Unification of Bar-Code Standards

Within bar-coding, there have historically been two distinct standards, North America’s Uniform Product Codes (UPCs) and the rest of the world’s European Article Numbering (EAN) codes. The “Sunrise 2005” initiative, however, is convincing evidence that the situation is going to change. Another global trade barrier is about to be overcome.

The Deadline

Most products sold in North America today carry an eight-digit UPC bar code. A few years ago, a researcher at the Uniform Code Council, Inc. (UCC) the organization that administers the UPC, concluded that the aging code would run out of numbers sometime in 2005. Because the organization had to change the UPC to address the need for a larger number supply, it saw a chance to make other changes it had long been considering. Thus, the January 1, 2005 deadline was set by the UCC as the date that U.S. and Canadian companies will be expected to acquire the capability to scan and process a wider range of symbols at point-of sale. The change is expected to bring significant improvements to their logistics operations.

EAN and UCC: Working Together

The major element of the “Sunrise 2005” initiative is for companies to change their bar code systems to the Global Trade Item Number (GTIN) standard. GTIN (pronounced “Gee-tin”) was coined by the UCC as a term to describe a standard encompassing the EAN.UCC system’s data structures.

EAN.UCC is the acronym for “EAN International and The Uniform Code Council.” According to the organization’s website, EAN and UCC are voluntary standards organizations charged by their respective boards with the co-management of the EAN.UCC System and the Global Standard Management Process (GSMP).

The EAN.UCC System standardizes bar codes, EDI transactions sets, XML schemas, and other supply chain solutions for more efficient business. By administering the assignment of company prefixes and coordinating the accompanying standards, EAN International and the Uniform Code Council maintain the most robust item identification system in the world.

What is GTIN?

The GTIN is the foundation for the EAN.UCC System for uniquely identifying trade items (products and services) sold, delivered, warehoused, and billed throughout the retail and commercial distribution channels.

According to a UCC whitepaper GTINs provide an accurate, efficient and economical means of controlling the flow of products and information through the use of an all-numeric identification system. They are utilized on products and cases and are a key component of e-commerce transactions and communications. Users can be confident that a GTIN, when used correctly, will uniquely identify their products as they pass through the global supply chain to the ultimate end user. This global identification system ensures that the corresponding electronic communications will contain information unique to their company and products.

The most commonly recognized and used GTINs are the U.P.C. and EAN-13 symbols. However, a GTIN compliant bar-coding system must be able to read and store four types of codes (1):

* UPC: the eight-digit code that has been the standard in North America for 30 years
* EAN-8: the rest of the world’s eight-digit code
* EAN-13: the rest of the world’s 13-digit code
* Reduced Space Symbology (RSS): an emerging standard for compressing bar codes that are small enough to fit on prescription bottles or a piece of fruit

Becoming GTIN compliant means gaining the ability to read and use all of those standards, plus the ability to read one more digit (a minimum of 14 digits). The extra number, which is actually the first number in the string, identifies how products are packed.

Any Progress?

According to Logistics Management author Robert Spiegel, logistics managers at Fortune 500 companies seem to be better prepared for the transition to GTIN than their counterparts at small- and mid-sized companies. But heavyweight shippers are beginning to drive their suppliers to GTIN adoption.

For example Wal-Mart is pushing its vendors to become GTIN compliant. As a result, Coca-Cola has made the made the move. The retail industry, in fact, is one of the largest proponents of the GTIN standard. A senior analyst at The Yankee Group in Boston, Mike Dominy, was quoted by Spiegel: “From a volume point of view, pretty close to 80 percent of retailers have adopted the standard (1).”

While large retailers are apparently embracing the new standard, others have not. For example, the automotive industry has its own bar-coding systems and has turned its collective back on standards issued by the UCC. According to Spiegel, automotive is so deeply entrenched that it will not likely change any time soon.

Still others, like the healthcare industry, have a strong incentive to adopt GTIN. Because GTIN will encourage the RSS standard, which are small enough to fit on a prescription bottle, healthcare providers will be able to track medication from the manufacturer to the bedside.

There are other advantages to switching. For instance, analysts believe that the biggest beneficiaries of the “Sunrise 2005” initiative are companies involved in trade between North America and Europe. After the switch, shippers will not have to package and label goods headed for North America separately from those destined for the rest of the world. Spiegel quoted Dominy: “If everybody is following the standard, you will have a more seamless process. When you have stuff coming from overseas, you’ll also be able to do more cross docking because you won’t have to relabel.”

References:

(1) Spiegel, R. (June, 2003). Bar coding: an extra digit for logistics. Logistics Management.