You might think it's the glitzy new technologies that cause kinks in the supply chain (or create havoc with internal operations). And no doubt they do—just ask Nike or PetSmart. But more often than not, it's the older, established technologies that turn out to be the weak link—if for no other reason than they're in much more wide spread use than cutting-edge technologies.
Take the bar code, for example. Though the bar code has been in use for decades, tracking everything from cans of soup to rolls of carpet on their supply chain journeys, both technological and standardization problems still threaten its efficacy today. The technological problems, which defy easy resolution, can be particularly disruptive: A bar code that cannot be scanned often delays the movement of materials through a supply chain, costing everybody money. And if that supply chain stretches around the globe—as is increasingly the case, especially in the retail indust ry— the problems become that much more expensive and difficult to solve.
One stubborn problem has been inconsistency in bar-code verification: A manufacturer of consumer products uses Universal Product Code (UPC) bar codes that comply with all accepted international standards and specs, using a particular brand of verifier to quality-check the code. But when the product is shipped to the retail outlet, a different brand of verifier is used, producing different results. Both companies believe their readings are correct, which can make the resolution process a contentious one. In the meantime, operations come to a standstill while the dispute is hashed out.
To address rumored instances of inconsistent bar-code measurement, the Uniform Code Council (UCC), a not-for- profit organization that administers the UPC standards, conducted a global project with EAN International, a global organization that creates supply chain standards. Six leading bar-code verifier manufacturers participated in that study.
The research, which was carried out in both the United States and England, uncovered some interesting results. First, it turned out that all six verifier suppliers adhered to accepted standards such as ANSI and ISO specifications. But it also turned out that under the current ISO specification, the performance of two verifiers could differ from one another by a full letter grade and still meet the specified tolerance. That led the researchers to conclude that the tolerance for verifiers specified in ISO/EIC standard 15426-1 needed to be tightened. An amendment to the standards has been filed, and data collected on various vendors during the project will be shared with the vendors in an effort to improve their products.
While the verification story plays out, another bar-code related issue that could disrupt retail supply chains has emerged. That's the UCC's Jan. 1, 2005, "Sunrise harmonization initiative," which is aimed at simplifying worldwide commerce. To comply with the Sunrise initiative, all U.S. and Canadian companies must be able to scan both 8- digit EAN-8 and 13-digit EAN-13 bar-code symbols at the point of sale by the deadline. The EAN-8 and EAN-13 symbols are used globally except in the United States and Canada, where the 12-digit UPC code has been used to identify products for more than 30 years. That's forced manufacturers from other countries to re-label goods being sold in the United States and Canada with a 12-digit UPC symbol, creating additional expense and potential delays.
The Sunrise initiative has far-reaching implications for retail supply chains in North America, and different supply chain players will be affected in different ways. Retailers and distributors involved in retail supply chains need to expand systems,databases and all related applications to ensure their information systems can process 8- digit and 13-digit EAN symbols as well as 12-digit UPC symbols. Manufacturers and distributors of retail goods that mark their products with a UPC bar code do not have to change how they mark products, but if they receive products from overseas they should consider upgrading their equipment and systems to be able to identify products marked with EAN-8 and EAN-13 codes.
Supply chain disruptions from non-compliance with the Sunrise initiative will probably not be caused by large retailers or large manufacturers of consumer products, which likely already have the capabilities called for by the Sunrise initiative. However, small manufacturers and distributors may not be aware of the risks of non-compliance. Just as has happened with other supply chain initiatives, such as e-procurement, large companies must take control and overall responsibility of their global supp ly chains and make sure that all trading partners will comply with the Sunrise initiative. As always, a supply chain is only as strong as its weakest link.