Item to 1Sync (Registered)
Adding the Item to 1SYNC will take place from inside WPC. The status of the items will
change from “Approved” for Local attributes to “Submitted for Registration” and after
receiving the confirmation from 1SYNC to “Registered” (Figure 10).
At this stage the items can be finally viewed in 1SYNC (both GTINs and the corresponding
link ready for creation):
1SYNC:
Figure 19. Final checking – the chain/link SAP R/3 – WPC – GDS - 1SYNC WORKS
Global Standards for Supply Chain Management in Consumer Packaged Goods Industry 261
The success of this step proves that the “chain” SAP R/3 – WPC-GDS – 1SYNC works
correctly.
9.2.6. Both “Add links” and “Publish” steps are done from WPC
Best Practice: it is important to involve the partner at this stage- to check that he can “see”
correctly what was published. Attention to correct GLNs and TMs.
10. Conclusions
Master data sharing between trading partners (e.g. buyer / seller) is one of the most important supply
chain processes since master data is fundamental to all business systems. The integrity and
timeliness of master data is critical for the uninterrupted flow of goods throughout the
Supply Chain. Sharing data effectively and efficiently is reliant on access to precise data
definitions by all partners, data accuracy and agreement on the process used to support the
exchange of data between trading partners. Such data sharing is commonly called Master
Data Alignment or Master Data Synchronization. The master data exchanged is defined and
agreed in the context of a common understanding of the business requirements between
trading partners.
Since 1990, increased awareness of the importance of master data synchronization has
triggered the launch of national (public) initiatives.
- A primary objective of these initiatives was to offer trading partners efficient “tools” to
support master data synchronization between national trading partners, namely the
implementation of National Data Pools;
- Currently, there are many data pools around the world, most of who are affiliated with
EAN / UCC organizations.
With the emergence of free trade regions, global and international commerce, increasing use
of e-commerce, master data synchronization has rapidly become an international concern. In
March 1999, the report of the ECR Master Data Group (Inter-Operability of EAN Compliant
Data Pools, IODP) highlighted the diversity of the existing data pools. This diversity
prevents proper global master data synchronization and, makes the harmonization of the
national data pools a necessity in order to support the global business needs [7].
Best practices at Nestle confirm the Global Standards of Global Data Synchronization (GDS),
launched by Global Commerce Initiative (GCI), now renamed Global Consumer Forum
(GCF)
Companies are working together, both retailers and producers, to overcome the technical
and organizational difficulties of GDS implementations. In this environment is important for
each company to understand GDS implementation in terms of its own particularities (from
technical, organizational and financial point of views) and to adopt the most suitable
solution to meet the standardized criteria recommended by entities like GCI, which are
supported by most of the industry players.
Globalization – Education and Management Agendas 262
Author details
Virgil Popa
Valahia University of Târgovi?te, Romania
11. References
[1] Global Commerce Initiative (2001), Aligning to Global Standards and Best Practices, Bruxells
[2] Global Commerce Initiative & IBM (2009), „Information Sharing Report”, Cologne
[3] Global Commerce Initiative, Cap Gemini, SAP & HP (2008), „Succeeding in a volatile
market. 2018 – The Future Value Chain”, Cologne
[4] Global Commerce Initiative & IBM (2004), „An Integrated View of the Global Data
Synchronization Network and the Electronic Product Code Network”, Cologne
[5] Global Commerce Initiative (2006), „Business Case Outline & Key Success Factors for
Implementing GUSI”, Version 1.00, Cologne
[6] Global Commerce Initiative, Global Upstream Supply Initiative (2006), „The Upstream
Integration Model”, Foundation for Global Upstream Supply Chain, Version 2.2 (Final
Version), Cologne
[7] ECR Europe & Fraunhofer Institute (2000), “Integrated Suppliers. ECR is also for Suppliers of
Ingredients, Raw Materials and Packaging”, Bruxelles
[8] Global Commerce Initiative, Global Data Synchronization Group (2001), „Global Master
Data Synchronization Process. Business Requirements, Vision, Concept and Recommendations.
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