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ECR Europe Forum '05. Get the most out of communication standards upstream
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Transcript of 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
©2004 GS1
©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%
« GS1, a new name, a global vision together »
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
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ManufacturerS
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ManufacturerS
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©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
IntegrationAgreementAgree operationalrules & Conf irmAgreement
« GS1, a new name, a global vision together »
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
GTIN: 20029000111114 x 2 Qty x pricePayment of Order 2Invoice 2
GTIN: 10029000111117 x 3 Qty x pricePayment of Order 1Invoice 1
All pallets/unit loads identified with (00) SSCCAdditional information
GTIN: 50029000111115, Quantity=1Receipt of Order 3Delivery 3:
GTIN: 20029000111114, Quantity=2Receipt of Order 2Delivery 2:
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
GTIN: 3011111444444 x 20 Qty x pricePayment of Order 1Invoice 1
All pallets/unit loads identified with (00) SSCCAdditional information
GTIN: 022222777775, Quantity=34Receipt of Order 2Delivery 2:
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
Element Strings Used / Symbol Marking of the ItemsDescriptionProcess
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
Element Strings Used / Symbol Marking of the ItemsDescriptionProcess
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
Receipt of Order 2Delivery
Pallet: (00) SSCCIf delivery is made on a pallet
As Is: Item Number = 999888111, quantity = 2000To Be: GTIN 97612345000049, Weight = 2000
Receipt of Order 1Delivery
As Is: Item Number = ABC014567, quantity = 150To Be: GTIN 97612345000049, Weight = 150
150 KgOrder 2
As Is: Item Number = ABC014567, quantity = 2000To Be: GTIN 97612345000049, Weight = 2000
2 000 KgOrder 1
GTIN: 97612345000049chemical product (1 Kg)Manufacturer Spec
Element Strings Used / Symbol Marking of the ItemsDescriptionProcess
Example 4 – Variable Measure, SupplierSpecific Material
« GS1, a new name, a global vision together »
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
IntegrationAgreementAgree operationalrules & Conf irmAgreement
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 2: Master Data Alignment
©2004 GS1
Block 2: Master Data Alignment
XML Schemas• Item General• Item Specific
©2004 GS1
Block 3: Purchase Conditions
©2004 GS1
Block 3: Purchase Conditions
XML Schema• Purchase Condition
©2004 GS1
Block 4: Demand & Supply SignalsTraditional Order Management (TOM)
©2004 GS1
Block 4: Demand & Supply SignalsTraditional Order Management (TOM)
©2004 GS1
Block 4: Demand & Supply SignalsSupplier Managed Inventory (SMI)
©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
Block 5: Dispatch, Receipt, ConsumptionTOM & SMI without Consignment
©2004 GS1
Block 5: Dispatch, Receipt, ConsumptionTOM & SMI with Consignment (SMOI)
©2004 GS1
Block 5: Dispatch, Receipt, Consumption
XML Schemas• Despatch Advice• Receiving Advice• Consumption Report
©2004 GS1
Block 6: Financial SettlementInvoicing with Non-Consignment
©2004 GS1
Block 6: Financial SettlementInvoicing with Consignment
©2004 GS1
Block 6: Financial SettlementSelf-billing with Non-Consignment
©2004 GS1
Block 6: Financial SettlementSelf-billing with Consignment
©2004 GS1
Block 6: Financial Settlement
XML Schemas• Invoice• Invoice Confirmation• Remittance Notification
©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
©2004 GS1
Thank you for yourattention!
Questions?