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SCeBF Evolution of the UPC and Data Synchronization Richard Randall, QRS Corporation May 20, 2003

SCeBF Evolution of the UPC and Data Synchronization Richard Randall, QRS Corporation May 20, 2003. Agenda. Who is QRS and the QRS Catalogue What is the UPC How retailer industry has benefited Evolution of the UPC  EAN  GTIN Data Synchronization vs. Data Normalization

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SCeBF Evolution of the UPC and Data Synchronization Richard Randall, QRS Corporation May 20, 2003

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  1. SCeBF Evolution of the UPC and Data Synchronization Richard Randall, QRS Corporation May 20, 2003

  2. Agenda • Who is QRS and the QRS Catalogue • What is the UPC • How retailer industry has benefited • Evolution of the UPC  EAN  GTIN • Data Synchronization vs. Data Normalization • The role of a Global Registry • UCCnet’s GLOBALregistry

  3. Retailer Branded Good Distribution Private Label Retailer Strategy Differentiate Software Services Collaborate Data Exchange Transact Manufacturer/ Supplier Vendor QRS Network Connect Branded Goods Manufacturing QRS’ EC Strategy for Retailer Success

  4. General Merchandise and Apparel Grocery and Consumer Packaged Goods • Top 20 General Merchandise retailers – $530B in sales • Top 20 General Merchandise manufacturers – $60B in sales • 19 of top 20 food retailers – $200B in sales • 9 of the top 15 Packaged Goods manufacturers – $270B in sales QRS Overview Profile: • Founded in 1988 in partnership with IBM, public ’93 (QRSI) • 8,000+ customers in retail supply chain • 2002 revenue – $136M • Providing B2B e-commerce supply chain services • Corporate headquarters San Francisco Bay Area, with offices in New York, Los Angeles, Boston, Richmond (VA), Toronto, London, Paris Customers:

  5. QRS Overview Applications & Services: Hosted & Software Services In-Store Services QRS Exchange QRS Sourcing QRS Insight QRS Retail Intelligence Services QRS Catalogue Trading Community Management • Enabling & Support • Program Management • Dedicated Enabling Professionals • 7x24 Customer Support • Industry Consultants • Customer Conferences & Web-inars • Services • Data Exchange – EDI “mailboxing” (Traditional VAN and IP based) • Managed EC -- Web Forms (EDI to Web), EDI-to-FAX, etc. • UPC Management • Merchandise Ticket and UCC-128 Label printing “Gee Whiz:” • Over 300,000 trading partnerships enabled • More than 500 million electronic documents per year • Manage over 90 million active UPC/EANs • 300,000 store visits annually to monitor price competition & accuracy

  6. Retailer B Retailer C Retailer A QRS Catalogue Over 90 million items from over 4,000 vendors, distributors, wholesalers, and manufacturers Improved timing, reduced errors, increased sales, and overall reduced expenses Vendor A Distributor B EDI QRS Catalogue Supplier C Wholesaler D XML EDI XML Manufacturer E System edits and Customer Support greatly improves data reliability and integrity Improved vendor discipline/compliance Since vendor’s data is the same to all retailers, a centralized database/catalog provides significant efficiency – one connection – consistent format & quality Vendor F Distributor G

  7. Department Store/GMA 2,000,000+ items Mass Merchant 200,000-500,000 items Grocery Store 50,000 items Fashion – 1,000s of new items daily Highly branded – lots of vendor info 3K price changes weekly Product Synchronization Database • Not a “shopping/consumer” catalog • Database for synchronizing product information between retailers and their suppliers • Historically used by department store vertical… Why?…

  8. Number System Character Module 10Checkdigit Manufacturer Number Unique Item Reference Number to Color/Size Level Company Prefix (Block ID) What is the UPC (Universal Product Code) • Industry standard for product identification – facilitates supply chain efficiencies • Standard administered by the UCC (Uniform Code Council)

  9. Benefits of UPC Retailer • Eliminates need for ticketing • Ability to efficiently identify unique product at Point-of-Sale • Facilitates EDI • Facilitates more advanced initiatives such as: • Cross-Docking/Assumed Receiving • Scan Based Trading • Auto Replenishment • Efficiencies of scanning at receiving, POS, Physical inventory Supplier/Manufacturer • Facilitates EDI • More accurate orders • Fewer invoice discrepancies • Product gets to stores faster • Improved in-stock position • Efficiencies of scanning

  10. Evolution of the UPC • Beat out OCR and magnetic strip • Internationally became the EAN (European Article Number) • Same barcode structure and checkdigit formula as UPC, but 13-digits • First two digits are Country Code • Can make a UPC into an EAN by adding a leading “0” (Country Codes for North America are 00-09) • The GTIN (Global Trade Item Number) • Sunrise 2005 • Truly global standard • Same barcode structure and checkdigit formula as UPC/EAN, but 14-digits • Beyond retail… 12-digit UPC 13-digit EAN

  11. Quick GTIN Q&A What does the acronym “GTIN” stand for? • Global Trade Item Number What is GTIN? (Hint: What are GTINs?) • The new 14-digit structure to uniquely identify trade items, comprising the existing EAN.UCC data structures When is the GTIN “sunrise” date? • January 1, 2005 Will the UPC and EAN be retired after 2005? • No! What was the reason for the new 14-digit structure? • Because we are running out of UPC Block IDs – wrong • To create a truly global standard for product identification Who will potentially use (or not use) the GTIN-14? • Probably – Manufacturers and retailers dealing in cases of a single trade item • Probably not – Manufacturers dealing cases composed of multiple trade items

  12. The GTIN “Family” 14-digits for database format & electronic communications: 00123456789012 01234567890123 00000012345678 12345678901234 12345678901234 Global Trade Item Numbers include: • Existing • UPC (UCC-12) • EAN (EAN/UCC-13) • EAN/UCC-8 • SCC-14 (ITF-14) • New (2005 Sunrise) • GTIN-14 (EAN/UCC-14)

  13. Widget X Case of 12 Widget X’s Pallet of 4 cases of Widget X GTIN-14 Usage • The first digit of a GTIN-14 is a level of packing indicator • A higher level of packing of a unique trade item can have the same “base” GTIN number: • with a higher first digit, indicating a higher level of packing of the item • with the correct checkdigit UPC-12: 123456 000018 GTIN-14: 00 123456 000018 Pre-pack UPC-12: 123456007215 GTIN-14: 00 123456007215 or Pre-pack UPC-12: 123456 00721 5 GTIN-14: 00 123456 00721 5 or GTIN-14: 10 123456 000015 GTIN-14: 30 123456 000019 If a GTIN-14 begins with a zero, the number is actually one of the other, shorter GTIN data structures. The actual GTIN type may be determined by the number of leading zeros on a GTIN-14.

  14. Widget X, Y, & Z Mixed Case of 4 each of Widget X, Y, & Z Wrong GTIN-14: 20123456 00003 8 Pallet of 4 mixed cases Pre-pack UPC-12: 123456 013241 GTIN-14:00123456 013241 or Pre-pack UPC-12: 123456 01324 1 GTIN-14: 00 123456 01324 1 or GTIN-14: 30 123456007216 GTIN-14 Usagecontinued X UPC-12: 123456 00001 8 Y UPC-12: 123456 000025 Z UPC-12: 123456 000032 • The first occurrence of a GTIN-14, always working from lower packing level to higher packing level, is a “0” • A packing indicator of “0” does not necessarily indicate that the GTIN represents the consumer unit • A higher level packing indicator can only be used if the lower pack level contains all the same trade item • Packing Indicator “9” reserved for variable measure/price Pre-pack UPC-12: 123456 00721 5 GTIN-14: 00 123456 007215 Wrong GTIN-14: 20123456 000038 Note: When dealing with a UPC the second digit of the GTIN-14 will/must always be a zero.

  15. Number System Character Module 10Checkdigit Manufacturer Number Unique Item Reference Number to Color/Size Level Company Prefix (Block ID) How is UCC dealing with a limited number of blocks? • Conservation • Creating additional Company Prefixes by increasing the length of the prefix (which reduces the the number of UPCs available to the vendor to assign)

  16. Retailer B Retailer C Retailer A QRS Catalogue Over 90 million items from over 4,000 vendors, distributors, wholesalers, and manufacturers Improved timing, reduced errors, increased sales, and overall reduced expenses Vendor A Distributor B EDI QRS Catalogue Supplier C Wholesaler D XML EDI XML Manufacturer E System edits and Customer Support greatly improves data reliability and integrity Improved vendor discipline/compliance Since vendor’s data is the same to all retailers, a centralized database/catalog provides significant efficiency – one connection – consistent format & quality Vendor F Distributor G

  17. Synchronization What is in Company B’s database is the same as what is in Company A’s database Key is data is not changed by user or system Key for automating processes between companies – have to have the same data Leads to retailer requirements to vendors that content on all media must match – labels, literature, databases, etc. Normalization Data is changed to meet certain standards/rules Key for searching across a database, and for consistent “look and feel” Data Synchronization vs. Normalization Two different objectives, which require separate fields within the database or two separate databases

  18. Retailer C Retailer A Retailer B Global Registry • Concept: • Vendors would typically load products on local/regional catalogs of their choice, and a subset of the data elements would be forwarded from the regional catalogs to the UCCnet registry • Retailers could then find in the registry where the data resides, and be routed to the appropriate data pool (long term direction) • Registry – a router or “yellow pages” that routes data requests to the appropriate appropriate data pool. • Data Pool – Third-party catalogs, such as the QRS Catalogue which enable vendors on industry standards related to product information, and ultimately publish the aggregated data of multiple vendors in one database accessible by registries or directly by retailers. Vendor A QRS Catalogue World’s largest – 90 mil. items 4,000 vendors Distributor B Supplier C Regional Data Pool (Catalog) 1 Wholesaler D Global Registry Regional Data Pool (Catalog) 2 Manufacturer E Regional Data Pool (Catalog) … n Vendor F Distributor G

  19. R V V V Catalog 2 Catalog 3 Various data synchronization models Current: Retailer uses several catalogs

  20. R R V V V V V V Catalog 2 Catalog 3 Catalog 2 Catalog 3 Various data synchronization models Current: Retailer uses several catalogs Current: Retailer uses a single catalog

  21. UCCnet R R R V V V V V V V V V Data Pool 3 Data Pool 2 Catalog 2 Catalog 3 Catalog 2 Catalog 3 Various data synchronization models Current: Retailer uses several catalogs Current: Retailer uses a single catalog Future: Retailer uses registry to locate catalog (data pool)

  22. UCCnet GLOBALregistry • The UCC established a subsidiary, UCCnet to provide additional services to their members. • UCCnet’s primary service is their GLOBALregistry • Phase 1: GLOBALregistry is actually a “thick” registry holding up to 70 attributes per item with data loaded from enablers and data pools. • Phase 2: when technology and standards are defined, GLOBALregistry is a true registry, routing requests for data to the registered data pool. • QRS Catalogue a preferred partner of UCCnet

  23. UCCnet R R R V V V V V V V V V Data Pool 3 Data Pool 2 Catalog 2 Catalog 3 Catalog 2 Catalog 3 Various data synchronization models Current: Retailer uses several catalogs Current: Retailer uses a single catalog Future: Retailer uses registry to locate catalog (data pool) • Issues: • Architecture for “Phase 2” • Efficiency/response time of making two hops • Schema or attribute list for different industry sub-segments • Language translation, regional pricing and regulations, . . . • Synchronization vs. Normalization

  24. For more information, contact QRS – • Phone: 800-UPC-TALK (800-872-8255) • Web: www.qrs.com • E-mail: Sales sales@qrs.com Support cshelp@qrs.com Careers careers@qrs.com Alliances alliances@qrs.com • Richard Randall, QRS Industry Consultant 510-215-3765 or rrandall@qrs.com

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