The GS1 Ireland Magazine | Autumn 2009
Using Standards to drive eďŹƒciency and reduce costs in recessionary times
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CEO’s Comment
Index CEO’s Comment
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GS1 News
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eGovernment eEnvironment – Shared Environmental Information System (SEIS)
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eProcurement – GLN adoption by the Danish public sector
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The Bar Code is 35 years young
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GS1 eCom 9-11 The Benefits of EDI: a practical perspective from an industry point of view 10-11 Meat Traceability
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Global Upstream Supply Initiative (GUSI) 14-15 Autumn Training Courses
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New Members
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IKEA Case Study
Despite the recession, this year has seen a considerable interest in the deployment of GS1 Standards. The challenge for every organisation, both in the private and public sector, is to reduce costs and improve efficiency. There is wider acceptance that supply chain solutions, such as EDI and scanning, need to be based on open and global Standards if they are to deliver the best value in terms of payback and ROI.
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Editor/Advertising Manager
Circulation Manager
Ross Carew 087 223 5867
Adreena Cullen (01) 208 0671
Contributors
Designer
Jim Bracken Ross Carew Barry Spellman Adreena Cullen Brendan Kernan
Mila Print & Design 087 927 2973
GS1 Ireland, The Nutley Building, Merrion Road, Dublin 4 Tel: (01) 208 0660 Fax (01) 208 0670 Email: info@gs1ie.org
www.gs1ie.org
eGovernment For some time now, we have been making the case for the adoption of GS1 based solutions in the public sector. Ironically, whereas Ireland at one stage ranked high in terms of eGovernment initiatives, sadly, in recent years we have fallen badly behind. Recent discussions have indicated a willingness to move towards paperless trading across the public sector. Fortunately, we have the experience of other member states such as Denmark where GS1 has assisted the Government in implementing eInvoicing which is already showing annual savings in excess of €120 million. It is reasonable to assume that for Ireland inc, there is a similar level of savings to be made and, in addition, there is the environmental saving which is reckoned to be in the order of 1,260 tonnes of CO2 p.a. Speaking of the environment, GS1 is engaged with the EU Commission on projects which are designed to enable the timely collection and sharing of environmental data from all member states. The SEIS project is featured on pages 4-6 and again it shows how GS1 Standards have much wider application than just for the FMCG and other sectors. EDI Two leading retailers, Musgrave and Tesco, are implementing the wider suite of GS1 messages, covering order through to invoice and, in turn, linking to back door scanning of pallets/cases to eliminate paper delivery notes, etc. By implementing electronic delivery notification solutions, the efficiency and effectiveness of supply chain operations is greatly improved and will lead to savings for consumers, which is good news all around. Meat Traceability The pork dioxin recall in late 2008 highlighted the need for improving the current traceability systems in the meat sector. GS1 has been engaged with all stakeholders with a view to supporting the implementation of an industry-wide approach. As we know from experience, when complete supply chain solutions including eMessaging and scanning by all parties are deployed, substantial savings and benefits are realised. In addition, traceability becomes a by-product due to enhanced visibility across the entire chain, thereby enabling targeted recalls to be managed easily. Healthcare Healthcare continues to be a key development sector for GS1 as tremendous strides have taken place in terms of sector specific standards. As part of our overall global traceability initiative, we now have a global healthcare traceability standard. GS1 Ireland, on behalf of GS1, has opened a dialogue with ISQua, the International Society for Quality in Health Care. The photo on page 3 shows board members of ISQua and GS1 Ireland at a recent meeting held in Dublin to discuss areas for collaboration. ISQua’s annual conference is taking place in Dublin from the 11th to 14th October and there is an incredible line-up of speakers and topics, including a number of ICT tracks. GS1 Ireland welcomes the recent HIQA report on the unique health identifier which we made submissions on. The availability of a UHI, both for patients and providers, is a vital first step towards the introduction of an Electronic Health record (EHR). It is interesting to note that both President Obama and the EU Commission have called for an interoperable EHR by 2015. GS1 Standards for identification and the EPC Network have the potential to support such key initiatives. The EHR will ensure safer treatment and also greater efficiency which will help governments to control their rising healthcare budgets. Jim Bracken Chief Executive Officer
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Attendees at the GS1/ISQua meeting - Standing (L-R): John Hayes, IT Director, Blackrock Clinic; Rory Connaughton, Managing Director, Holfeld Graphics Ltd; Triona Fortune, Director of Programmes, ISQua Head Office; Eric Schneider,Board Member, ISQua; Marisa Jimenez, EPCglobal Inc. Public Policy Director Europe; John Helfrick, Board Member, ISQua; David Skerritt, Board Member, GS1 Ireland; Michael Kelly, Chairman of HEA; Liam Hartnett, Chief Executive, Healthcare Express. Seated (L-R): Roisin Boland, CEO, ISQua; Philip Hassen, Vice-President, ISQua; Bruce Barraclough, President, ISQua; Jim Bracken, CEO, GS1 Ireland; Johnnie Philips, Head of Business Technology, United Drug Plc.
GS1 News Bob Semple and Marco Pattori were recently appointed to the Supervisory Board.
Bob Semple Partner, PricewaterhouseCoopers Bob Semple is a partner in PricewaterhouseCoopers. He has over 31 years professional experience providing a range of advisory and assurance services to clients. Over the years Bob has specialised in auditing, IT security, forensic investigation and, more recently, corporate governance and risk management. His clients include major government departments, major publicly quoted companies, state companies and private companies across many industries.
Marco Pattori Ireland Country Manager, Procter & Gamble Bob Semple is a partner in Marco Pattori was born in Piacenza in Northern Italy and got his first sales experience as a teenager in the family laundry and beauty wholesaler business. After graduating with a business degree from Bocconi University in Milan and completing his mandatory military service Marco joined P&G in 1991, starting in the sales department in Milan.
He is a member of the PricewaterhouseCoopers Committee of the Board, a director of the Corporate Governance Association of Ireland, a Fellow of the Institute of Chartered Accountants in Ireland and also of the Irish Computer Society. Bob has lectured widely on risk, control and security issues and is the author of several reports and books on these subjects. He is married with three children. He is a keen cyclist and recently ran his first marathon. He also enjoys amateur radio and woodturning.
Since then he has worked in various external selling and internal trade marketing roles for P&G before moving to Geneva in 2005 as EMEA Trade Marketing Associate Director for the pet care division. In 2007 he moved back to Rome as Trade Marketing Corporate Director for Italy which included responsibility for the commercial integration of the newly acquired Gillette Company. In December 2008 Marco was appointed as Ireland Country Manager. He is married to Livia and they have one son, Antonio, aged eight. He describes himself as a Vespa lover. 3
eEnvironment - Shared Environmental Information System (SEIS) An opportunity for the use of GS1 Standards deployment in support of the Environment Tackling today's environmental challenges such as adapting to climate change, managing ecosystems and natural resources in a sustainable manner, protecting biodiversity, preventing and managing environmental crises such as floods, forest fires, and water scarcity depend on the assessment of data from a variety of sectors and sources. This is why it is absolutely vital for the European Union to have an information system based on the latest information and communication technology (ICT) that will provide decision-makers at all levels (local to European) with realtime environmental data, thus allowing them to make immediate and life-saving decisions. Today, the emerging challenge is to use ICT technologies to improve collaboration between organisations and to facilitate interaction with civil society at large. Without improved collaboration between European public sector organisations, growth and security, jobs and freedom or health and a safe environment will be more difficult to achieve.
The underlying aim of SEIS is also to move away from paperbased reporting to a system where information is managed as close as possible to its source and made available to users in an open and transparent way. According to the SEIS concept, environmentally-related data and information will be stored in electronic databases throughout the European Union. These databases would be interconnected virtually and be compatible with each other. The proposed SEIS is a decentralised but integrated webenabled information system based on a network of public information providers sharing environmental data and information. It will be built upon existing e-infrastructure, systems and services in Member States and EU institutions. Why is SEIS needed? • Because EU Policy makers at all levels (local to European) are convinced that better decisions need better and more timely information •
What is the SEIS? The Shared Environmental Information System (SEIS) is a collaborative initiative of the European Commission and the European Environment Agency (EEA) to establish together with the Member States an integrated and shared EU-wide environmental information system. This system would tie in better all existing data gathering and information flows related to EU environmental policies and legislation. It will be based on technologies such as the internet and satellite systems and thus make environmental information more readily available and easier to understand to policy makers and the public.
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Because EU Member States deserves a modern, efficient and user friendly e-Reporting System to fulfill their reporting obligations related to European Union environmental policies and legislation, avoiding duplication of efforts, overlapping and redundancies
Timely, reliable and relevant information on the state of the environment is essential for sound policy making. Policy makers and the public need to know in a timely manner how the climate is changing, whether European waters are becoming cleaner or more polluted, how nature is reacting to pollution and changing land use and whether policies are effective. This information should be made available to all in a way that everyone can understand the changes to the environment and their impact.
The need for sharing environmental information More than 70 of the several hundred pieces of environmental legislation in force in the European Union require Member States to report on specific aspects of the environment within their territory. A large amount of environmental data is thus collected by various levels of public authorities throughout the EU. This information is used to analyse trends and pressures on the environment and is vital when drawing up policy or assessing whether policy is effective or being properly implemented. At present, this wealth of information is neither made available in a timely manner nor in a format that policy makers and the public can readily understand and use. This is due to a range of obstacles of a legal, financial, technical or procedural nature. Figure 1. The current fragmented reporting system
To better manage and communicate the wealth of environmental information collected, the European Commission is proposing to create a Shared Environmental Information System for Europe (SEIS). Figure 2. Once a Shared Environmental Information System exists all players can efficiently share information via shared areas
Key Eurostat= European Commission statistical office EC=European Commission EEA=European Environmental Agency OECD=Organisation for Economic Cooperation and Development UNEP= United Nations Environment Programme UNECE= United Nations Economic Commission for Europe
Reaping the benefits of technology SEIS will take advantage of the possibilities provided by information and communication technology to put into practice the principle 'monitor once for timely and multipurpose uses' . This will enable real-time data to be made available to decision-makers and allow them to make immediate and life-saving decisions. Experiences of forest fires, floods and droughts show how much timely environmental information can make a difference during an emergency. SEIS will allow data to be seamlessly combined with information from various sources and thus quickly perform cross-thematic and cross-sector analyses that EU environmental policy requires. For example, the health effects of air pollution can be evaluated if statistics on air quality, population concentrations and health statistics are overlapped for a specific region or geographical area and analysed collectively. Action can then follow based on the results. What benefits will SEIS bring? Better regulation, better policy SEIS will simplify the reporting and accessing of environmental information. While simplification is an essential element of drafting better legislation, better policy does depend on high quality, relevant and timely information. Reducing the administrative burden must indeed lead to an improvement and not a deterioration in the quality of public policy and regulation. Environmental data and information can be used by many players for a number of purposes. Improving the mechanisms for collecting, exchanging and using the data can significantly increase the use of environmentallyrelevant data at least cost to users. This will improve the effectiveness of environmental policy and lead to betterinformed policy discussions and decisions on pressing environmental challenges such as adapting to climate change, managing ecosystems and natural resources in a 5
sustainable manner, protecting biodiversity, managing water resources, and preventing and managing environmental crises such as floods and forest fires. Simplification and Efficiency The benefits of SEIS as a decentralised information system based on data-sharing are compelling. It will offer Member States and EU institutions a modern and efficient electronic system to fulfil their reporting obligations related to EU environmental policies. By doing away with paper reporting, the process through which environmental information is made available will be simpler, more flexible and more efficient. SEIS will also allow the information requirements currently contained in thematic environmental legislation to be streamlined. Beyond the clear benefits on Member States obligations to European legislation SEIS will also have knock-on effects on national administrations' reporting requirements to international conventions, many of which cover similar geographical areas as EU legislation. In terms of cost it is estimated that great savings can be made by improving the efficiency of datagathering conducted by Member States. Greater
harmonisation and prioritisation of monitoring activities organised at national and regional level is likely to be particularly effective in improving the cost-efficiency of current investments. Boosting Innovation and Intelligent eServices: eEurope, eGovernment, eEnvironment SEIS will also boost the development of intelligent eServices (eGovernment, eEnvironment, eReporting) by taking advantage of data sharing infrastructures. These include services such as: • 'what is in your backyard' ; • alert-broadcast systems; • decision support systems based on integrated assessment and geographic information services to assist the decision making on: pressing environmental issues, the prevention and management of environmental crises and, the implementation and effectiveness of environmental legislation, in particular those that require holistic, integrated approaches such as the Strategic Environmental Assessment (SEA) and Environmental Impact Assessment (EIA). Boosting intelligent eGovernment services for the Environment According to the 2008 UN eGovernment survey, Europe is leading the eGovernment in the world. However, while the uptake of programmes for 'linking up Europe' is progressing in the economic and social sector, the environmental sector is lagging behind. The relatively slow modernisation of environmental public authorities and the development of eGovernment services (national and pan-European) in the environmental field clearly undermines the ability of public policy makers either to respond quickly and wisely to crisis situations or to design and implement long-term and sustainable policies and the interaction with civil society at large. It is expected that SEIS will enable and boost the development of intelligent e-services (eGovernment, eEnvironment, eReporting) by taking advantage of data sharing infrastructures. SEIS -The need for a standards based approach Where can GS1 standards help? The vision for SEIS is one where Internet technologies are used to support a network of information providers sharing environmental data and information. GS1/EPCglobal’s network architecture, coupled with the other elements of the GS1 system, provides the perfect solution for enabling interoperability between the various databases which store the data across the various member states. GS1 in Europe is working with the European Task Force on SEIS to assist in the development of the solution.
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GLN adoption by the Danish public sector The GS1 Global Location Number (GLN) is now a mandatory component of the Danish government’s eInvoicing initiative where each public sector institution is required by law to have a GLN. In 2003 a Danish law on public sector payments was passed paving the way for the mandatory use of the electronic invoice when raising an invoice on the Danish public sector. Over the last two years, the application of eInvoicing within Denmark has become a European showcase for a successful implementation of Business to government e-commerce.
eProcurement in the Danish public sector From the 1st Feb 2005 all public sector institutions in Denmark were required have a GLN and to accept electronic invoices from suppliers. The expected financial gains from digitising the invoicing system in the public sector were calculated by the government to be in the region of €120 million annually.
The solution - GLN The collaboration between GS1 Denmark’s Global Location Number (GLN) allocation and the Danish government has been a small, but essential, part of the whole Danish B2G eProcurement invoicing solution. A main component of the Danish eProcurement solution is the electronic invoice and, naturally, the portion which deals with the identification of public sector entities. The Danish Finance Ministry chose the GLN as their unique and unambiguous numbering identification system for public sector entities based on two primary requirements: • •
To be a tool for routing electronic messages via the VANs (Value added networks). To be a mechanism to identify public sector entities in Denmark in electronic messages.
Now, almost three years on after implementation, many countries are looking towards Denmark’s eProcurement model as a successful blueprint for their own government initiatives in the public sector. The adoption of the GS1 GLN is an example of the type of application which is serving to add value to the public sector supply chain and increasing the significance of the Key figures 2008 - post implementation of eInvoice: GLN. • eProcurement savings: €300 million estimated to date • Invoices digitised: €45 million estimated to date • Private sector companies affected: 440,000 • Cost of GLN to government: 0.006% of annual savings realised by the implementation of the eInvoice 7
A Game Changer in Retailing, the Bar Code is 35 years young The design was straightforward – 59 black and white bars. And the inventors’ objectives were simple enough, too – to speed up the grocery checkout line and give supermarkets a new tool to track their stock. But the bar code has become much more than that since it was first used to read the price on a 10-pack of Juicy Fruit gum (67 cents) on the morning of June 26, 1974. Now they are used to board airplanes and track packages. Bar codes help people with diabetes calibrate glucose meters and researchers study the pollination habits of bees. They inspired a hand-held video game, Barcode Battler, in 1991. They even played a role in the 1992 presidential race, when thenPresident George H.W. Bush, at a campaign stop, seemed surprised by what had already become a technological staple of everyday life. Today, bar codes are scanned more than 5 billion times a day around the world. And after 35 years, they are both the mundane minutiae of modern life and cultural icons of cold efficiency, identification and control. “It was cheap and it was needed”, said George J. Laurer, who was already a veteran engineer at I.B.M. in 1970 when he was asked to lead a team assigned to devise a checkout system for grocery stores. “And it is reliable. Those three things probably contributed more than anything else”. Now 84 and retired, Mr. Laurer continues to be a cheerleader for his invention even as the bar code is challenged by newer and much more sophisticated competitors. Radio frequency identification, or RFID is one such technology. RFID uses the same technology as dashboard toll collectors and building access key cards and allows businesses to identify and track specific items without a direct line of sight. But even as big players like Wal-Mart and Procter & Gamble have pushed ahead with RFID technology, the cautious retail business, in particular, has pushed back, in part because of concerns with price. Bar codes, after all, cost just half a cent each, while the electronic tags used in RFID cost more than 5 cents each. As a result, a significant portion of Wal-Mart’s suppliers rejected its mandate to adopt the newer technology. “The technology took a bit of a black eye”, said Bob Sanders, a Motorola executive who once led a company that developed the first hand-held bar code scanner. A Wal-Mart spokesman, John Simley, acknowledged that “we hit realism” after the initial surge of “media-generated hype” for RFID in 2003. But he said Wal-Mart continues to introduce the technology. Bar codes have evolved to respond to the competition. In recent years, two-dimensional matrices, which resemble jumbles checkerboards and carry much more information than bar codes, have come into use in Japan and have gained a foothold in America. Cellphones equipped with technology for scanning those patterns can read them and
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display bar codes that could, for instance, be used instead of a ticket for a concert of board a plane. Mr. Laurer recalled that several designs, including a circular symbol, were considered before the team settled on what is now recognized as the Universal Product Code, the name of the familiar format that used 30 black and 29 white lines to convey 95 bits of data in binary code. The 12 digits give nothing more than “an address to look up information” in a database, Mr. Laurer said. When the initial design was proposed to a committee of reviewers at the Massachusetts Institute of Technology in 1972, he said, it was returned with only one recommendation: that the font of the “human readables,” the number found below the bar code, be changed to another font that was soon expected to become readable by machines and to supplant the striped pattern. “They were absolutely sure that within a few years no one would be reading the bar code,” Mr. Laurer said. “Well, they were wrong.” Mr. Laurer said nether I.B.M. nor any of its developers ever patented the bar code, though manufacturers pay a minimal annual fee to a nonprofit Group GS1, to cover the administration costs of overseeing the international standards. Sharon Buchanan was a 31-year-old cashier at the Marsh supermarket in Troy, Ohio, the day the bar code made its debut. One or two other clerks were working that day, but she was chosen to work the checkout, she said Thursday in an interview. “I was a little nervous at the time,” she said. “I mean what if this doesn’t work? Everybody was there taking pictures, the photographers, the local press, people from around town. But it worked just fine. It was quite my 15 minutes of fame, I suppose.” For all the excitement that day, the adoption of the bar code was gradual. For years, businesses were hamstrung by shoppers who refused to buy bar-coded products, worrying that they might be cheated at the checkout counter without price labels. At the time, “the vision of the bar code as some sort of surveillance device with ominous social implications was quite resonant,” said T.J. Jackson Lears, a cultural historian at Rutgers University. But with the advent of Google Earth and global tracking devices, “it now seems comparatively innocuous.” The bar code “has almost acquired a certain antique appeal as an early expression of the sorting and categorizing impulse in computer-driven marketing and sales,” he added. It seems, he said, “in some ways a charmingly archaic icon.” This article originally appeared in the New York Times.
GS1 Ireland comment – while the article is quite balanced, it is important to point out that RFID has already proven itself in terms of ROI, particularly at case and pallet level and, in certain categories, at the consumer unit. For the foreseeable future we expect to see both the linear and 2D bar codes being used, as well as the RFID tag. Cost and other issues will be the main determining factors.
GS1 eCom (EDI) GS1 Ireland Electronic Commerce Strategic Survey Electronic Data Interchange (EDI) is the computer-to-computer exchange of business documents between companies, using a standard format. It replaces the traditional processes of preparing data in paper form and sending it by mail or fax. EDI is based on the use of message standards, ensuring that all participants use a common language. A message standard consists of uniform formats for business documents which have been adopted for electronic transmission purposes. It also includes security and control elements and other rules and conventions relating to the use of transaction sets that all users agree to follow. The Irish Grocery Sector has been using eCom messaging for the past 18years and today 90% of Invoices in the grocery sector are transferred using EDI. EDI is a secure, stable, proven technology. The Irish Hardware/DIY Sector has recently completed the successful implementation of a standard EDI Invoice message. There is huge opportunity and potential for all Irish Industry sectors to increase efficiency, save money and improve their carbon footprint by implementing EDI. We wanted to find out about eCom usage in Ireland and at the end of last year conducted an inaugural benchmark survey among our membership. The first survey involved 124 companies, mostly SME’s and representing a variety of different sectors. It looked into the implementation of eCom across the GS1 community and the use of EDI between trading partners. We also spoke to a number of representatives from different industry sectors who are well qualified to speak about EDI. Their views are reported on the following 2 pages. “EDI is a significant enabling technology for an efficient supply chain” says Tony Griffin of Musgrave. This comment by Tony encourages us to look at EDI from a business perspective. Each of the contributors in their commentaries point out the precise business benefits gained over the years by using EDI with their trading partners. “Closer Collaboration”, “Greater Efficiency”, Higher Speed”, “Lower Cost”, “Improved Accuracy” are words that are peppered throughout each contribution. These words must be like music, especially in today’s tough times. But are we at the end of EDI implementation? Is there more that we can do? EDI is now an integral part of supply chain operations but, as our 2008 survey indicated, there is more that can be done. We started many years ago with the Invoice Message in the Grocery Sector. This is now being emulated in the DIY Sector where the Purchase Order message is now gaining momentum. Other messages such as the Despatch Advice (or Advanced Shipping Notice) are also being used by some parties. But is the full commercial business model implemented using EDI? Are you benefiting from the other messages? The management gurus will tell us that when we complete something we must start again and look for more improvement. This may be applied to EDI - once one message is completed, we must look at the next, the next and the next. Looking at the positive comments overleaf, particularly in these times, EDI must be an area where positive short and long term gains can be made.
Today, there are many more EDI based solutions available. Last year’s survey clearly indicated that we have moved well beyond the rigid structures of Traditional Value Added Networks with solution orientated services based on EDI. This has resulted in a greater accessibility to EDI, particularly for the SME community. While some companies are still using the traditional VAN EDI, you now have solutions that are Web enabled, Web to VAN to Web, outsourced secure solutions, secure internet point to point and the list is growing. GS1 are applying their message standards in all these areas, which means that companies have more choice of solution providers. In Support of this, GS1 Ireland has started a solution provider accreditation programme to assist both the end user and the solution providers The cost of EDI services has also fallen considerably since the early 1990’s. Some companies report that if all the costs of commercial paper, envelopes and stamps are considered alone – there are significant savings versus the costs of EDI. These savings rise considerably the more EDI messaging you do. The survey also pointed to the increasing development of upstream EDI. Companies can now benefit both at the supply side and the demand side. With all the challenges in today’s market, the value proposition for EDI, both for the short term savings and a long term strategy, is evidenced by our contributors. However, GS1 Ireland would highlight the importance of message standards. A message standard is a language based on the business model that enables computers to talk to computers. It is mission critical to work with these message standards to avoid the equivalent of the electronic Tower of Babel.
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The Benefits of EDI: a practical perspective from an industry point of view Tony Griffin
Tony Minogue
Head of IT Shared Services, Musgrave
General Manager Glanbia Business Services
“This sort of technology is all about collaboratively sharing information in a timely manner.” EDI is a significant enabling technology for an efficient supply chain,” explains Tony. “Musgrave has been engaging in paperless trade with all our suppliers for a number of years: all the purchase orders are placed via EDI and all the invoices received via EDI. However, we have gone a step further and have introduced electronic invoice matching: matching the goods received note to the electronic invoice via EDI.” Indeed, the impact of EDI has been so dramatic that Ireland’s biggest retail groups, Musgrave included, rely heavily on the technology for the effective running of their supply chain. “If you consider our chilled distribution, for example, all of the orders are placed by our retail partners in SuperValu and Centra stores, consolidated, split-up by supplier and sent to the various suppliers via EDI,” Tony explains. “The timeliness of that is key, so that the goods, in some instances, are delivered to our warehouse for immediate onward delivery to satisfy the needs of consumers. It is a very efficient supply chain.” Improving productivity and efficiency in the supply chain is an ongoing process, however, and Tony and his team work very closely with their suppliers on the sharing of information. Combining the already tried and trusted EDI methodology with web-based technology, for example, is leading to further improvements. “Web Purchase Ordering allows suppliers to download our purchase order from a secure website, giving them access to our requirements and our ordering patterns, very early in the process,” Tony explains. “We also engage in “Web Advance Shipping Notice” with a number of our “green lane” or trusted supplier partners, which serves to speed up the goods in process at our end. This sort of technology is all about collaboratively sharing information in a timely manner.”
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“Don't look at EDI as a tactical response to a request. Take a broader view and exploit the benefits.” Do you operate EDI with all your major trade customer groups? Yes, EDI removes paper and all that goes with it, providing an efficient method for transferring data with improved accuracy.
Do you use the same EDI provider for all customers? We use the Sterling Commerce product suite integrated with our SAP system to generate all our EDI data but we are looking at our VAN arrangements as there are a number of more cost effective offerings emerging.
What are the key operational requirements that EDI imposes? Firstly, 100% accuracy on all data elements associated with trading, unit of measure, pricing, descriptions, bar codes. Secondly, it’s important to recognise that there are operational controls relating to EDI and assign responsibility for management and monitoring.
What are the main benefits of EDI for a supplier? 1. 2. 3. 4.
Generally where there are EDI relationships in place there are close working relations between customer and supplier. Efficient mechanism of sending / receiving information. Higher accuracy rates Speedier turn-around times - EDI works 24/7.
Can these be quantified? Yes, they can. In some cases, you can measure manual data entry costs versus EDI costs. In most cases, you have to take a broader look at supply chain costs and where cost ( people’s time ) is spent.
What advice would you give to other business sectors that have yet to implement EDI? Don't look at EDI as a tactical response to a request. Take a broader view and exploit the benefits. Businesses that have scale in terms of document / transaction processing will see immediate benefits in an EDI solution.
Jim Copeland, Chief Executive, IHBMA “All stakeholders are engaged in this process, from manufacturers through to suppliers, wholesalers, agents, retailers.” The hardware/DIY sector is currently in the process of implementing EDI. Can you tell us a little of the background to the project. The electronic trading initiative was begun in 2007 and involved working with a representative group to oversee an agreed industry wide adoption of EDI/electronic trading. The initial group comprised of suppliers and retailers from our sector engaged in a proof of concept pilot study based on the implementation of a standard EDI invoice message and on international specifications. The 5 retail and supplier organisations (the retailers were Amalgamated Hardware, Associated Hardware, National Hardware, 4Home, Glanbia and on the supplier side – Crown Paints, Irish Cement, Ronseal, Groundforce, and Velux) operated this pilot for a period of months to test the theory and identify potential problems.
What stage is the roll out currently at? The initial pilot programme is complete and the solution is now being extended to other retail organisations and many more supplier companies who are in the process of adopting or have already adopted an integrated EDI solution. The hardware/DIY group within GS1 decided that an orderly expansion of the EDI community was the best way forward and that suppliers would be encouraged to participate based on volume of paper issued rather than value of invoice. This is in keeping with the ethos of electronic trading in cutting down or eliminating paper completely.
Are all trade sectors of the IHBMA implementing EDI? All stakeholders are engaged in this process, from manufacturers through to suppliers, wholesalers, agents, retailers, etc. The benefits of electronic trading go through the whole supply chain and there are savings to be made globally for the industry and sectorally and individually for companies.
What have been the main issues encountered? The main problems included the paper legacy issue, whereby companies have, since their inception, been used to operating entirely within a paper environment. The mindset that is needed to leave that behind has been an obstacle but is being overcome. The second obstacle is that paper lends itself to companies making specific changes to business documentation for various business reasons. The streamlining and discipline that is required within an electronic trading forum is now being understood by companies embarking on the process. Thirdly, the timing of the process has also been both a positive and a negative. With the downturn in the economy and in our hardware/building materials/DIY sector in particular, the economic wherewithal has been reduced. However, in a time of change, all change is possible, and companies are now looking at cost savings offered by an orderly change to electronic trading.
What have been the main benefits realised to date?
What is the timeframe for completion? There is no timeframe as such, the process is ongoing and it is nonproprietary and non-competitive. Companies within our sector wishing to adopt the agreed industry wide standard electronic data interchange message can do so at their own pace and work with trading partners as they so choose.
The benefits to date have included savings on the cost of handling and processing invoices and also with the extension of the programme to all other business documents. These savings include invoice mailing costs, invoice queries, errors, receiving and scanning invoices, checking validation, error reporting, etc. These are significant daily, weekly and monthly costs for any organisation and do not include the additional costs, such as invoice stationery, storage, retrieval, etc. After an initial set up charge, the return on investment for all sectors of the industry is very significant and is very much appreciated in the current economic climate.
John Dooley, IT Business Analyst, JTL Ireland Limited For many years we have used EDI with all our major trading partners, with our main focus being on EDI invoicing.
Seamless integration with backoffice (ERP) systems is the key element. For statutory reasons, certain EDI message files must be retained for 6 years. For auditing purposes (incl. SOX), there must be full audit trails for all EDI transactions.
Do you use the same EDI provider for all customers?
What are the main benefits of EDI for a supplier?
We channel all our EDI through one EDI service provider who in turn has the capability to interconnect to any service provider that our trading partners may choose.
Speed: transactions to/from our trading partners are faster than a paper-based system. Accuracy: rekeying errors that are a feature of a paper-based system are avoided. Security: EDI is a highly secure method for transacting business.
Do you operate EDI with all your major trade customer groups?
What are the key operational requirements that EDI imposes?
From the supplier’s perspective, these elements greatly minimise
delays with payments. For a global company, similar EANCOM Standard EDI solutions can be deployed across many markets.
Can these be quantified? Yes – for a paper-based system you factor in the frequency of postal delays, missing post, keying errors etc.
What advice would you give to other business sectors that have yet to implement EDI? EDI should be seriously considered if the transaction volume justifies it.
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Traceability can come at no extra cost A fully traceable system for farm foods is essential especially in times of crisis Last year’s pork dioxin crisis in Ireland served as a stark reminder of the need for a proper food traceability solution. The joint Oireachtas report stated that “the present system for monitoring and tracing Irish pork products is ineffective, and significant changes are required in order to avoid a repeat of the total recall of Irish pork products which has resulted in a cost of millions of Euro in compensation payments to the Irish taxpayer”. The report said that an effective traceability system would have facilitated a recall of contaminated product only. This was not possible in the dioxin contamination incident, which necessitated a 100% recall for a 10% contamination rate. Had the traceability system been developed based on GS1 standards, there is no question a targeted recall of prime products coded with bar codes containing batch data would have been possible. GS1 has been at the forefront of product identification and traceability solutions for the past 30 years. There are already excellent implementations of GS1 standards both in the food and healthcare sectors that would provide evidence of this. For example, in the case of Irish beef products affected by the same dioxin contamination, the total recall was not necessary due in part to the fact that proper batch traceability systems based on GS1 identifiers were already in place. Tracking from farm to fork is becoming even more effective and efficient thanks to GS1’s development of low cost RFID tags that can be used on animals. Recent developments in this area in New Zealand and Denmark, with pig tracker are undoubtedly more appropriate and fit for purpose than the conventional ear tags. Furthermore, RFID tags can be used to track the bulk product movements across the supply chain. For point-of-sale and in store stock management purposes, the marking of meat products labelled with GS1 data barcodes could indicate the batch information required to enable a targeted recall of all Irish produce, including pork. Consumers have a right to assume that all food put on the market is safe and fully traceable. Under EU and local regulation, this is a legal requirement. The various EU directives on beef traceability, the general food law and the food packaging law provide clear regulation for all stakeholders involved in the supply chain. Traceability is defined as “the ability to trace the history, application or location of an item by means of recorded identification. Traceability can relate to the origin of materials and parts, the processing history and the distribution and location of the product after delivery”. It is important because it facilitates the withdrawal of foods and enables consumers to be provided with targeted and accurate information concerning implicated products. The ability to pinpoint the origin of food ingredients and food sources is of great importance to the protection of the consumer, in particular when product recalls are required. In the event of a food safety problem, quick identification of affected products or batches of products can reduce the number of consumers exposed to a potential hazard.
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For the food industry, the implications of a major food safety failure can be commercially devastating, with product recalls, reputational damage and liability damages. Traceability systems assist in determining fault, thereby strengthening the liability incentive for firms to adopt good food safety practices. Irish and European law requires all food and animal feed businesses to establish and implement a food traceability system. It is a legal requirement for businesses to trace one step forward and one step back. This means food business owners must know who supplied them and whom or to where their product has gone. However, there is no legal requirement for businesses to have traceability systems that trace raw materials through the factory and into the finished product. The key components of an effective traceability system are: identification, data capture and recording and communication. This is why the global supply chain standards as developed by GS1 are critical, because they can support each component. GS1 ID keys for raw materials, finished products, logistic units (totes, pallets etc) and locations enable the accurate identification of what, where and when. With the speed of movement of products along today’s supply chain, it is essential to use automatic data capture technologies (scanning), whether GS1 barcodes or RFID tags. Scanning eliminates the need for paperwork and at the same time reduces errors. More importantly, it records “events” i.e. what, where, when in real time. Seeing traceability solely as a cost burden is a profit limiting perspective. In processes where the GS1 system of AIDC (automatic identification and data capture) has been deployed there has been a very considerable improvement in terms of efficiency and return on investment. In such applications traceability becomes a by-product and targeted recalls are made possible. The dioxin crisis highlights the need for implementing AIDC solutions across the entire supply chain based on open standards. In the future it will then be possible to identify the specific product, where it has been and where it went. The Food Safety Authority of Ireland, in association with GS1 Ireland, is hosting a seminar on meat traceability at the Radisson Hotel, Golden Lane, Dublin 8 on 11th November. The seminar, “Meat Traceability – everyone’s business”, will review current meat traceability systems and also showcase ‘model’ solutions from Ireland and abroad. See opposite for full details.
GS1 Ireland – Global Upstream Supply Initiative (GUSI) The term “upstream”, when used in a supply chain context, refers to the relationships between manufacturers, their raw materials and packaging suppliers. Since the late 1970’s the use of GS1 standards in industry have considerably reduced costs in the downstream supply chain. The use of unique product numbering, pallet labelling, barcode scanning and electronic business messaging have streamlined supply and demand chains and improved traceability globally. More recently RFID is being used to track product and exchange information on higher-value goods. The Case for integration The development of the global supply chain, as well as a wider variety of products, often in smaller quantities, has led to the time between design and delivery to final consumer becoming shorter and shorter. This puts pressure on the “upstream” part of the supply chain and drives the need for integration - more reliability of the information flow and greater visibility of the physical flow. The GCI Response The Global Commerce initiative (GCI), an international user group consisting of manufacturers, suppliers and retailers, in 1999 turned their attention to the Upstream Supply chain and established the Global Upstream Supply Initiative (GUSI). GUSI (the GS1 & GCI Solution) addresses the challenges in the Supply Chain Integration between manufacturers and their suppliers. Upstream Integration is about improving the processes by electronically sharing information and improving visibility of demand, demand changes and inventory. The case for implementing the Global Upstream Supply Initiative (GUSI) is compelling. It completes the supply chain integration using GS1 standards from start (raw material) to finish (consumer). It is essentially the eComm solution for upstream supply chain, enabling manufacturers to efficiently manage their incoming material processes more cost effectively.
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The initiative has been implemented across Europe and Australia, multinationals such as Unilever, Kraft, Nestle, P&G, Crown, Smurfit Kappa Group and many more are realising the benefits. The initiative is made possible by the use of standards – specifically GS1 standards in eCommerce. GS1 Ireland is ready to support member trading partners to implement this Global Upstream Supply Initiative (GUSI). A simple “Plug & Play” suite of implementation tools has been developed which includes, an integration model, the business case outline and the implementation guide for each of the pre-determined electronic business messages. Given the present economic climate in Ireland, competitiveness in industry is a key challenge, the adoption of GUSI is seen as an opportunity to add efficiency and gain advantage on competitors. Many of the operational and financial benefits are outlined below. The un-measured benefit is in the improvement of the trading relationships as participant companies learn to trust one another with their inventories and forecasts.
Operational Benefits Operationally GUSI brings transparency into the upstream supply chain. • It eliminates paper-work by implementing GS1 standard eComm messages and the ability to scan product into back office systems, in turn significantly reducing admin costs and eliminating data alignment errors. • It allows for the reductions in inventory holdings due to the rapid computer notification of actual events (no more waiting for someone to key-in the information). • It facilitates a reduced life cycle, as the manufacturer and the supplier have transparency of stock holdings and quality control outcomes. • It also allows for easier and more informed changes to bills of material and thus these can occur more rapidly and lead to a significant reduction in waste. • New products can now have a shorter time-tomarket. • It reduces stock-outs enabling full supply chain visibility, with both inventory held and sales forecasted information available to all.
Financial Benefits Overall there are significant financial benefits, mostly in the areas identified in the Operational Benefits. Below are some percentages from the combined case studies collated by GS1 and GCI. • Inventory levels reduced by between 10 and 30% • Sales Admin costs – reduced by 5-10% • Finance Accounts Payable Admin – 80% reduction • Lead Times – reduced by 40-50% (in on-site requirement time) • Stock-out situation reduction – 10 – 30% • Service level increase – now averaging 99.5% customer service level. It is conservatively estimated that cost savings in the region of €1 per pallet is not exceptional. This saving falls on both sides of the supply chain and increases and decreases based on how standard practices were utilised prior to GUSI implementation. All tools are available from GS1 Ireland at www.gs1ie.org.
Manufacturers - Call your top suppliers now and start the discussion that will quickly realise real quantifiable cost savings for you and your supplier. Suppliers - Don’t wait for your manufacturing clients to call you – be proactive – insist on savings – implement GUSI now. The lessons have been learnt already, the tools are already available, the case studies are there to examine, NOW it’s time to agree objectives with your trading partners and ACT. For more information please contact GS1 Ireland on +353 1 2080660 or by email at barry.spellman@gs1ie.org 15
Autumn Training Courses Bar coding
EDI
About the course: This course covers everything to do with bar coding. You will learn how to assign unique identifiers (numbers) to all your products and apply them in the correct bar code format. These formats include: bar codes for retail (POS), outer packaging and pallet bar codes. This course also covers how the GS1 standards can be used to support traceability solutions. No prior knowledge of bar coding is required for this course.
About the course: The objective of this course is to give a full understanding of all aspects of electronic trading. The course begins with an overview on the need for standards and gradually builds up to the construction of EDI messages.
Prices:
Duration: Location: Dates:
1 person €350, 2 people €280pp, 3 people €260pp and 4+ people €200pp (prices exclude VAT). Price includes Lunch and training material. 10am - 4pm GS1 Ireland, The Nutley Building, Merrion Road, Dublin 4 September 30th, October 13th & November 19th
Prices:
Duration: Day 2: Location: Dates:
1 person €475, 2 people €365pp (prices exclude VAT) Price includes Lunch and training material. Day 1: 11am – 4.30pm 9.30am – 4.00pm GS1 Ireland, The Nutley Building, Merrion Road, Dublin 4 October 20th & 21st
Places are limited, so BOOK EARLY
Learn about the GS1 Standards online visit LEARN: the GS1 online elearning tool see www.gs1ie.org for details
Ensure that your bar codes scan first time, everytime! Did you know....
that its the responsibility of the ‘originator’ of the bar code, usually the brand owner of the product being bar coded, to ensure that it meets the quality requirements of the entire supply chain.
Bar code Verification Ask yourself two simple questions...... Are you having trouble with your bar codes scanning, leading to troubled supplier-customer relationships? How confident are you that your bar codes will scan at all points of your supply chain? If yes, GS1 Ireland can help, if you need to get your bar code verified please contact
Beatriz Gil Martin on 01 208-0660 or email beatriz.gilmartin@gs1ie.org
New Members GS1 Ireland would like to welcome the following as New Members of the organisation Aerospace Software Developments Ainne Ni Bhrian Gluten Free Product Allflags Ltd Annies Bakery Ansamed Ltd AOTI Ltd Atlantic Cleaning Products Awear Ltd Axis Pivotal Product Management Ltd Bars for Cars Ltd Beechlawn Organic Farm Birds Eye Ireland Ltd Blue Bio Pharmaceuticals Ltd BobbyJean Records Ltd Brennan Convenience Foods Ltd Brian McCormack Bushby's Strawberries Business Management Partners Ltd Carol Home Bakery Carraigh Donn (Trading) Ltd Chamco Foods Ireland Ltd Charem Ltd Clare Spring Water CleverKids Coachbury Distributions Ltd Coffee Perfection Ltd Cognitive Solutions Corderry Fruit Farm Corman Miloko Ireland Ltd Crilco Confections Ltd Decawave Duncannon Fish Company Ltd Dundon Food Experience Entray Bakery Errigal Records Europet Ltd Fahy Import Feis Publications Ltd Futurtek Ltd G & A Agnew Ltd Gairdin Gerry Joyce Meat Sales Giraffe Brands Ltd Glenbrook Clothing
Going Healthy GP Clothing GreenStar Ltd Greyhound Recycling Ltd Holycross Good Food HW China Market ID Solutions Inside Outside Insulation Distributors Ltd IQ Brands Ltd Island Seafoods Ltd Jakes Pet Suppliers Jim's Handy Mat Katies Real Chocolate Kavanaghs Catering & Fine Foods Kayem Distribution Ltd Kelcan Limited Laincar Ltd Laois Poultry & Frozen Foods Ltd L'Artisan Ltd M Stacey Stone Products Mags Home baking Marks Meats
Maspeth Foods Mauds Ice Cream Michael Kearney furniture Navan Ltd Michael Moore Fruit & Veg MIG Live Milne Foods Ltd Mophia's Gluten Free Bakery Motor Distributors Limited Mulrooney's Gala Shop Musgrave Wholesale Partners Ireland Natasha's Living Food Natures Oils Ltd Nature's Way Energy Ltd Osmosis Ireland Pacific Foods Ltd Pandora Bell Paul Brophy Produce Paul Garvey Agencies Ltd Pauwels Trafo Ireland Ltd Peggy's Homemade Goodness Pepsico International Ltd Pergola FineFoods Ltd Pink Gill Farm
Quinn Litepac Ltd Quinn Therm Ltd Real View Manufacturing Ltd Rose Marketing UK ltd Rosy Days Sunnyside Produce Sushi King Tanklok Ltd The Artisan Pizza company The Blue Haven Food Company The Millhouse Bar & Restaurant Thunders Bakery Ltd Tissue Link Ireland Ltd Tree Hugger ltd TTR Ireland Ltd Valentia Island Farmhouse Dairy Village Home Bakery Waveform Solutions Wes-Chem Wexford's Best Wish4 Fairtrade XS Direct Ltd Zanna
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Case Study: IKEA by GS1 Sweden The GS1 ‘Seal of Approval’ Introduction IKEA is a multinational furnishings company founded in 1943 by Ingvar Kamprad. The first IKEA store was opened in 1958 in Älmhult, Sweden. Today the group has over 290 stores in 36 countries. IKEA's first Irish store was opened in Belfast in 2007 and its Dublin store opened in Ballymun at the end of July 2009. In 2008 the turnover was 22.5 billion euro. The company has some 104,000 employees in 44 Countries. With about 1,500 suppliers in 55 countries, IKEA’s previous system for traceability and identification of products had become too fragmented.
The pilot found that traceability at pallet level had also improved IKEA’s product quality by simplifying the warehouses’ exception reporting to the suppliers since all information on the pallets origin were readily available.
The furnishings company looked to the GS1 System of standards to introduce a more efficient and standardised structure to their supply chain.
"The idea is that, due to the different legal demands on product quality and product content in different countries, we can easily trace the raw materials from which our products are made thus further improving quality," explains Jan Ståhl.
Pilot project
IKEA adopts GS1 System of standards
In April 2004, IKEA commenced a study of which systems and methods were being used for traceability in the group and how these could be improved. The results of the study found that goods could not be traced at pallet level outside an individual IKEA warehouse, but only at truck level. As the deliveries arrived from the supplier, they were logged at the inbound goods dock. The pallets were given unique numbers by each individual warehouse. However, if a pallet was sent from one IKEA warehouse to another, it needed to be re-registered, a very time consuming process. Following the results from the survey, IKEA began a pilot project using the GS1 System of standards and its unique identification key, the Serial Shipping Container Code (SSCC) for their warehouses in Älmhult and Torsvik (Sweden) together with three of their largest suppliers. The GS1 System had quickly demonstrated positive effects during the pilot. Previously when the warehouse had received pallets, these were left in the dock area awaiting logging and processing before they could be moved further into the warehouse. During the pilot project, the SSCC bar code was read as the pallet was unloaded allowing it to be picked up and stored immediately by a truck driver. The time to unload a truck was reduced by 44% and the turnover in the warehouse’s dock area increased by 55%. In the summer of 2007, IKEA’s pilot project ended with positive results demonstrating that the GS1System of standards had rapidly improved their traceability, exception handling and product quality.
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According to Jan Ståhl, business developer, supply chain development at IKEA of Sweden, "Inventory control has improved, stock information has become more accurate and traceability of our pallets has improved. These benefits have also been realised by the three suppliers who have started to use the GS1 System for internal traceability in their own warehouses."
Following the success of the pilot project, it was decided that all of furniture giant IKEA’s warehouses worldwide and their 400 largest suppliers would start adopting the GS1 System of standards and the SSCC in September 2007. The GS1 System is currently in the process of being adopted by all of IKEA’s warehouses worldwide which handle over 20 million cubic metres of goods each year. IKEA’s warehouse staff have already received training on how to use the GS1 System and the company has already implemented a warehouse management system that is able to process pallet numbers. This has allowed the furniture giant to start implementing the GS1 System of standards to trace their pallets. IKEA has adopted the GS1 SSCC to uniquely identify pallets in their warehouses worldwide. IKEA’s pallets are uniquely identified using an SSCC which consists of 18 digits and is bar coded using GS1-128. By using this GS1 key a package can be uniquely identified by everybody involved: suppliers, transporters, and, in this case, IKEA’s warehouses and stores. "It’s not just about adopting the SSCC, but also getting all of IKEA’s other IT systems to process this information and GS1’s identification procedures," explains Jan Ståhl. “The cost advantages achieved by introducing the GS1 System will in general automatically result in price reductions for IKEA’s customers. Costs and prices will be reduced even further through a parallel project for the
The time to unload a truck was reduced by 44% and the turnover in the warehouse’s dock area increased by 55%. implementation of the GS1 System in IKEA stores. Our store in Malmö can already accept, capture, and process SSCC numbers," says Jan Ståhl. "Next year we will start to roll out the system to all our other stores worldwide." In addition to this, more suppliers will be included in the next phase of the adoption and the GS1 System will finally be used by approximately 900 suppliers.
Future plans: RFID solution IKEA is also studying the possibilities and advantages of implementing RFID following their adoption of the GS1 System of standards to further improve traceability, exception reporting and inventory control. "By using RFID we would be able to have multiple read points to ensure that we load and unload the right goods automatically. In principle it is easy to put tags on the pallets, but implementation of a full RFID solution also requires the installation of various related equipment such as RFID middleware to enable data exchange," says Jan Spjuth, project manager at supply chain development at IKEA of Sweden.
"The RFID project has only just started," says Jan Spjuth. “We will not be developing our own RFID system, but will follow the standards that exist. IKEA plan to start carrying out RFID tests next year at a number of stores for certain product flows.
IKEA’s use of RFID in their supply chain is dependent on a number of market factors. The cost of RFID tags and readers is expected to go down and their competitors are planning strategic RFID initiatives. IKEA is currently supporting and following the developments of RFID/EPC standards.
“The cost advantages achieved by introducing the GS1 System will in general automatically result in price reductions for IKEA’s customers.
"We have already taken the first step by joining GS1 and starting to use SSCC. This is a prerequisite for the introduction of RFID/EPC," concludes Jan Spjuth.
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