March 28, 2013

Report urges wider use of existing bar-code standards to meet consumers' needs, improve supply chain efficiency

Companies not using capabilities to their fullest extent, new report says.

By DC Velocity Staff

Many companies fail to adopt and apply today's bar-code standards even though their wider use could improve supply chain efficiency and satisfy a growing consumer appetite for relevant product information, according to a new study from Capgemini Consulting, the technical standards organization GS1, and the retail group The Consumer Goods Forum.

Bar-code standards allow trading partners to read the data contained in the familiar black-and-white symbols. Traditionally, that information has been of interest only to manufacturers, wholesalers, retailers, and companies involved in warehousing and distribution. Now, however, mobile technologies are allowing consumers to scan the bar codes and see the data for themselves. This has led the end users to demand fresh and reliable information on product origin, ingredients, and environmental impact.

As a result, brand owners and retailers will be expected to add more data to their bar codes and ensure consistent quality of information regardless of how and where the codes are read. Much of this information could be added by using current standards. However, many companies—especially small and medium-size ones—are not taking advantage of the capability, according to the report, called The Future of Standards in the Consumer Goods and Retail Industry.

Bar codes could provide other types of information to address market demand. For example, because some consumers want environmental information about the products they buy, a common set of sustainability metrics should be developed, the report said.

To make all of this happen, supply chain data and information from entities outside the traditional supply chain, such as the marketing department, will have to come together, the report said.

In addition, the report recommended that the role of GS1 be expanded from a standards-defining body to a center of excellence for standards deployment. That would require the organization to get involved in verifying data quality. Respondents to an associated survey suggested that GS1 develop implementation guidelines and provide monitoring systems to ensure consistent adoption of bar-code standards. The lack of clear guidelines and oversight has contributed to supply chain inefficiencies and data inconsistencies, they said.

"Standardization will enable increased transparency in the supply chain across suppliers and retailers, which will allow for better demand management and replenishment synchronization, and thus improve inventory positions and product availability," said Kees Jacobs, a principal at Capgemini Consulting.

To view a copy of the report, go to: www.capgemini.com/the-future-of-standards-in-the-consumer-goods-retail-industry.

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