Know the Risk. Prevent the Loss.

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1 Know the Risk. Prevent the Loss. What do bar code related chargebacks mean to your bottom line? Elizabeth Montgomery Stratix Corporation

2 Product Identification UPC/EAN Used for Item Level Marking to be scanned at Point of Sale UPC-A is a fixed length of 12 digits (GTIN-12) EAN-13 is a fixed length of 13 digits (GTIN-13) Encoded Information = GS1 Company Prefix + Item Reference Number + Check Digit (EAN includes country code) Allowable Sizes: 80% to 200% Magnification

3 Ticket Examples with UPC-A Bar Codes

4 Carton Identification GS1-128 Formerly knows as UCC/EAN-128 Utilizes the bar code format known as SSCC-18 Unique serialized identification for each carton Used in conjunction with ASN to identify shipment content (number cannot be reused for at least 12 months) 2 digit Application Identifier of (00) + 18 digits 18 digits = Extension Digit + GS1 Company Prefix + Serial Number + Check Digit

5 GS1-128 Label Example (00) Application Extension Company Serial Check Identifier Digit Prefix Number Digit (Always 00) (Always 1 digit) (Combined length is 16 digits) (1 digit)

6 Compliance with retailers shipping guidelines has become challenging for vendors of consumer goods, particularly in light of the increasing financial penalties for non-compliance. Commonly known as chargebacks, these fines typically shave 2% to 10% of a manufacturer s overall revenue (National Chargebacks Management Group). From Reducing Shipping-Related Chargebacks by Larry Willett, President California Distribution

7 Role of Bar Codes in the Supply Chain Designed to allow the user to capture useful data at a rapid pace with a high degree of accuracy Necessary for point of sale scanning Integral part of the EDI process by identifying product on ASN s Used for automated receiving of product in Trading Partner DC s

8 Know the Risk Chargebacks can be a result of labels not being scanned because of improper label placement Fixed mount and high speed scanning systems require that the bar code be placed in a very specific location Human readable information can be correct but the bar code format may be wrong resulting in an unscannable bar code

9 Prevent the Loss Validate Bar Code Format Code 128 Std is not the same as SSCC-18 Verify Bar Code Encodation Human readable must match decoded number Check Bar Code Size Follow Trading Partner min and max requirements Ensure Proper Label Placement Avoid corners and areas that may be obscured

10 Bar Code Print Quality ANSI was established in 1990 and is made up of 9 parameters that grade the print quality of bar codes Industry standard for acceptability is ANSI Grade of C, but some retailers require a minimum of an ANSI Grade of B (i.e. Lord & Taylor and Macy s) Scanning is NOT the same as verifying

11 Know the Risk The leading source of non-compliance and resulting chargebacks is poor bar code print quality An in-house quality assurance program can assure that most print quality problems are avoided Chargeback costs are as preventable as they are painful due to the fact that print quality is often overlooked until it causes a problem

12 Prevent the Loss Printed bar codes must be verified in order to guarantee scannability Verification testing is recommended at the beginning, middle, & end of each print run Each bar code must be scanned 10 times from top to bottom to obtain an Avg. ANSI Grade

13 Case Study Sean John Business Drivers Impact on Business Solution Failure to meet customer requirements Poor label quality was a significant component of unintentional deductions Reduce Deductions: Lack of knowledge about ANSI and how to read an ANSI report These drivers necessitate: Forming an intracompany team. Self-realization that their was a real problem not just a profit center deduction from customer Seeking advice from subject matter expert - Stratix Determining root cause of GS1 128 label issues Secured ANSI tool Stratix Xaminer Elite bar code verifier Incorporated a step-bystep process for ensuring clarity and quality Used ANSI test results to provide guidance for necessary adjustments. After working through these steps, we were able to work with our customer to explain the measures we have taken to improve our labels. Interestingly enough, this process has not only reduced our overall expense offset volume, it has also helped us improve our internal process and collaboration. Juanita Reyes, Director of Credit & Collections Sean John 13

14 Ensure Use of Proper Media When thermal transfer printing, a thermal transfer ribbon with a higher resin content should be used to resist smudging Ribbons with a high wax content should be avoided because they smudge easily Be sure to choose a ribbon and label combination that perform well together

15 Ensure Use of Proper Media When using direct thermal labels, a premium coated label stock should be chosen Premium coated direct thermal labels reduce wear on printheads and produce higher quality bar codes Always avoid using UPS or Fed Ex label stock These are special NIR labels that cause no-read problems on visible red scanners

16 Unacceptable GS1-128 Labels

17 Know the Risk Lower cost media may save money up front, but generally results in higher total expenses Inferior materials may cause printheads to burnout sooner or produce poor quality bar codes, which ultimately lead to higher chargebacks for unscannable labels Environmental conditions such as sunlight, temperature, and abrasion can impact label quality after being printed, but before being scanned

18 Prevent the Loss Appropriate media is a required investment in order to guarantee that the highest quality bar codes are produced Printing methods such as thermal transfer or direct thermal are recommended Seek advice from an industry expert if you are unsure which products are right for your application

19 Case Study Quetico LLC Business Drivers Impact on Business Solution Reduce Deductions: High internal standards for all products Failure to meet strict customer requirements for bar code print quality Poor quality labels causing unintentional chargebacks These drivers necessitate: Seeking advice from subject matter expert - Stratix Determining root cause of GS1 128 shipping label failures Secured ANSI tool Stratix Xaminer Elite bar code verifier Procured premium quality labels from Stratix that achieved ANSI Grade A for print quality After unsuccessful results of passing grades and to avoid any kind of chargebacks, Haggar Clothing introduced us to Stratix Corporation. Stratix produces high quality labels and the customer service provided by their team is excellent. We have been successfully producing Grade A verified labels without issues. Virginia Barraza, Operations Manager Quetico LLC 19

20 Monitor Printer Performance Printhead maintenance is the most critical component in maintaining printer performance and bar code print quality Printheads and rollers should be cleaned often using a cotton swab with isopropyl alcohol to remove dirt/debris and adhesive build-up Certified technicians should be used for all service and maintenance

21 Know the Risk Over time printheads burnout or get scratched causing white lines thru the bar code that makes them unscannable Improper heat settings often result in poorly printed bar codes that are unable to be scanned

22 Prevent the Loss Upfront maintenance investments extend the longevity of the printer and can eliminate costly non-compliant labels Printheads should be monitored and replaced regularly Operators should be trained on how to make adjustments to settings (heat, speed, pressure) so changes can be made for optimum bar code quality

23 Case Study Star Children's Dress Business Drivers Impact on Business Solution Reduce Deductions: Failure to meet customer requirements Label issues causing chargebacks from most customers These drivers necessitate: Seeking advice from subject matter expert - Stratix Determining root cause of label failures i.e. smudging Secured ANSI tool Stratix Xaminer Elite bar code verifier Procured premium quality labels from Stratix Incorporated process for ensuring label acceptability before leaving warehouse Before standardizing to Stratix labels, we were receiving chargebacks from most of our vendors for label issues. We worked with Stratix to procure our labels and use the Xaminer Elite verifier. Since our change several years ago, we have cut our chargebacks to almost nothing. Ken Dippold, Director of IT Star Children s Dress Co., Inc. 23

24 Summary Understand the risks outlined and seek advice from industry experts on how to prevent unnecessary losses associated with bad bar codes Advantages: Product arrives on the sales floor in a timely manner Reduce/eliminate chargebacks from Trading Partners Become a valued supplier/vendor

25 The Choice is Yours... Your money can go here... Or here...

26 QUESTIONS 26

27 Contact Us Elizabeth Montgomery - Sales Manager Ext **Come see us at Booth #13**

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