Speaking the same language: Global standards may be the key to sparking a greater understanding among consumer package goods and retailers worldwide. (Tapping Technology).
Global Commerce Initiative (GCI) is a user group formed in 1999 to endorse collaborative standards in the consumer products industry around the world. They define their focus as "recommending consistent implementation of existing global standards and eliminating divergences in the implementation of these standards; encouraging the best user input of business needs on a global level for development of new standards; agreeing upon global business process recommendations; and eliminating process barriers between continents." In short, GCI encourages the world to speak the same language.
To create the language, GCI looks to EAN.UCC (European Article Numbering International/Uniform Code Council). The two standards bodies officially formed a partnership in 1990, signing an agreement to co-manage global standards. They agreed that the varying code structures used worldwide needed to be changed to unique codes common to the entire consumer products industry. EAN.UCC developed identifier codes for individual products, the Global Trade Item Number (GTIN), and location, Global Location Number (GLN), to be used across international borders.
The GTIN is a number code that uniquely identifies a product throughout the global supply chain, while the GLN uniquely defines the location, such as a purchasing department, warehouse or retailer. Why is this important? Returning to the earlier analogy, the restaurant diners want to order items off the same menu. One diner orders in Spanish, while another orders in English. Although each wants the same dish, language barriers may slow down the ordering process and result in an incorrect translation. If a unique code were used to define the product, the problem would be solved. The GTIN gives the product a common code to ensure that product X is always known as product X, simplifying global flow.
While the GTIN offers consistency to the global language of a product, the GLN lends consistency to the global location. The GLN changes "the warehouse on the corner of Third and Vermont" to a unique code understood on a global level.
Other global identifiers created by EAN.UCC include: the Global Service Relation Number (GSRN), recognizing the relationship between a business and an individual; the Serial Shipping Container Code (SSCC), recognizing logistics units; and the Global Returnable Asset Identifier (GRAI) and the Global Individual Asset Identifier (GIAI), recognizing returnable and individual assets.
Recently, EAN.UCC created the Global Standards Management Process (GSMP) to further advance the promises made by the partnership 12 years ago to deliver a single, uniform approach to global standards management. Several top manufacturers are already participating in GSMP, including Procter & Gamble, Kraft Foods Inc. and CocaCola Enterprises Inc.
How are these unique codes used throughout the global supply chain? To answer this question, it is necessary to review the consumer products industry's progression from a paper-based system to an Internet-based system. Approximately 30 years ago, Electronic Data Interchange (EDI) was born from the idea that paper-based purchase orders and other paper-based means of communication were too time-consuming and contributed to human error. Although EDI allowed computers to speak to computers, the process was slow and costly. In the 90s, advances in computer language brought about Standard Generalized Markup Language (SGML), a subset of HTML, which was an improvement on EDI but not a long-term solution.
XML is a programming language that enables a computer to determine if a code within an e-mail, Web page or document corresponds to a product, price, address or any other coded information. XML creates a new framework for business, aligning trade information across international borders within a common database.
For all of these elements to work and foster successful global e-commerce, the data must be in sync. UCCnet, a subsidiary of UCC created in 1998, offers an Internet-based forum where global item synchronization and item registry can occur. UCCnet allows all user companies, regardless of size or geographic location, to match up their language.
Soon globalized standards will not just be the best way to trade worldwide--it might be the only way. For example, EAN.UCC recently announced that all North American retailers should be able to scan GTINs by Jan. 1, 2005. Failure to accommodate the GTIN may result in additional costs, system malfunctions and product-to-market delays. We all want the same thing in the consumer products industry: reduced costs, decreased shipment and delivery inaccuracies, increased profits and more open communication throughout the supply chain. If we can agree to that, maybe we're already speaking the same language.
Pamela Stegeman, vice president of industry affairs, Grocery Manufacturers of America, directs initiatives on global standards, technology, trade relations and food security. She can be reached at 202-337-9400.
Food Forum is an opinion column designed to open discussion on industry issues. Submissions may be sent via fax to Megan Ladage at 312-654-2323 or e-mail at email@example.com.