ecr europe forum '05. get the most out of communication standards upstream

« GS1, a new name, a global vision together »

Get The Most Out ofCommunication Standards

Upstream!10th ECR Europe Conference

Paris, 26 April 2005

©2004 GS1

SESSION OBJECTIVES

• Brief you on a new marketplace development that isimportant to your business and to your customers

• Learn about the business drivers and rationale behindthe Upstream Integration Model (UIM)

• Understand the foundations of the EAN.UCC System

• Learn about the upstream application of EAN.UCCidentification, bar coding and B2B message standards

©2004 GS1

SESSION CONTENTS

• Introduction to GS1 and a basic overview of theEAN.UCC System

• The road from the ECR Integrated Suppliers Projectto the Global Upstream Supply Initiative (GUSI)

• Background and benefits of the GUSI UpstreamIntegration Model (UIM)

• EAN.UCC identification keys and bar codes

• EAN.UCC XML and EANCOM® message standards

©2004 GS1

INTRODUCTION TO GS1

• Mission:• To lead the design and implementation of global

standards to improve the supply and demand chain

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

facilitating best business solutions

• Ultimate Objective:• To be the number One Standards Organisation in the

world for the management of supply and demand chains

©2004 GS1

GS1 is…

• A “not-for-profit” organisation

• Neutral from the business partners

• User driven and user governed

• Committed to serve all companies, bothmultinationals and SMEs

• A platform for collaborative agreementsbetween business partners

©2004 GS1

GS1 WORLD MAP

GS1 Member Organisations

Membership allocated on a directcompany basis by GS1104 MOs representing

1,000,000+ member companiesin 155 countries

©2004 GS1

BASIC OVERVIEW OF THEEAN.UCC SYSTEM

©2004 GS1

GS1 standardsdrive consumerdemand dataavailability!

©2004 GS1

Efficientreplenishmentrelies on GS1standards!

©2004 GS1

GS1 standardsdrive the WMSwhere demandand supplychains meet!

©2004 GS1

Inventoryplanning andsupply chainvisibility relyon GS1standards!

©2004 GS1

GS1 standardsenable theentire order tocash cycle!

©2004 GS1

Adoption ofGS1 standardsdrives downcomplexity andcost !

©2004 GS1

ECR Europe Integrated Supplierspilot results in 1999-2000

• Inventory level held between trading partnersdown by 40%

• Administrative cost reduction• 20 % for the manufacturer• 5 % for the supplier

• Order fulfilment lead times reduced by 40%• Reduction of production costs of 6%• Service levels approaching 100%


Upstream Integration Model

©2004 GS1

Overview on current scenario

All companies have developed their own solutions to share information withmajor suppliers (e.g. email, extranet access, EDI, etc)

Different business process scenariosDifferent data interchangesDifferent integration technology

These customized solutions have proved to be inefficient and unsuitable to bescaled within companies and across the industry

ManufacturerS

S

S

ManufacturerS

S

S

ManufacturerS

S

S

ManufacturerS

S

S

©2004 GS1

Upstream Supply Chain - thescaling barrier

Time

BusinessBenefits

Current 1:1programs(varying frompilots tointegration withmany suppliers)

SCALE

BARRIER Complexity & Uncertainty

Suppliers faced with different Approaches

Cost

No sharing of experience

Un coordinated actions

No widely adopted standards ..divergence

GlobalBenefits across

the industry

Industry wide standards are the

foundation to break

through the scaling barrier

©2004 GS1

Global Upstream Supply Initiative

• In 2003, an informal group of CPG manufacturersstarted exploring the upstream supply chain areas forimprovements. This led to the publication of the firstversion of the Upstream Integration Model (UIM).

• A second version was published in 2004. It wassubmitted to GS1 as a basis for the development ofnew and amended EAN.UCC standards.

• Today, GUSI is a part of GCI and a dedicated WorkGroup is established. Membership consists ofmanufacturers and suppliers of raw materials,ingredients and packaging.

©2004 GS1

Evolution of GUSI

2003

Group of manufacturers (Unilever, Nestlé,Henkel and Danone) explores upstreamsupply chain areas for improvements

Confirm that there is a strong potential for acommon set of approaches and standardsupstream

Create an Upstream Integration Model (UIM) ofprocesses, definitions and message needs

Positive support from EAN.UCC

UIM V 1 is presented to experienced eSupplyChain suppliers:

Positive reaction from suppliers insupport of the initiative

2004

The original group expands to include newmanufacturers and suppliers (P&G, Crown,Firmenich, Kappa Packaging, Novozymes, SCA,Van Genechten Packaging)

No eMarketplaces or service providersinvolvedContinue neutral facilitation

Create UIM V2 and submit it to Global StandardManagement Process to develop standardmessages based on business requirements

GUSI approaches GCI to gain approval as anofficial global initiative

Positive response from GCI

GUSI becomes part of GCI and a neworganizational structure is agreed

©2004 GS1

Evolution of UIM V 1

01/03 02/03 06/03 07/04 10/03 11/03

Explore phase High levelChangeRequest

submitted toGSMP

New Groupset up

(Manufacturers & Suppliers)

EAN.UCCinvolvement andproject approach

agreed

Initiativepresentationto selectedsuppliers

Initiativepresentation

to newmanufacturers

Initial groupset up and

explorephasestarted

UIM V1 finalised

08/03

©2004 GS1

Evolution of UIM V 2

02/04 06/04 07/04 08/04 09/04

Validationprocess

UIM V2 finalised

IndustryRequirementTeam (IRT)

set up

Standardmessages

developmentprocessstarted

Extendedgroup set

up and UIMV1

reviewingphasestarted

Change Requestsubmitted to IRT

©2004 GS1

Future Scenario - Upstream Integration Model

UIM

BusinessProcesses

Messages• Manufacturer-

Supplier Integrationsolution which canaccommodatedifferent businessprocess scenarios

• Upstream SMI andOrder Managementare the two mostcommon businessprocess scenariosused in the CPGindustry

• Set of standardmessagessupportingbusiness processscenarios

• The move to more realtime exchange of datainstead of the batchoriented exchanges ofthe past

• The focus onexceptions rather thansending andconfirming wholebatches of data, e.g.receipt note exceptions

The Upstream Integration Model is a standard solution which can be scaledIf adopted by the major companies of the industry, the Upstream IntegrationModel will unlock the potential benefit of collaboration between manufacturersand suppliers

©2004 GS1

Process steps

High-level processes – "To Be" model

IntegrationAgreementAgree operationalrules & Conf irmAgreement

Align Product&CommercialMaster Data(incl.operationalrules)

PurchaseConditions

Demand &SupplySignals

Despatch,Receipt &Consumption

FinancialSettlement

Manufacturer

Supplier



EAN.UCC Identification Keys and Bar

Codes

©2004 GS1

Presentation Overview

• Which standards?• Global Trade Item Number (GTIN)• Global Location Number (GLN)• Serial Shipping Container Code (SSCC)

• How are they applied upstream?• Some examples

©2004 GS1

Trade item: Global Trade ItemNumber - GTIN

• A trade item is defined as any item (product orservice) upon which there is a need to retrieve pre-defined information and that may be priced or orderedor invoiced at any point in any supply chain.

©2004 GS1

Global Trade Item Number

©2004 GS1

Logistic units: Serial ShippingContainer Code - SSCC

• Logistic units: An item of any compositionestablished for transport and/or storage which needsto be managed through the supply chain

©2004 GS1

Serial Shipping Container Code(SSCC)

©2004 GS1

Locations: Global LocationNumber – GLN

Physical location• a single point of access with a physical address, such as a

particular room in a building, warehouse, warehouse gate,loading dock, delivery point, cabinet, cabinet shelf, or a roomwithin a building, as well as operational locations such as EDImailboxes

Legal entity• the legal organisation that is subscribed to the EAN.UCC

System, such as whole companies or subsidiaries, includingsuppliers, customers, financial services companies, and freightforwarders

©2004 GS1

Global Location Number - GLN

©2004 GS1

Company Prefix

• Worldwide unique

• Gives access to all the applications using EAN.UCCSystem identification standards

©2004 GS1

Application Identifiers (AI)

• To define the meaning and format of the information following in a datafield

• Application Identifiers have been defined for:• product and logistics unit identification, traceability data, dates,

quantity, measurements, locations, etc.

• Example: GTIN + Batch no, represented in a data carrier (UCC/EAN-128)

©2004 GS1

And now upstream….what?

• Raw material: A crude, unprocessed or partially processedmaterial, that is converted into a finished product by amanufacturer. This includes additives and preservatives.

• Examples: orange juice concentrate, oranges, bag of grain,beans etc, eggs, meat, cheese, essences, fragrance

• Packaging material: all the materials used to make thepackaging and the packaging itself. This includes additionalobjects (spoons etc)

• Examples: bottles, cups, lids, roll of foil pre-printed, labels, canetc.

©2004 GS1

“Generic” or Supplier specific trade items• Specifications are made by the Supplier and can be sold to multiple

customers.Manufacturer / Customer specific trade items

• Specifications are set by the customer. Material is made and sold forone customer only. Multiple Suppliers can sell the material.

Fixed Measure Trade Items• Always produced in the same version and composition (i.e. type,

weight, contents, design). The complete identification of a FixedMeasure Trade Item consists of an identification number.

Variable Measure Trade Items• Has at least one characteristic that varies whilst other characteristics

remain the same. This changing characteristic can be the weight,dimension, number of items contained or volume related. Thecomplete identification consists of both an identification number andinformation about the variable data.

Upstream: Definitions

©2004 GS1

And now upstream….how?

Allocating the GTIN, basic principles:

1. The Brand Owner, the organisation that owns the specificationsof the trade item regardless of where and by whom it ismanufactured, is responsible for the allocation of the GlobalTrade Item Number™ (GTIN™).

2. A GTIN is only changed if the change is relevant further downthe supply chain.

3. Each trade item that is different from another must be allocated aseparate, unique GTIN.

©2004 GS1

GTIN: 50029000111115 x 1 Qty x pricePayment of Order 3Invoice 3



All pallets/unit loads identified with (00) SSCCAdditional information

GTIN: 50029000111115, Quantity=1Receipt of Order 3Delivery 3:


GTIN: 10029000111117, Quantity=3Receipt of Order 1Delivery 1

GTIN: 50029000111115, Quantity = 1Supplier B, Plant 3 – 12,000 bottlecaps to Plant Z (one pallet)

Order 3

GTIN: 20029000111114, Quantity-2Supplier A, Plant 2 – 10000 bottlecaps to Plant X (two totes)

Order 2

GTIN 100290001111117, Quantity=3Supplier A, Plant 1 – 3000 bottlecaps to Plant Z (three boxes)

Order 1

GTIN: 20029000111114, symbol marked: YesTote of bottle caps, 5000

GTIN: 50029000111115, symbol marked: YesPallet containing 12 boxes

GTIN: 10029000111117, symbol marked: YesBox of bottle caps, 1000

GTIN: 029000111110, symbol marked: No (used for VMI)Bottle cap, plastic, white etcManufacturer Spec

Element Strings Used / Symbol Marking of the ItemsDescriptionProcess

Example 1 – Fixed Measure,Manufacturer Specific Material

©2004 GS1

New Process: GTIN: 022222777775 x 34 Qty x pricePayment of Order 2Invoice 2


All pallets/unit loads identified with (00) SSCCAdditional information


GTIN: 3011111444444, Quantity=20Receipt of Order 1Delivery 1

GTIN: 022222777775, Quantity-34Supplier B, 34 bags of saltOrder 2

GTIN 3011111444444, Quantity=20Supplier A, 20 bags of saltOrder 1

GTIN: 022222777775, symbol marked: YesSupplier B, 50 kg bag of salt

GTIN: 3011111444444, symbol marked: YesSupplier A, 50 kg bag of saltSupplier Spec


Example 2 – Fixed Measure, SupplierSpecific Material

©2004 GS1

As Is: Customer Item Number = 999888111, invoice amount = quantity (2000) X price perKgTo Be: GTIN 97612345000063, invoice amount = Weight (1975) X price per Kg

2000 KgInvoice

As Is: Customer Item Number = 999888111, quantity = 2000To Be: GTIN 97612345000063 x 1975 kg

Receipt of Order 1Delivery

As Is: Customer Item Number = 999888111, quantity = 2000To Be: GTIN 97612345000063, Weight = 2000 kg

2 000 KgOrder 1

GTIN: 97612345000063chemical product (in kg)Manufacturer Spec


Example 3 - Variable Measure,Manufacturer Specific Material

©2004 GS1

As Is: Item Number = ABC014567, invoice amount = Weight (160) X price per KgTo Be: GTIN 97612345000049, invoice amount = Weight (160) X price per Kg

150 KgInvoice 2

As Is: Item Number = ABC014567, invoice amount = Weight (2000) X price per KgTo Be: GTIN 97612345000049, invoice amount = Weight (2000) X price per Kg

2000 KgInvoice 1

Pallet: (00) SSCCIf delivery is made on a pallet

As Is: Item Number = ABC014567, quantity = 160To Be: GTIN 97612345000049, Weight = 160


Pallet: (00) SSCCIf delivery is made on a pallet

As Is: Item Number = 999888111, quantity = 2000To Be: GTIN 97612345000049, Weight = 2000



150 KgOrder 2


2 000 KgOrder 1

GTIN: 97612345000049chemical product (1 Kg)Manufacturer Spec


Example 4 – Variable Measure, SupplierSpecific Material


EAN.UCC B2B Standards(XML and EANCOM®)

©2004 GS1

All companies have developed their own solutions to share information withmajor suppliers (e.g. email, extranet access, EDI, etc)

• Different business process scenarios• Different data interchanges• Different integration technology

These customised solutions have proved to be inefficient and unsuitable tobe scaled within companies and across industry

ManufacturerS

S

S

ManufacturerS

S

S

ManufacturerS

S

S

ManufacturerS

S

S

Upstream Supply Chain – Current Situation

©2004 GS1

High-level processes – Upstream Integration Model

IntegrationAgreementAgree operationalrules & Conf irmAgreement Align Product

&CommercialMaster Data(incl. operationalrules)

PurchaseConditions

Demand &SupplySignals

Despatch,Receipt &Consumption

FinancialSettlement

Manufacturer

Supplier


Upstream Supply Chain – The Future

©2004 GS1

Upstream Integration Model (UIM)

• Standardises the business processes and datainterchanges between manufacturers and materialsuppliers for use in electronic communications

• Covers the following business areas:• Master Data Alignment• Purchase Conditions• Demand & Supply Signals (Material Forecasting)• Despatch, Receipt and Consumption (of goods)• Financial Settlement (Invoicing)

• Within an overall (manual) Integration Agreement madebetween the manufacturer and supplier

©2004 GS1

Demand &Supply Signals

IntegrationAgreement

DataAlignment

PurchasingConditions

Dispatch,Receipt &Consumption

FinancialSettlement

Manufacturer Process Supplier ProcessBuilding Blocks

Await shipment Pick & Pack goods

Receipt of goods Shipment

Check goods Goods Receipt Notification

Consume goods Consumption Notification

Invoice receipt Create invoice

Create Self-billing invoice Invoice receipt

Create Remittance Advice Payment Notification

Initiate Payment Payment receipt

Report Inventory Report Inventory

Gather material requirements

Integrate information

Plan production & supply

Confirm delivery

Agree on business rules Agree on business rules

Maintain Master Data Maintain Master Data

Agree Purchasing Conditions Agree Purchasing Conditions

Integration AgreementIntegration Agreement

Item Master DataItem Master Data

Purchase ConditionsPurchase Conditions

Net requirements

Purchase Order

Consumption Forecast

Purchase Order Confirmation

Delivery Plan

Dispatch Notification

Physical shipment of goods

Receipt Notification

Consumption Report

Invoice

Self-billing invoice

Remittance Notification

Physical Payment

InventoryInventory

Invoice confirmation Invoice confirmationInvoice confirmationInvoice confirmation

Replenishment Forecast(instead of Inv. and R. Forecast)

©2004 GS1

Block 4: Demand & Supply Signals

XML Schemas• Purchase Order• Purchase Order Response• Goods Requirements• Goods Requirements Response• Replenishment Proposal• Replenishment Request• Inventory Activity or Inventory Status

©2004 GS1

EANCOM® messages

• PRICAT, PRODAT, for Item General & Item Specific• CNTCND, for Purchase Condition• ORDERS, for Purchase Order• ORDRSP, for Purchase Order Response• SLSFCT, for Goods Requirements, Replenishment• INVRPT, for Inventory• DELFOR, for Delivery Plan• DESADV, for Despatch Advice• RECADV, for Receiving Advice• SLSRPT, for Consumption Report• INVOIC, for Invoice• REMADV, for Remittance Notification

©2004 GS1

Conclusions

• The Upstream Integration Model (UIM) is thefoundation for global standards, which are producedby GS1. They are expected to be released in Q1 2006.

• Global CPG manufacturers and suppliers are leadingimplementation of the UIM and EAN.UCC standardsunder the auspices of GCI.

• This will impact your business! Therefore, pleasestudy the UIM, prepare to adopt EAN.UCC standards,and join the GUSI Work Group.

©2004 GS1

For further information:

GS1Head OfficeT: +32 (0)2 788 78 00F: +32 (0)2 788 78 99E: [email protected]

Blue TowerAvenue Louise 326B-1050 BrusselsBelgiumwww.gs1.org

ecr europe forum '05. get the most out of communication standards upstream

Business

palletsunit

symbol marking

upstream integration

business process

upstream supply

global location

financial

consumption