Transcript Slide 1

GS1 US Implementation Initiatives
in Fresh Foods and Apparel
March 2011
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of McKinsey & Company is strictly prohibited
GS1 Visibility Standards Framework
Fresh Food Industry Initiatives
GS1 US
March 2011
Fresh Food Safety and Traceability
▪
Key drivers
1. Restoring consumer confidence
2. Food safety regulation requires electronic
traceability
▪
Key issues
1. Industry wants one way to do Traceability
▫ Demand side wants – alignment across all
perishables/fresh food categories
▫ Supply side – alignment across “buy” side
(retail and foodservice)
2. Demand side is asking for a compelling
business case/ROI
▫ Opportunity to leverage supply chain
efficiencies
 Hence the need for an Integrated Fresh
Food Traceability Initiative
4
Integrated Fresh Food Traceability
Initiative
 Key Objectives
– Aligning of Traceability Requirements across all Fresh Food and Demand
side (both Retail and Food Service Operators)
– Uncovering supply chain efficiency opportunities for all stakeholders
– Building a business case for Traceability for all stakeholders
▪
Complements and Builds upon PTI and other Traceability Initiatives
▪
▪
▪
▪
▪
Meat and Poultry
Seafood
In Partnership with Supply and Demand side Associations
Building a case for ‘Fresh’ with McKinsey & Co.
Confirmed End User (Recipient) Companies
– Retailers – 4 retailers (one very large and 3 regional companies)
– 2 Food Service Operators and Distributors
© GS1 US 2010
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Integrating Fresh Food Traceability across
Fresh, Retail and Foodservice
2009
GS1
Company
Prefix and
GLN
Foodservice
2010
2011
GTIN,
Encode barcodes,
and Phase 1
Attributes for
GDSN
2012
Scan
inbound
barcodes,
and Phase 2
Attributes for
GDSN
2013
2014
Scan
outbound
barcodes, and
Phase 3
Attributes for
GDSN
2015
Goal: 75%
adoption in
industry
Retail
‘Perimeter’
GS1
Company
Prefix and
GTIN
Produce
Meat & Poultry
Encode
and scan
inbound case
barcode
Item
and Case
ID and
barcodes
adopted
Q3: Traceability
Guidelines
Q1: Traceability
Guidelines
Seafood
Deli, Bakery,
Dairy
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Scan
outbound
case
barcode
Item
and Case
ID and
barcodes
adopted
The Fresh Food Initiative Structure
GS1 US Food Industry Executive Committee
Composition: CEO of Industry Assoc. + 1 Rep from Steering Committee of Initiative
Foodservice GS1 US
Standards Initiative
Governance
Steering Committee
Executive Committee
Advisory Council
Working Groups
Task Groups
Produce Traceability
Initiative
Governance
Leadership Council
Executive Committee
Assoc/Commodity IG
GS1 MO IG
Working Groups
Meat & Poultry Initiative
Seafood Initiative
Governance
mpXML
Steering Committee
Governance
NFI Exec Committee
Working Groups
Working Groups
While traceability is the ultimate goal, Fresh bar coding offers
an opportunity to fundamentally alter the Fresh Foods industry
From…
▪
▪
Traceability
▪
To….
Limited visibility into product origins (lot
number or shipment date) at the case or subcase level
Initiatives to add traceability are typically
within the four walls of an organization and
offer no added benefits up / down the chain
▪
No ability to differentiate between like
products
▪
▪
▪
Ability to identify product history and every point
of transformation throughout the chain
Single unified standard throughout the supply
chain to easily share information
Ability for Center-store type merchandising,
including promotions for specific farms
Ability to create differentiated brands
Branding
▪ Imprecise understanding of what products are
▪
Inventory
Management
▪
Efficient
cashiers
▪ Full visibility into what products are on the shelf
out on the shelf
No visibility into when individual products will
shrink
Non-bar coded Produce items require manual
lookup and entering of PLU’s during check-out
as well as expected shelf-life
▪
▪
Produce items will be scanned at check-out with
the same accuracy and speed as any other item
Utilizing self-checkout will be as easy for
Produce items as it is for other barcoded items
This is an opportunity to replicate the benefits of
Center Store to all Fresh categories
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Objectives of pilot study
9
▪
Build a business case to quantify the benefits of adding
standard barcodes to Fresh cases, including:
– Identifying potential productivity improvements to all
members of the supply chain
– Quantify the value of faster surgical recalls
– Understand the potential to drive higher sales by adding
additional transparency into a grower’s product
▪
Identify incremental value to the supply chain of adding
barcodes at the item level
▪
Assess how the value of the barcodes varies by Fresh category
(e.g., Meat/Poultry, Seafood, Produce)
▪
Identify opportunities for further alignment of traceability
requirements/CTEs
Critical Tracking Events by Logistic Unit
for Supplier/Supplier Distribution Center
Potential for
additional data
Required Data
Inbound data for DC Receipt
•Product/Pallet ID and/or
• Case Aggregation (including quantity)
• Case IDs
• Lot/Batch Number
• Ship Date
• Origin ID (Location)
• Receipt Date
• Transport ID
• Receipt ID (Location)
Distribution
center
Receipt
Product creation
and packaging
Receipt
Product creation
Product Packaging/
and packaging/
repackaging
repackaging
Packaging/RePackaging data for DC
• Pallet ID and/or
• Case Aggregation (including quantity)
• Case IDs
• Lot/Batch Number
• Date
• Location ID
Pallets or Case
Pallets or Case
Outbound data for DC Shipping
• Pallet ID and/or
• Case Aggregation (including quantity)
• Case IDs
• Lot/Batch Number
• Ship Date
• Transport ID
• Origin ID (Location)
• Destination ID (Location)
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Shipping
Product Discard
Shipping
Product Discard
• Pallet ID and/or
• Case Aggregation (including quantity)
• Case IDs
• Lot/Batch Number
• Date
• Location ID
Critical Tracking Events by Logistic Unit
for Distribution Center
Inbound data for DC Receipt*
• Pallet ID and/or
• Case Aggregation (including quantity)
• Case IDs
• Lot/Batch Number
Distribution
• Ship Date
center
Pallets or Case
• Origin ID (Location)
• Receipt Date
Receipt
• Transport ID
• Receipt ID (Location)
Order Fulfilling data for DC*
• Pallet ID and/or
Product Receipt* Product creation Pallets or Case
• Case Aggregation (including quantity) Product creation
Product
and packaging/
and packaging
• Case IDs
repackaging
Packaging/RePackaging
• Item IDs
Quality Control Process
• Lot/Batch Number
Move to Storage/Location
• Date
• From Location ID (shelf location)
Produce Processing Data
• To Location ID (warehouse dock)
Order Fulfill*
•Store ID
Product Ship*
•Shipment ID?
Outbound data for DC Shipping*
• Pallet ID and/or
• Case Aggregation (including quantity)
• Case IDs
• Lot/Batch Number
• Ship Date
• Transport ID
• Origin ID (Location)
• Destination ID (Location)
* Required CTEs
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Shipping
Pallets or Case
Packaging/RePackaging data for DC
• Pallet ID and/or
• Case Aggregation (including quantity)
• Case IDs
• Lot/Batch Number
• Date
• Location ID
Quality Control data for DC
• Pallet ID and/or
• Case Aggregation (including quantity)
• Case IDs
• Lot/Batch Number
• Date
• QC Process ID
• Location ID
Move to Storage data for DC
• Pallet ID and/or
• Case Aggregation (including quantity)
• Case IDs
• Lot/Batch Number
• Date
• Location ID
Produce Processing data for DC
• Pallet ID and/or
• Case Aggregation (including quantity)
• Case IDs
• Lot/Batch Number
• Date in
• Date out
• Location ID
Critical Tracking Events by Logistic Unit
for Store Operations
Distribution
center
Pallets or Case
Receipt
Inbound data for Store Receipt
Product creation
• Pallet ID and/or
and packaging
• Case Aggregation (including quantity)
• Case IDs
• Lot/Batch Number
Pallets or Case
• Ship Date
• Origin ID (Location)
• Receipt Date
• Transport ID
• Receipt ID (Location)
Floor Stock data for Store
• Pallet ID and/or
• Case Aggregation (including quantity)
• Case IDs
• Lot/Batch Number
• Item ID
• Quantity
• Date
• Location ID
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Retail store
Product
packaging/Product creation Pallets or Case
and packaging/
repackaging
repackaging
Shipping
Packaging/RePackaging data for Store
• Pallet ID and/or
• Case Aggregation (including quantity)
• Case IDs
• Lot/Batch Number
• Item ID
• Date
• Location ID
Receipt
Product packaging/
repackaging
Floor Stocking
Product Discard
Point-ofsale to consumer
Point of Sale data for Store
•Lot/Batch Number ???
• Item ID
• Quantity
• Date
• Location ID
Pallets or Case or Item
Product Discard data for Store
• Pallet ID and/or
• Case Aggregation (including quantity)
• Case IDs
• Lot/Batch Number
• Item ID
• Quantity
• Date
• Location ID
We expect data capture needs per Fresh
category to be minimal throughout the study
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We will require participants to allow us to observe
the following processes on-site and track data
across the following Fresh categories
Observe the following processes to help understand the
implications of the initiative
▪
Retailers
▪
▪
▪
▪
▪
▪
Distributors
▪
▪
▪
▪
Growers/
Farmers
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Receiving of Fresh cases in relevant categories
(e.g., Meat, Seafood, Produce)
Cashier check-out of both coded and non-coded
items
Product reordering / Inventory Management
Processes related to minimizing shrink (e.g., cooler
rotation)
Restocking and selection of product to restock
Product receiving
Pallet breakdowns
Product shipment
The team has
conducted previous
visits to Distributors
and Growers, so
additional visits will
be on an as-needed
basis only
Initial product receipt and identification
Blast chilling
Product shipment
Use the following products for the pilot
study
▪
Meat &
Poultry
Produce
Seafood
▪
▪
▪
Store processed meat /
primal cuts
Ground beef
Case ready poultry
Pork product
▪
▪
Leafy greens
One citrus product
▪
▪
Tilapia
Shrimp
Critical Tracking Event Data
TRACED PRODUCT ELEMENTS CAPTURED
INPUT PRODUCT ELEMENTS CAPTURED
QUANTITY (Cases
with LBS for VW, or LOT CONTROL DATE
Item for POS)
EVENT ID
EVENT
OWNER (HQ) GLN
EVENT DATE
EVENT LOCATION
GLN
GTIN
BATCH/LOT
1-Product Creation\Repackaging







2-Product Shipment







Opt
Opt
3-Product Receipt







4.X-Case Product Depletion (4.1
Foodservice Ingredient; 4.2 Shrink;
4.3 Donated)







5-Consumer Product Sale To
Consumer-DataBar




†

†
Event
Data
INPUT GTIN
INPUT BATCH/LOT
INPUT QUANTITY
(Cases)

††

TRANSPORTATION ELEMENTS CAPTURED
Product
Data
Input
Data
LOT CONTROL DATE SHIPMENT NUMBER
© GS1 US 2011
Scanned
Calculated
ORIGIN GLN OR
ADDRESS
††


Transport
Data
Source of Data:
Can be Preset
DESTINATION GLN
OR ADDRESS
Can be scanned
from Invoices
Contact Information
GS1 US
Michele Southall
Princeton Pike Corporate Center
1009 Lenox Drive, Suite 202
Lawrenceville, NJ 08648 USA
T +1 609.620.4542
E [email protected]
www.GS1US.org
Connect with the GS1 US community on
© 2010 GS1 US™
Apparel Item Level Readiness
Programs
GS1 US
March 2011
GS1 US Visibility Framework
Why is EPC RFID a good fit for Apparel?
It improves the shopping experience
• More Accurate Inventory
• Move from an industry average of 63% to 95%
• Inventory labor savings
•
•
•
Inventory taking productivity increased by 96%
200 items per hour compared to 12,000 items an hour with RFID
18% reduction in the time it takes associates to locate product
• Out-of-stock reductions
• Reductions by as much as 50%
• Sales increases
• Examples from 2%-20%
*Source - University of Arkansas RFID Research Center
EPC RFID in North America
“…Macy’s Inc., JCPenney and Dillard’s
are demonstrating commendable
foresight in recognizing the long-term
competitive implications of RFID. “
- Apparel Magazine’s 2010 RFID Report
© GS1 US 2011
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EPC RFID in North America
• Retailers and Brands globally are adopting
–
–
–
–
–
–
–
–
Walmart
JC Penney
American Apparel
Macy’s
Dillard's
VF Corporation
Levi
Gap/Banana Republic
• Additional Retailers Implementing in 2011
• Products and Solutions are being purchased
– One retailer purchased over 10,000 handhelds
– Another retailer purchased thousands of handhelds
– Another retailer purchased hundreds of handhelds, tagging stations, and 50 POS
Scanners
– ABI Research predicts +1 Billion RFID tags will be used in global apparel markets
in 2011. 43% of those are intended for NA alone.
GS1 US supporting EPC as the Solution
• Apparel industry engagement
 GS1US is taking a leadership role by engaging the market leaders
• Joining Academic, Industry, and individual Retailer EPC/RFID advisory boards
• Supporting individual retailers and suppliers with their UPC to EPC transition
• Providing on-site retailer and supplier support
 Educate, Validate, and Initiate
• Leveraging the GS1US developed EPC Adoption Roadmap
• Supporting technology providers:
 Serialization
 Applicator & Label interoperability
 Address challenges with EPC technology
• Providing standards assessment and process analysis
© GS1 US 2010
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Readiness Programs
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Apparel Item Level Readiness - Retailers
• Standards education and readiness assessment
– Knowledge transfer on the GS1/EPCglobal standards and how they support Item
Level Tagging (web-based and quarterly teleconferences)
•
•
•
•
Identification
Tags
Readers
Data Sharing
– Education on encoding a EPC (GTIN to EPC)
– Serialization best practices and support
• Access and guidance through the EPCglobal Roadmap and Support
Tools
• Access to Privacy Guidelines and Use of EPC Symbol
• ONS Registration dependent on license of GS1 US Company Prefix
– Private label - ensures identifier authenticity
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Apparel Item Level Readiness - Retailers
• Advisory support
–
–
–
–
Understand their phase of development and scope of their initiatives
Visit with their team, conduct a site survey
Gather an understanding of specific challenges/support needed
Development and Execution of specific support program
• Item Level Rollout management
– Development of a Trading Community Management Program
• Supplier on-boarding support with key features including:
–
–
–
–
GS1 US support team
Development of an Supplier Engagement Plan
Supplier Support Program Offerings
Reporting, Scorecarding ,Feedback Loops supported
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Apparel Item Level Readiness - Suppliers
Tiered Programs include:
• Standards education and readiness assessment
– Knowledge transfer on the GS1/EPCglobal standards and how they support Item
Level Tagging (web-based and quarterly teleconferences)
•
•
•
•
Identification
Tags
Readers
Data Sharing
– Education on encoding a EPC (GTIN to EPC)
– Serialization best practices and support
• Access and guidance through the EPCglobal Roadmap and Support
Tools
• Access to Privacy Guidelines and Use of EPC Symbol
• Advisory support
–
–
–
–
Understand their phase of development and scope of their initiatives
Visit with their team, conduct a site survey
Gather an understanding of specific challenges/support needed
Development and Execution of specific support program
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Apparel Item Level Readiness - Suppliers
• Basic Supplier Readiness Program:
– Knowledge transfer on the GS1/EPCglobal standards and how they support Item
Level Tagging (web-based and quarterly teleconferences)
– Education on encoding an EPC (GTIN to EPC)
– Interactive adoption roadmap, with live access to the tasks and tools needed to build
your program
– Access to GS1/EPCglobal Privacy Guidelines and education on the use of the
guidelines (web-based).
– Serialization best practices and support
• Intermediate Supplier Readiness Program:
– Recommended for programs focused on a limited number of GTINS in production
– In addition to the benefits of the Basic Program includes:
• On-site EPC readiness assessment
•
Advanced Supplier Readiness Program:
– Recommended for large/roll-out programs
– Development of a company-specific standards implementation roadmap and
guidance on use for key staff.
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The EPC Adoption Roadmap
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GS1 US EPC Adoption Roadmap
The EPC Adoption Roadmap is an online guide through the activities necessary to
implement an Electronic Product Code/Radio Frequency Identification (EPC/RFID)
solution.
http://www.gs1us.org/epcroadmap
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