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GS1 US: Major change in supply chain traceability importance

By Joe Whitworth+

23-Oct-2015
Last updated on 26-Oct-2015 at 16:44 GMT2015-10-26T16:44:16Z

How often do you think about the supply chain process of products you buy?
How often do you think about the supply chain process of products you buy?

There has been a major change in supply chain traceability within the last decade as industry becomes more proactive than reactive, according to GS1 US.

The information standards organization and administrator of the UPC barcode said companies are focussing more on risk mitigation and protecting the brand as well as consumer safety.

To start selling product firms can license a GS1 Company Prefix which allows the ability to create Global Trade Item Number (GTINs), or Universal Product Codes (UPCs).

The number in a UPC barcode (called a GTIN) is typically 12 digits long. It starts with the UPC Company Prefix and ends with a check digit.

A GS1 Company Prefix is a unique identification number licensed to a company and it is part of every barcode and identification number created to identify brands in the supply chain.

Numbers between the UPC Company Prefix and the check digit are the item reference numbers that a company assigns to its products.

When licensing a GS1 Company Prefix, access is granted to the Data Driver, an online tool that allows companies to create their own barcodes.

An initial fee licenses the Company Prefix for one year. Then there is an annual renewal fee to continue using it for barcodes and product identification.

Traceability importance rise

Ryan Richard, senior industry development director, retail grocery at GS1 US, said using a common label and standardised process helps.  

“Making [traceability] a priority rose to the top of the house, they recognised they should have an in-house collective process. It helps the whole supply chain, not just the manufacturer, but the retailer and distributor to help identify products,” he said.

RFID is not widely adopted in the retail grocery because of the cost, applicability and readability on some of the food products. It is more in the apparel industry.

“In the food world the barcode is used to track when product left the supplier entered the retailer and distributor and so on and this can be tracked by software.”

Richard said despite all GS1 standards being voluntary adoption is common, such as the barcode which is a business normality with people using it as standard and the supply chain implementing them so they are global, unlike proprietary identification which is internal to an organisation.

“Tools such as supply chain visibility, which were used to identify where the product is before it codes out (goes past the expiration date) so it could be moved to the end consumer and not sit on the store shelf, are being used as traceability tools with on shelf availability and recall planning,” he said.

“The fresh area in the retail supply chain is getting more proactive such as adopting GS1-128 on case items tracking batch and lot number so you can trace more detail, after using it at first to make the product more available.

“Take the recent mac & cheese recall which was due to metal shavings from the production facility. You can identify the production facility and only recall that batch and not all products as you know where in the supply chain and what parts of the supply chain are affected so you are able to identify products and cut recall costs.”

GS1-128 barcodes are used to encode trade item data for logistics units such as cases and pallets that are not intended to pass through retail point-of-sale (POS).

Retail Grocery Initiative

GS1 runs the US Retail Grocery Initiative which seeks to identify specific business process challenges to ensure progress toward greater efficiencies, enhanced risk management and business growth.

Members include the Grocery Manufacturers Association, Produce Marketing Association, The Kroger Company, Wegmans Food Markets, the Coca-Cola Company, Mondelez, the Kellogg Company, Unilever, ConAgra Foods and Avery Dennison.

“Other issues are a focus on product information and images, nutritional and consumer-facing information, as they want information more than ever before," said Richard

“Another is operational efficiency and harmonisation in the supply chain in the US, from items purchased off the web, there is now a lot of direct-to-store stocking, and the traditional warehouse supply chain have looked at what needs to be optimised and make goods move faster.”  

Richard said the role of social media meant consumers are more informed than ever before.

“Information is at their fingertips so they get it quicker, where the product came from is a big thing today, it plays a huge role and is more important than before.

“If you have traceability in place and open up during a recall and say this is what we doing you have a better chance to weather the storm.” 

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