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ECR Europe Forum '05. Get the most out of communication standards upstream

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Get the most out of communication standards upstream: …

Get the most out of communication standards upstream:

EDI messages and bar codes have been great enablers for speeding up and improving the quality of supply chain processes between retailers and manufacturers. Now it is time to use them upstream. Learn how to apply these techniques with suppliers of raw materials and packaging.
Speakers:

Nicola Comiotto, Nestlé,

Regenald Kramer, GS1,

Miodrag Mitic, GS1,

Sarina Pielaat, GS1 Netherlands
Facilitated by
GS1 (formerly EAN International)

Published in: Business, Technology

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  • 1. Get The Most Out of Communication Standards Upstream! 10th ECR Europe Conference Paris, 26 April 2005 « GS1, a new name, a global vision together »
  • 2. SESSION OBJECTIVES • Brief you on a new marketplace development that is important to your business and to your customers • Learn about the business drivers and rationale behind the Upstream Integration Model (UIM) • Understand the foundations of the EAN.UCC System • Learn about the upstream application of EAN.UCC identification, bar coding and B2B message standards ©2004 GS1
  • 3. SESSION CONTENTS • Introduction to GS1 and a basic overview of the EAN.UCC System • The road from the ECR Integrated Suppliers Project to the Global Upstream Supply Initiative (GUSI) • Background and benefits of the GUSI Upstream Integration Model (UIM) • EAN.UCC identification keys and bar codes • EAN.UCC XML and EANCOM® message standards ©2004 GS1
  • 4. 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
  • 5. GS1 is… • A “not-for-profit” organisation • Neutral from the business partners • User driven and user governed • Committed to serve all companies, both multinationals and SMEs • A platform for collaborative agreements between business partners ©2004 GS1
  • 6. GS1 WORLD MAP GS1 Member Organisations Membership allocated on a direct 104 MOs representing company basis by GS1 1,000,000+ member companies in 155 countries ©2004 GS1
  • 7. BASIC OVERVIEW OF THE EAN.UCC SYSTEM ©2004 GS1
  • 8. ©2004 GS1
  • 9. ©2004 GS1
  • 10. GS1 standards drive consumer demand data availability! ©2004 GS1
  • 11. Efficient replenishment relies on GS1 standards! ©2004 GS1
  • 12. GS1 standards drive the WMS where demand and supply chains meet! ©2004 GS1
  • 13. Inventory planning and supply chain visibility rely on GS1 standards! ©2004 GS1
  • 14. GS1 standards enable the entire order to cash cycle! ©2004 GS1
  • 15. Adoption of GS1 standards drives down complexity and cost ! ©2004 GS1
  • 16. ECR Europe Integrated Suppliers pilot results in 1999-2000 • Inventory level held between trading partners down 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% ©2004 GS1
  • 17. Upstream Integration Model « GS1, a new name, a global vision together »
  • 18. Overview on current scenario S S S S S Manufacturer S Manufacturer S Manufacturer S Manufacturer S S S S All companies have developed their own solutions to share information with major suppliers (e.g. email, extranet access, EDI, etc) Different business process scenarios Different data interchanges Different integration technology These customized solutions have proved to be inefficient and unsuitable to be scaled within companies and across the industry ©2004 GS1
  • 19. Upstream Supply Chain - the scaling barrier Business Benefits Global S Benefits across C the industry A e L e th s ar E dard stan break er w ide to rri dustry ndation ling ba In fou he sca Current 1:1 gh t t hrou programs (varying from pilots to integration with Cost many suppliers) B No sharing of experience A Un coordinated actions R R No widely adopted standards ..divergence I Suppliers faced with different Approaches E R Complexity & Uncertainty Time ©2004 GS1
  • 20. Global Upstream Supply Initiative • In 2003, an informal group of CPG manufacturers started exploring the upstream supply chain areas for improvements. This led to the publication of the first version of the Upstream Integration Model (UIM). • A second version was published in 2004. It was submitted to GS1 as a basis for the development of new and amended EAN.UCC standards. • Today, GUSI is a part of GCI and a dedicated Work Group is established. Membership consists of manufacturers and suppliers of raw materials, ingredients and packaging. ©2004 GS1
  • 21. Evolution of GUSI 2003 2004 Group of manufacturers (Unilever, Nestlé, The original group expands to include new Henkel and Danone) explores upstream manufacturers and suppliers (P&G, Crown, supply chain areas for improvements Firmenich, Kappa Packaging, Novozymes, SCA, Van Genechten Packaging) Confirm that there is a strong potential for a No eMarketplaces or service providers common set of approaches and standards involved upstream Continue neutral facilitation Create an Upstream Integration Model (UIM) of processes, definitions and message needs Create UIM V2 and submit it to Global Standard Management Process to develop standard Positive support from EAN.UCC messages based on business requirements UIM V 1 is presented to experienced eSupply GUSI approaches GCI to gain approval as an Chain suppliers: official global initiative Positive reaction from suppliers in support of the initiative Positive response from GCI GUSI becomes part of GCI and a new organizational structure is agreed ©2004 GS1
  • 22. Evolution of UIM V 1 01/03 02/03 06/03 07/04 08/03 10/03 11/03  Explore phase  Initiative  Initiative  High level presentation presentation Change to selected to new Request suppliers manufacturers submitted to GSMP  Initial group  EAN.UCC  UIM V1 finalised  New Group set up and involvement and set up explore project approach (Manufacturer phase agreed s & Suppliers) started ©2004 GS1
  • 23. Evolution of UIM V 2 02/04 06/04 07/04 08/04 09/04  Validation  Industry  Standard process Requirement messages Team (IRT) development set up process started  Extended  UIM V2 finalised  Change Request group set submitted to IRT up and UIM V1 reviewing phase started ©2004 GS1
  • 24. Future Scenario - Upstream Integration Model Business Messages • Manufacturer- Processes • Set of standard Supplier Integration messages solution which can supporting accommodate business process different business scenarios process scenarios • The move to more real time exchange of data • Upstream SMI and instead of the batch Order Management oriented exchanges of the past are the two most common business • The focus on process scenarios UIM exceptions rather than sending and used in the CPG confirming whole batches of data, e.g. industry receipt note exceptions The Upstream Integration Model is a standard solution which can be scaled If adopted by the major companies of the industry, the Upstream Integration Model will unlock the potential benefit of collaboration between manufacturers and suppliers ©2004 GS1
  • 25. Process steps High-level processes – "To Be" model Manufactur er Integration Agreement Agree operational rules & Conf irm Align Product Agreement & Commercial Demand & Despatch, Purchase Financial Master Data Supply Receipt & Conditions Settlement (incl. Signals Consumption operational Integration rules) Agreement Agree operational rules & Conf irm Agreement Supplie r ©2004 GS1
  • 26. EAN.UCC Identification Keys and Bar Codes « GS1, a new name, a global vision together »
  • 27. 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
  • 28. Trade item: Global Trade Item Number - GTIN • A trade item is defined as any item (product or service) upon which there is a need to retrieve pre- defined information and that may be priced or ordered or invoiced at any point in any supply chain. ©2004 GS1
  • 29. Global Trade Item Number ©2004 GS1
  • 30. Logistic units: Serial Shipping Container Code - SSCC • Logistic units: An item of any composition established for transport and/or storage which needs to be managed through the supply chain ©2004 GS1
  • 31. Serial Shipping Container Code (SSCC) ©2004 GS1
  • 32. Locations: Global Location Number – 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 room within a building, as well as operational locations such as EDI mailboxes Legal entity • the legal organisation that is subscribed to the EAN.UCC System, such as whole companies or subsidiaries, including suppliers, customers, financial services companies, and freight forwarders ©2004 GS1
  • 33. Global Location Number - GLN ©2004 GS1
  • 34. Company Prefix • Worldwide unique • Gives access to all the applications using EAN.UCC System identification standards ©2004 GS1
  • 35. Application Identifiers (AI) • To define the meaning and format of the information following in a data field • 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
  • 36. And now upstream….what? • Raw material: A crude, unprocessed or partially processed material, that is converted into a finished product by a manufacturer. 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 the packaging and the packaging itself. This includes additional objects (spoons etc) • Examples: bottles, cups, lids, roll of foil pre-printed, labels, can etc. ©2004 GS1
  • 37. Upstream: Definitions “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 for one 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 Fixed Measure 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. The complete identification consists of both an identification number and information about the variable data. ©2004 GS1
  • 38. And now upstream….how? Allocating the GTIN, basic principles: 1. The Brand Owner, the organisation that owns the specifications of the trade item regardless of where and by whom it is manufactured, is responsible for the allocation of the Global Trade Item Number™ (GTIN™). 2. A GTIN is only changed if the change is relevant further down the supply chain. 3. Each trade item that is different from another must be allocated a separate, unique GTIN. ©2004 GS1
  • 39. Example 1 – Fixed Measure, Manufacturer Specific Material Process Description Element Strings Used / Symbol Marking of the Items Manufacturer Spec Bottle cap, plastic, white etc GTIN: 029000111110, symbol marked: No (used for VMI) Box of bottle caps, 1000 GTIN: 10029000111117, symbol marked: Yes Pallet containing 12 boxes GTIN: 50029000111115, symbol marked: Yes Tote of bottle caps, 5000 GTIN: 20029000111114, symbol marked: Yes Order 1 Supplier A, Plant 1 – 3000 bottle GTIN 100290001111117, Quantity=3 caps to Plant Z (three boxes) Order 2 Supplier A, Plant 2 – 10000 bottle GTIN: 20029000111114, Quantity-2 caps to Plant X (two totes) Order 3 Supplier B, Plant 3 – 12,000 bottle GTIN: 50029000111115, Quantity = 1 caps to Plant Z (one pallet) Delivery 1 Receipt of Order 1 GTIN: 10029000111117, Quantity=3 Delivery 2: Receipt of Order 2 GTIN: 20029000111114, Quantity=2 Delivery 3: Receipt of Order 3 GTIN: 50029000111115, Quantity=1 Additional information All pallets/unit loads identified with (00) SSCC Invoice 1 Payment of Order 1 GTIN: 10029000111117 x 3 Qty x price Invoice 2 Payment of Order 2 GTIN: 20029000111114 x 2 Qty x price Invoice 3 Payment of Order 3 GTIN: 50029000111115 x 1 Qty x price ©2004 GS1
  • 40. Example 2 – Fixed Measure, Supplier Specific Material Process Description Element Strings Used / Symbol Marking of the Items Supplier Spec Supplier A, 50 kg bag of salt GTIN: 3011111444444, symbol marked: Yes Supplier B, 50 kg bag of salt GTIN: 022222777775, symbol marked: Yes Order 1 Supplier A, 20 bags of salt GTIN 3011111444444, Quantity=20 Order 2 Supplier B, 34 bags of salt GTIN: 022222777775, Quantity-34 Delivery 1 Receipt of Order 1 GTIN: 3011111444444, Quantity=20 Delivery 2: Receipt of Order 2 GTIN: 022222777775, Quantity=34 Additional information All pallets/unit loads identified with (00) SSCC Invoice 1 Payment of Order 1 GTIN: 3011111444444 x 20 Qty x price Invoice 2 Payment of Order 2 New Process: GTIN: 022222777775 x 34 Qty x price ©2004 GS1
  • 41. Example 3 - Variable Measure, Manufacturer Specific Material Process Description Element Strings Used / Symbol Marking of the Items Manufacturer Spec chemical product (in kg) GTIN: 97612345000063 Order 1 2 000 Kg As Is: Customer Item Number = 999888111, quantity = 2000 To Be: GTIN 97612345000063, Weight = 2000 kg Delivery Receipt of Order 1 As Is: Customer Item Number = 999888111, quantity = 2000 To Be: GTIN 97612345000063 x 1975 kg Invoice 2000 Kg As Is: Customer Item Number = 999888111, invoice amount = quantity (2000) X price per Kg To Be: GTIN 97612345000063, invoice amount = Weight (1975) X price per Kg ©2004 GS1
  • 42. Example 4 – Variable Measure, Supplier Specific Material Process Description Element Strings Used / Symbol Marking of the Items Manufacturer Spec chemical product (1 Kg) GTIN: 97612345000049 Order 1 2 000 Kg As Is: Item Number = ABC014567, quantity = 2000 To Be: GTIN 97612345000049, Weight = 2000 Order 2 150 Kg As Is: Item Number = ABC014567, quantity = 150 To Be: GTIN 97612345000049, Weight = 150 Delivery Receipt of Order 1 As Is: Item Number = 999888111, quantity = 2000 To Be: GTIN 97612345000049, Weight = 2000 If delivery is made on a pallet Pallet: (00) SSCC Delivery Receipt of Order 2 As Is: Item Number = ABC014567, quantity = 160 To Be: GTIN 97612345000049, Weight = 160 If delivery is made on a pallet Pallet: (00) SSCC Invoice 1 2000 Kg As Is: Item Number = ABC014567, invoice amount = Weight (2000) X price per Kg To Be: GTIN 97612345000049, invoice amount = Weight (2000) X price per Kg Invoice 2 150 Kg As Is: Item Number = ABC014567, invoice amount = Weight (160) X price per Kg To Be: GTIN 97612345000049, invoice amount = Weight (160) X price per Kg ©2004 GS1
  • 43. EAN.UCC B2B Standards (XML and EANCOM®) « GS1, a new name, a global vision together »
  • 44. Upstream Supply Chain – Current Situation S S S S S Manufacturer S Manufacturer S Manufacturer S Manufacturer S S S S All companies have developed their own solutions to share information with major 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 to be scaled within companies and across industry ©2004 GS1
  • 45. Upstream Supply Chain – The Future High-level processes – Upstream Integration Model Integration Agreement Manufacturer Agree operational rules & Conf irm Agreement Align Product & Demand & Despatch, Commercial Purchase Financial Supply Receipt & Master Data Conditions Settlement Signals Consumption (incl. operational rules) Integration Agreement Agree operational Supplier rules & Conf irm Agreement ©2004 GS1
  • 46. Upstream Integration Model (UIM) • Standardises the business processes and data interchanges between manufacturers and material suppliers 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 made between the manufacturer and supplier ©2004 GS1
  • 47. Building Blocks Manufacturer Process Supplier Process Integration Agree on business rules Integration Agreement Agree on business rules Agreement Data Maintain Master Data Item Master Data Maintain Master Data Alignment Purchasing Agree Purchasing Conditions Purchase Conditions Agree Purchasing Conditions Conditions Report Inventory Inventory Report Inventory Purchase Order Net requirements Demand & Gather material requirements Plan production & supply Consumption Forecast Supply Signals Replenishment Forecast (instead of Inv. and R. Forecast) Purchase Order Confirmation Integrate information Confirm delivery Delivery Plan Await shipment Dispatch Notification Pick & Pack goods Dispatch, Physical shipment of goods Receipt of goods Shipment Receipt & Check goods Receipt Notification Goods Receipt Notification Consumption Consume goods Consumption Report Consumption Notification Invoice receipt Invoice Create invoice Create Self-billing invoice Self-billing invoice Invoice receipt Financial Invoice confirmation Invoice confirmation Invoice confirmation Settlement Create Remittance Advice Remittance Notification Payment Notification Initiate Payment Physical Payment Payment receipt ©2004 GS1
  • 48. Block 2: Master Data Alignment ©2004 GS1
  • 49. Block 2: Master Data Alignment XML Schemas • Item General • Item Specific ©2004 GS1
  • 50. Block 3: Purchase Conditions ©2004 GS1
  • 51. Block 3: Purchase Conditions XML Schema • Purchase Condition ©2004 GS1
  • 52. Block 4: Demand & Supply Signals Traditional Order Management (TOM) ©2004 GS1
  • 53. Block 4: Demand & Supply Signals Traditional Order Management (TOM) ©2004 GS1
  • 54. Block 4: Demand & Supply Signals Supplier Managed Inventory (SMI) ©2004 GS1
  • 55. 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
  • 56. Block 5: Dispatch, Receipt, Consumption TOM & SMI without Consignment ©2004 GS1
  • 57. Block 5: Dispatch, Receipt, Consumption TOM & SMI with Consignment (SMOI) ©2004 GS1
  • 58. Block 5: Dispatch, Receipt, Consumption XML Schemas • Despatch Advice • Receiving Advice • Consumption Report ©2004 GS1
  • 59. Block 6: Financial Settlement Invoicing with Non-Consignment ©2004 GS1
  • 60. Block 6: Financial Settlement Invoicing with Consignment ©2004 GS1
  • 61. Block 6: Financial Settlement Self-billing with Non-Consignment ©2004 GS1
  • 62. Block 6: Financial Settlement Self-billing with Consignment ©2004 GS1
  • 63. Block 6: Financial Settlement XML Schemas • Invoice • Invoice Confirmation • Remittance Notification ©2004 GS1
  • 64. 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
  • 65. Conclusions • The Upstream Integration Model (UIM) is the foundation for global standards, which are produced by GS1. They are expected to be released in Q1 2006. • Global CPG manufacturers and suppliers are leading implementation of the UIM and EAN.UCC standards under the auspices of GCI. • This will impact your business! Therefore, please study the UIM, prepare to adopt EAN.UCC standards, and join the GUSI Work Group. ©2004 GS1
  • 66. For further information: GS1 Blue Tower Head Office Avenue Louise 326 T: +32 (0)2 788 78 00 B-1050 Brussels F: +32 (0)2 788 78 99 Belgium E: info@gs1.org www.gs1.org ©2004 GS1
  • 67. Thank you for your attention! Questions? ©2004 GS1