GS1 UniqueID GTIN Management

Transcription

1 Business Case GS1 UniqueID GTIN Management Executive Summary For over 40 years, the rules that govern when a Global Trade Item Number (GTIN) should or should not change have been repeatedly revised to keep pace with a changing retail landscape. The result is a set of rules that is overly complex and technical, making consistent allocation of GTINs and compliance with the existing rules a challenge for many businesses. The UniqueID project is dedicated to making the rules for GTIN management and the sharing of data about minor product changes simpler and more effective. Today s omni-channel consumer has driven companies to integrate online commerce into their retail strategies, and GTINs are becoming foundational and relevant to the digital shelf. However, as physical and online channels converge, a new set of challenges around data accuracy and the sharing of product information comes to light. Consumers want accurate and more detailed information about the things they shop for online even nuances in products that may have historically been considered minor. This need for consumer-facing unique product identification places additional strain on GTIN Allocation Rules that were created to serve supply chains. At the same time, product variations have increased due to manufacturing innovations, and regulatory pressures have increased due to heightened consumer expectations. What was once a simple choice at a local store shelf searching and comparing products in the real world now typically includes a trip to a digital shelf, which often lacks the accurate product information needed for shoppers to make informed purchase decisions. The GS1 UniqueID project was launched to solve this challenge. This fast-paced, structured industry effort is dedicated to making the rules for GTIN management and the sharing of data about minor product changes simpler and more effective independent of where and how consumers choose to shop.

2 In September 2015, Capgemini facilitated two trading partner pilot workshops in the United States and Europe to explore an industry-wide solution to unique product identification. Sixty-five retailer and brand owner attendees from over 20 companies were matched for interactive sessions to discuss preferred approaches to five sample use cases. In the end, participants agreed that consolidation and simplification of the GTIN Allocation Rules were a key priority, and work on this should be accelerated. They also wanted to find a common path forward for managing product assortments and GTIN reuse. Another area of consensus that emerged from these workshops was the need for industry to investigate how an optional product variant attribute could satisfy consumers need for detailed product information without impacting traditional B2B data used for trading partner ordering in those cases where minor product changes don t require a GTIN change. They affirmed that best practices should be established for this type of data exchange. Throughout this process, it has been important to reinforce the fact that it has always been possible (and will continue to be possible) to change GTINs more frequently than the existing GTIN Allocation Rules require. Brand owners have had the authority to change GTINs at their discretion, and such changes happen regularly in the market as governed by existing trading partner relationships. Based on workshop learnings, GS1 took action and began gathering structured feedback from industry experts pertaining to GTIN management. The pool of companies involved included original workshop participants as well as several large online companies. This business case document is a summary of the detailed input that was received from over 25 major multinational/global companies between November 2015 and January Examination by a team of GS1 staff members of detailed input collected between November 2015 and January 2016 identifies broad industry support for the following four major actions: Consolidate the existing GTIN Allocation Action 1 Rules into a set of clear, concise rules for GTIN management. Develop a clear, concise guideline that Action 2 provides a decision process for GTIN management and that is authored from a business perspective. Evaluate positive and negative industry Action 3 impacts of ending GTIN reuse (not Global Company Prefix reuse) and make recommendation on forward plan. Execute pilot work on variant data sharing Action 4 with industry partners that have prioritised this topic as a separate, but related, work effort. It has always been possible (and will continue to be possible) to change GTINs more frequently than the existing GTIN Allocation Rules require. Introduction Market drivers The GTIN Allocation Rules have become complicated and unclear, and the cost of changing a product s GTIN impacts the entire supply chain. However, not identifying trade items at the right level of detail to satisfy regulatory, trading partner and consumer demands also translates to significant costs. Consumers expect a consistent shopping experience, no matter how or where they buy products. When they visit a store, they can see and compare product differences like colour, packaging, assortments, minor ingredient changes and special promotions. This ability to compare is also present if two variations of the same product are slotted for substitution on a store shelf even without GTIN change. However, products that look different in the physical world often share the same identification in the digital world, making it impossible to distinguish one from another when shopping online. This lack of granularity has created a critical business need for companies to find ways to share more detailed data about versions of their products to meet consumer needs for accurate product information. Who is driving the work Senior-level business, e-commerce and IT decisionmakers from around the world, representing retailers, manufacturers, search engines and solution providers, have voiced their support for this work. Industry commitment The report recently released by The Consumer Goods Forum and Capgemini, Rethinking the Value Chain: New Realities in Collaborative Business, states that sociallynetworked consumers demand access to more information, more rapidly, in order to trust the products they buy and the companies that serve them. The report goes on to state that industry s goal is to improve trust by being more transparent and that online information should be more consistent with information on packaging, with an equal level of quality assurance. Industry must agree on a clear strategy for unique product identification and align initiatives and GS1 standards that enable provision of transparent information to consumers, according to the report. 2

3 With GS1 standards, we can provide accurate product information to better inform purchase decisions. Global online business The role of standards There are new pressures surrounding how companies identify their products, and industry would like to leverage and extend the GS1 system of standards to solve these challenges across the physical and digital worlds of commerce. Industry analysis Purpose of the analysis A clear case for change has been made for industry to lead and GS1 to facilitate a work effort designed to create a simpler and more functional set of rules around the management of GTIN changes. This effort will remove ambiguity around current GTIN management practices and help to achieve unique, persistent product identification to better serve the needs of both supply chain trading partners and consumers. A survey approach was chosen to capture feedback from participating companies. They were asked about GTIN management and product information sharing. This format was selected in order to minimise the time investment of industry participants and to capture results about company policies, practices and plans in a consistent way. In addition to the survey, one-on-one interviews were held with most participating companies to answer technical questions and capture detailed, deeper feedback on topics and questions that could not be answered through a simple yes or no or multiple choice response, e.g., questions about GTIN reuse. Objectives Determine the relevance of each of the existing GTIN Allocation Rules to each participating company Understand existing practices and challenges around GTIN management in industry Identify areas of potential collaboration to simplify and make rules for GTIN management more usable Participants The following companies dedicated their time and energy to a detailed analysis and interview process with regard to the future of GTIN Allocation Rules: Retailers Online Businesses Brand Owners... and a few others. 3

4 Tell me when I must change a GTIN and please keep it simple. Global brand owner Let s stop confusing identity with rules about price or promotion. Global online business Methodology A survey document was shared with all industry participants. It was designed to be shared collaboratively within a company to gain alignment on responses to two fundamental questions about each of the existing GTIN Allocation Rules. The questions asked for each rule were: Is this rule relevant to your business? Yes or No? If yes, which of the following represents your company s desired approach to handling changes of the type identified in each rule? -- Major product change that requires a new GTIN -- Minor product change that does not require a new GTIN, but that IS meaningful to consumers or trading partners and should be differentiated -- Minor product change that does not require a new GTIN, and IS NOT meaningful to consumers or to trading partners In all cases, attempts were made to include a one-on-one interview as part of the data-collection process. Interviews took an average of one to two hours and were facilitated by teams that consisted of a core GS1 Global Office group working alongside representatives of GS1 s local Member Organisations. Interviews included a review of each of the GTIN Allocation Rules and a gathering of industry input for rule improvement. Companies were also asked to identify those minor product variations that are relevant to consumers as well as to traditional supply chain stakeholders. Verbatim feedback and detailed notes were captured by a dedicated scribe during each interview. All responses from companies were captured in a master spreadsheet for analysis by the GS1 team. All data and quotations within this document have been anonymised. Conclusions All responses and verbal feedback were analysed to identify trends about existing GTIN Allocation Rules and rules about product assortments, GTIN reuse and mergers and acquisitions. The rules that generated the most varied responses in the survey were also identified and then analysed in more depth. As a final step, all verbatim responses and input were studied to identify any subtle trends that may not have been exposed clearly by mathematical data analysis. 2 rules that do not require GTIN change today for which GTIN change was favoured in the future (more than any other answer): Dynamic Assortments and Two or More Items Attached Together The result was broad industry support for four major actions: Consolidate the existing GTIN Allocation Action 1 Rules into a set of clear, concise rules for GTIN management. Eighty-eight percent of all responses from industry stated that the existing rules that call for a change in GTIN are relevant and should be considered as part of a refined set of rules for GTIN management that identify when a GTIN must change. of related survey responses supported the notion that all 88% current rules requiring a GTIN to be changed should be refined as part of a condensed set of GTIN management rules There was also strong response by participants that many of the rules that currently require GTIN change are similar enough to each other that it may be possible to combine them. In particular, those rules that relate to changes in the legal liability profile of a trading partner, such as ingredients, allergens, consumer declarations, etc. In addition to the rules that currently require GTIN change, a majority of respondents identified two additional rules where a GTIN change and/or sharing of detailed information about versions of products would be a preferred approach in the future. The first is the current GTIN Allocation Rule for Dynamic Assortments. This rule refers to products that are sold between trading partners at a case or assortment level and where the contents of the case or assortment can change without notice. Individual retail units that are part of a dynamic assortment should be individually and uniquely identified by their own GTIN. As the balance of the contents of a dynamic assortment changes, the current rules state that no GTIN change is required. Seventy-one percent of respondents stated that in the future, changes to dynamic assortments should either be identified with a unique GTIN change or that data should be exchanged between trading partners to clearly identify the changed content. This 71 percent included 50 percent of the brand owners polled and a significant majority of retailers and online businesses. The second current GTIN Allocation Rule that received strong feedback was the rule about Two or More Items Attached Together. This rule currently states that no GTIN change is needed when two or more items are bound together for promotional purposes. 4

5 Can two products share a set of product reviews? Multinational retailer In the ideal world, there is no GTIN reuse. Global brand owner Ninety percent of respondents believe that changes of this type should either be identified with a GTIN change in the future, or that data should be exchanged between trading partners to clearly identify unique characteristics of these trade items. This 90 percent included 50 percent of the brand owners polled and the vast majority of retailers and online businesses. Develop a clear, concise guideline that Action 2 provides a decision process for GTIN management and that is authored from a business perspective. With more than 50 hours of interviews logged with industry, the most frequent feedback received was the desire to create a clear guideline that makes compliance with any new set of rules about GTIN management simple. Further questioning revealed four essential needs that a future industry-wide guideline should address: A. Provide clear examples for all of the new rules for GTIN management. Each of the new rules should include clear black-and-white examples of when the GTIN for a product must change. The guideline may also benefit from relevant, clear examples of when GTINs do not need to change, where appropriate. Strong examples will make the decision-making framework more illustrative and more accessible to business and technical persons. B. Consider regulatory, trading partner and consumer needs as a framework for clear decisions about GTIN change management. A variety of internal tools and processes exist today within companies to help guide decisions about GTIN changes, and most are designed to make the decision process around GTIN management more focused on the three major business drivers behind the potential change: regulatory/ compliance concerns, trading partner needs and consumer information demands. C. Identify those minor product changes that are most relevant to consumers and trading partners. of product change scenarios that do not 66% require a GTIN change today were considered important enough for consumers and trading partners to be informed about in the future Two-thirds of the product change scenarios for which a GTIN change is not currently required were identified as relevant to consumers or to trading partners. Of these, respondents identified six minor product change scenarios that should require product data to be shared with consumers and trading partners in the future: Minor formulation changes Reconfiguration of consumer packs Product name and description changes Addition of a language Free item inside retail pack Retailer price labels D. Author the guideline from a business perspective rather than a technical perspective. Respondents felt strongly that any guideline be written from a position that is understandable across business functions, written in a way that makes compliance easy to assess, and penned by a team that can balance technical details with usability and simplicity. In other words, communicate the business process and value to those who may not be experts on the GS1 system, standards or product identification. Action 3 <10% >50% 100% Evaluate positive and negative industry impacts of ending GTIN reuse (not Global Company Prefix reuse) and make recommendation on forward plan. of all respondents currently reuse GTINs of brand owners polled have internal policies or systems that do not allow reuse of GTINs of online businesses polled prefer stopping the reuse of GTINs When asked about current GTIN reuse policies, the vast majority of respondents stated that they conform to current rules (e.g., 48 months after a product leaves the supply chain for CPG/grocery or general merchandise, 30 months after a product leaves the supply chain for apparel and no GTIN reuse for regulated healthcare trade items). Respondents were asked about potential benefits to industry and trading partners if the GTIN reuse rules were changed, and the following improvements were identified: Increased product traceability Higher transparency to the consumer Reduced confusion in the market and in supply chain data exchange systems Better brand visibility online Operational cost savings from removal of old trade items from internal systems Improved accuracy in sales analysis Simpler management of compliance issues between trading partners 5

6 There is real potential to merge a number of rules that are very similar in intention. Major retailer When asked what the ideal future GTIN reuse policy would look like, more than 50 percent of all respondents explicitly stated that the GTIN should never be reused, with most citing one or more of the above benefits as a reason. Action 4 Execute pilot work around variant data sharing with industry partners that have prioritised this topic as a separate, but related, work effort. More than 50 percent of brand owners polled stated that they have internal policies or systems that prevent the reuse of GTINs, citing challenges with data sharing across systems; performance tracking in data mining and analytics systems; the expansion of digital paths to purchase; and an increase in access to historical information about products online, secondary market issues and brand identity online. All online businesses polled responded strongly in favour of ceasing the reuse of GTINs, citing that trade items remain in online markets far longer than in traditional supply chains and that product data is crucial for consumers who reference online information about the products they buy sometimes long after they make a purchase. While the survey respondents represent a significant percentage of global commerce, the feedback from the respondents also identified that there may exist specific industries or sectors that have important perspectives on GTIN reuse that have not been included in this survey/ report. Because of this, it was determined that any next step forward should work to ensure inclusion of all perspectives and that all voices are heard and considered. This is the reason that the action is focused on evaluation of industry impact. There was high-priority interest from both brand owners and retailers for accelerated pilot work on the exchange of data about minor changes to products that do not trigger the need for GTIN change but that are important to trading partners or today s consumer. GS1 will continue to work with interested parties to execute such pilots and identify best practices. Additional considerations To revise the current GTIN rules into easy-to-understand, industry-relevant, actionable statements about GTIN management that are of value to industry, GS1 will ensure that the analysis of the existing set of rules is performed by a team that is familiar with both the technical and business implications of existing GTIN Allocation Rules. The extensive and personalised interview process yielded insights well beyond the basic questions asked in the survey. Many companies that have been considering the creation of internal guidelines or process maps to help their associates navigate the existing GTIN Allocation Rules chose to share their best practices. Current GTIN Allocation Rules Current GTIN Allocation Rules that require GTIN change Current GTIN Allocation Rules that do not require GTIN change Future rules about when GTIN must change Guideline An industry guideline that is authored from a business perspective and that includes a clear decision process to bring clarity to GTIN management for industry A path forward Above is a potential path forward that was identified based on consolidated industry feedback. It is presented here for consideration by any future working group(s). 6

7 We need to balance the benefits of changing the GTIN with the cost (or reality of the impact) to the supply chain. Major retailer Examples of simplification Industry identified a number of examples of how some of the existing 17 GTIN Allocation Rules that currently require GTIN to change at any level might be distilled into a consolidated set of rules about GTIN management. Of course, creation of a final set of condensed rules is work that would be completed by a GS1 Standards Development Working Group. However, these examples underscore the real possibility of accomplishing industry s goal of simplification. Here are three examples: A rule about GTIN management that could read Any change that affects the legal liability profile of a trading partner (ingredients, allergens, consumer declarations, etc.) could encompass the following current major GTIN Allocation Rules: Modified for season Major formulation change Marked price change for fixed measure items A third example could be the combination of two existing GTIN Allocation Rules into a rule about GTIN management that could be titled Change to declared net content or piece count: Declared net content Merchandise sold to retailer with additional free items Draft rules to consider While the above examples are only to be considered as input to a GS1 Standards Development Working Group, they are included here to highlight the potential for such a group to bring clarity to these rules. As the new set of rules is finally defined in the working group, a guideline that explains the proper interpretation of the final rule set will also be needed. Fresh vs. frozen Another example could be the combination of four existing GTIN Allocation Rules into a rule about GTIN management that could be titled Change to a bundle pack: Combination pack Bonus pack Two or more items attached together Pre-defined assortments During the survey process, an initial set of 10 rules about GTIN management was offered for consideration as input to any future working group(s). 1. Any change that affects the legal liability profile of a trading partner Ingredients, allergens, consumer declarations, etc. 2. Change to primary (consumer- or trading partneridentified) brand 3. Change to declared net content or piece count 4. Dimensional or gross weight change of +/- 20% 5. Change in function that affects interoperability or use 6. Removal of a certification with regulatory impact (e.g., kosher, UL, etc.) 7. Introduction of packaging with a new language 8. Change to a dynamic assortment* 9. Change to a bundle pack 10. Vintage of an item if vintage impacts price *There is clear agreement that changes to dynamic assortments require a new GTIN. However, there was not clear agreement on the definitions around dynamic assortments. For this reason, the suggestion is that a subteam is convened within a GTIN management working group to come to agreement/consensus. 7

8 Proposed actions/changes Convene a GTIN management working group A formal Call for Working Group Participation will be made at the end of January 2016 with a focus on the rules for GTIN management, pending approval of needed governance groups. The primary deliverables of this working group would be chartered as: A new set of rules about GTIN management that applies across global retail To be completed by June 2016 Development of a clear, concise guideline that provides a decision process for GTIN management and that is authored from a business perspective To be completed by June 2016 Structured analysis of the potential positive and negative industry impacts of ending individual GTIN reuse (not Global Company Prefix reuse) and recommendation on a forward plan To be completed by June 2016 It is recommended that any working group that convenes considers this business case document in its entirety as input to its chartered work and that a finalised list of rules about GTIN management be the group s first deliverable. Continue work on variant data sharing Some companies have expressed high-priority interest in pilot work on variant data sharing. This will require a clear, upfront definition of use cases where consumers or supply chain stakeholders are demanding differentiation of product versions. Use cases will be developed and analysed through planned pilot activities and GS1 along with industry will work to create a guideline for industry best practices. The concept of variant is a new feature offered in the May 2016 Global Data Synchronisation Network (GDSN) Major Release 3, but no implementation guidelines exist for this feature that would allow data pools to interoperate for variant data sharing. Below are a few use cases that have been identified to date: Nutritional and packaging use cases Minor changes that consumers care about but that do not require a GTIN change Ensure that more accurate data can be made available about versions of products Supply chain use cases Put away optimisation warehouse space allocation for minor product changes Planogram use cases Shelf planning for minor product changes Underutilisation truck cubing impacts for small changes at the unit level Reverse logistics Identification of versions of products returning into the supply chain Benefits and impacts of the proposed work Solving industry s unique identification challenge will benefit consumers and industry. Consumers Having the right product information at the right time helps deliver a seamless shopping experience across physical and digital channels. Industry Industry will compete more effectively in the new retail environment while building consumer trust and transparency A more consistent and easy-to-understand GS1 system will encourage industry use Accurate and granular product information will also help to comply with growing regulatory demands The early-phase work will include at least three pilots with industry that simulate exchanging variant data via the GDSN and/or other exchange mechanisms such as flat files, other data transport mechanisms, etc. Some work is taking place around the world in this area, and it is expected that the chosen pilots will include both industry work-in-progress as well as a structured pilot that includes known data pools. Each pilot will include retailer and brand owner participants. The industry interview process that was completed in December/January has helped identify and prioritise a number of important use cases on which pilot work might focus. 8

9 How to get involved Working group, workshops and expectations GS1 will launch a GTIN management working group on 31 January 2016, pending approval from needed governance groups. The proposed timeline for completion of the first two major deliverables a new set of rules about GTIN management and an industry guideline is June Participation When GS1 issues a call to action for a GTIN management working group, it will bring together all interested parties to work on an accelerated but still fully-process compliant schedule. It will be requested that all industry participants and GS1 Member Organisations directly involve both their technical and business-facing leads in the working group and that all commit to staying involved for the duration of the work effort. This approach is critical to ensuring that the group s output is both technically strong and relevant to industry business owners. Who is needed from industry To support the accelerated timeline of this proposed work, Google has volunteered space in its Cambridge, Massachusetts, USA and Zurich, Switzerland facilities for a two-day GS1 Standards Development Workshop to be held on 7-8 March Senior-level merchandising, marketing and supply chain decision-makers who can: Provide cross-functional insight into core business processes Drive consensus within their organisation on topics that may require compromise Articulate specific product change, distribution process and merchandising experiences Participants must be ready to commit to an accelerated, high-energy project What is needed from GS1 Member Organisations Representation by both business/industry engagement staff and technical staff Socialising the released Call to Action that will be issued at the end of January Attendance will be open to all (although space may be limited and all meetings will be governed by the GS1 GSMP IP policy), and the two locations will be connected by video-conference for portions of the workshop. Remote participants will be invited to join the conversation via online conference tools if possible. If you expect to attend this workshop, please Elena Tomanovich at elena.tomanovich@gs1.org as soon as possible to book your space. A subsequent workshop will be held during the GS1 Standards Event, which takes place April 2016 in Jersey City, New Jersey. Commitment to help with the heavy lifting of authoring and developing working group documents and outputs to ensure the most valuable use of time of industry participants Work to bridge local contacts of large multinational companies with each other to encourage consistency Identify the right persons from industry and encourage their participation in the working group Commit to a fast-paced standards development process To receive more information on the GS1 UniqueID project, please contact: Elena Tomanovich at elena.tomanovich@gs1.org GS1 is committed to maximising the value of time spent in these work sessions. These face-to-face work sessions will be carefully planned and executed so the majority of work required to achieve the group s objectives is completed at these sessions. Beyond the two dedicated sessions, participants should expect to be involved in periodic teleconferences between February and early May GS1 AISBL Blue Tower, Avenue Louise 326, BE 1050 Brussels, Belgium T +32 (0) F +32 (0) E contactus@gs1.org GS1 is a registered trademark of GS1 AISBL. All contents copyright GS1 AISBL Printed on recycled paper. 9