Get The Most Out of Communication Standards Upstream!

Transcription

1 Get The Most Out of Communication Standards Upstream! 10 th ECR Europe Conference Paris, 26 April 2005 «GS1, a new name, a global vision together»

2 SESSION OBJECTIVES Brief you on a new marketplace development that is important to your business and to your customers Learn about the business drivers and rationale behind the Upstream Integration Model (UIM) Understand the foundations of the EAN.UCC System Learn about the upstream application of EAN.UCC identification, bar coding and B2B message standards

3 SESSION CONTENTS Introduction to GS1 and a basic overview of the EAN.UCC System The road from the ECR Integrated Suppliers Project to the Global Upstream Supply Initiative (GUSI) Background and benefits of the GUSI Upstream Integration Model (UIM) EAN.UCC identification keys and bar codes EAN.UCC XML and EANCOM message standards

4 INTRODUCTION TO GS1 Mission: To lead the design and implementation of global standards to improve the supply and demand chain Roles: Develop global, open, multi-sectorial standards Train and educate on the standards Promote and help to implement standards, thus facilitating best business solutions Ultimate Objective: To be the number One Standards Organisation in the world for the management of supply and demand chains

5 GS1 is A not-for-profit organisation Neutral from the business partners User driven and user governed Committed to serve all companies, both multinationals and SMEs A platform for collaborative agreements between business partners

6 GS1 WORLD MAP GS1 Member Organisations 104 MOs representing 1,000,000+ member companies in 155 countries Membership allocated on a direct company basis by GS1

7 BASIC OVERVIEW OF THE EAN.UCC SYSTEM

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10 GS1 standards drive consumer demand data availability!

11 Efficient replenishment relies on GS1 standards!

12 GS1 standards drive the WMS where demand and supply chains meet!

13 Inventory planning and supply chain visibility rely on GS1 standards!

14 GS1 standards enable the entire order to cash cycle!

15 Adoption of GS1 standards drives down complexity and cost!

16 ECR Europe Integrated Suppliers pilot results in Inventory level held between trading partners down by 40% Administrative cost reduction 20 % for the manufacturer 5 % for the supplier Order fulfilment lead times reduced by 40% Reduction of production costs of 6% Service levels approaching 100%

17 Upstream Integration Model «GS1, a new name, a global vision together»

18 Overview on current scenario S S S S S Manufacturer S Manufacturer S Manufacturer S Manufacturer S S S S All companies have developed their own solutions to share information with major suppliers (e.g. , extranet access, EDI, etc) Different business process scenarios Different data interchanges Different integration technology These customized solutions have proved to be inefficient and unsuitable to be scaled within companies and across the industry

19 Upstream Supply Chain - the scaling barrier Business Benefits Current 1:1 programs (varying from pilots to integration with many suppliers) S C A L E Industry wide standards are the foundation to break through the scaling barrier Cost Global Benefits across the industry B A R R I E R No sharing of experience Un coordinated actions No widely adopted standards..divergence Suppliers faced with different Approaches Complexity & Uncertainty Time

20 Global Upstream Supply Initiative In 2003, an informal group of CPG manufacturers started exploring the upstream supply chain areas for improvements. This led to the publication of the first version of the Upstream Integration Model (UIM). A second version was published in It was submitted to GS1 as a basis for the development of new and amended EAN.UCC standards. Today, GUSI is a part of GCI and a dedicated Work Group is established. Membership consists of manufacturers and suppliers of raw materials, ingredients and packaging.

21 Evolution of GUSI 2003 Group of manufacturers (Unilever, Nestlé, Henkel and Danone) explores upstream supply chain areas for improvements Confirm that there is a strong potential for a common set of approaches and standards upstream Create an Upstream Integration Model (UIM) of processes, definitions and message needs Positive support from EAN.UCC UIM V 1 is presented to experienced esupply Chain suppliers: Positive reaction from suppliers in support of the initiative 2004 The original group expands to include new manufacturers and suppliers (P&G, Crown, Firmenich, Kappa Packaging, Novozymes, SCA, Van Genechten Packaging) No emarketplaces or service providers involved Continue neutral facilitation Create UIM V2 and submit it to Global Standard Management Process to develop standard messages based on business requirements GUSI approaches GCI to gain approval as an official global initiative Positive response from GCI GUSI becomes part of GCI and a new organizational structure is agreed

22 Evolution of UIM V 1 01/03 02/03 06/03 07/04 08/03 10/03 11/03 Explore phase Initiative presentation to selected suppliers Initiative presentation to new manufacturers High level Change Request submitted to GSMP Initial group set up and explore phase started EAN.UCC involvement and project approach agreed UIM V1 finalised New Group set up (Manufacturer s & Suppliers)

23 Evolution of UIM V 2 02/04 06/04 07/04 08/04 09/04 Validation process Industry Requirement Team (IRT) set up Standard messages development process started Extended group set up and UIM V1 reviewing phase started UIM V2 finalised Change Request submitted to IRT

24 Manufacturer- Supplier Integration solution which can accommodate different business process scenarios Upstream SMI and Order Management are the two most common business process scenarios used in the CPG industry Future Scenario - Upstream Integration Model Business Processes UIM Messages Set of standard messages supporting business process scenarios The move to more real time exchange of data instead of the batch oriented exchanges of the past The focus on exceptions rather than sending and confirming whole batches of data, e.g. receipt note exceptions The Upstream Integration Model is a standard solution which can be scaled If adopted by the major companies of the industry, the Upstream Integration Model will unlock the potential benefit of collaboration between manufacturers and suppliers

25 Process steps High-level processes "To Be" model Manufactur er Supplie r Integration Agreement Agree operational rules & Conf irm Agreement Integration Agreement Agree operational rules & Conf irm Agreement Align Product & Commercial Master Data (incl. operational rules) Purchase Conditions Demand & Supply Signals Despatch, Receipt & Consumption Financial Settlement

26 EAN.UCC Identification Keys and Bar Codes «GS1, a new name, a global vision together»

27 Presentation Overview Which standards? Global Trade Item Number (GTIN) Global Location Number (GLN) Serial Shipping Container Code (SSCC) How are they applied upstream? Some examples

28 Trade item: Global Trade Item Number - GTIN A trade item is defined as any item (product or service) upon which there is a need to retrieve predefined information and that may be priced or ordered or invoiced at any point in any supply chain.

29 Global Trade Item Number

30 Logistic units: Serial Shipping Container Code - SSCC Logistic units: An item of any composition established for transport and/or storage which needs to be managed through the supply chain

31 Serial Shipping Container Code (SSCC)

32 Locations: Global Location Number GLN Physical location a single point of access with a physical address, such as a particular room in a building, warehouse, warehouse gate, loading dock, delivery point, cabinet, cabinet shelf, or a room within a building, as well as operational locations such as EDI mailboxes Legal entity the legal organisation that is subscribed to the EAN.UCC System, such as whole companies or subsidiaries, including suppliers, customers, financial services companies, and freight forwarders

33 Global Location Number - GLN

34 Company Prefix Worldwide unique Gives access to all the applications using EAN.UCC System identification standards

35 Application Identifiers (AI) To define the meaning and format of the information following in a data field Application Identifiers have been defined for: product and logistics unit identification, traceability data, dates, quantity, measurements, locations, etc. Example: GTIN + Batch no, represented in a data carrier (UCC/EAN- 128)

36 And now upstream.what? Raw material: A crude, unprocessed or partially processed material, that is converted into a finished product by a manufacturer. This includes additives and preservatives. Examples: orange juice concentrate, oranges, bag of grain, beans etc, eggs, meat, cheese, essences, fragrance Packaging material: all the materials used to make the packaging and the packaging itself. This includes additional objects (spoons etc) Examples: bottles, cups, lids, roll of foil pre-printed, labels, can etc.

37 Upstream: Definitions Generic or Supplier specific trade items Specifications are made by the Supplier and can be sold to multiple customers. Manufacturer / Customer specific trade items Specifications are set by the customer. Material is made and sold for one customer only. Multiple Suppliers can sell the material. Fixed Measure Trade Items Always produced in the same version and composition (i.e. type, weight, contents, design). The complete identification of a Fixed Measure Trade Item consists of an identification number. Variable Measure Trade Items Has at least one characteristic that varies whilst other characteristics remain the same. This changing characteristic can be the weight, dimension, number of items contained or volume related. The complete identification consists of both an identification number and information about the variable data.

38 And now upstream.how? Allocating the GTIN, basic principles: 1. The Brand Owner, the organisation that owns the specifications of the trade item regardless of where and by whom it is manufactured, is responsible for the allocation of the Global Trade Item Number (GTIN ). 2. A GTIN is only changed if the change is relevant further down the supply chain. 3. Each trade item that is different from another must be allocated a separate, unique GTIN.

39 Example 1 Fixed Measure, Manufacturer Specific Material Process Manufacturer Spec Description Bottle cap, plastic, white etc Box of bottle caps, 1000 Element Strings Used / Symbol Marking of the Items GTIN: , symbol marked: No (used for VMI) GTIN: , symbol marked: Yes Pallet containing 12 boxes GTIN: , symbol marked: Yes Tote of bottle caps, 5000 GTIN: , symbol marked: Yes Order 1 Supplier A, Plant bottle caps to Plant Z (three boxes) GTIN , Quantity=3 Order 2 Supplier A, Plant bottle caps to Plant X (two totes) GTIN: , Quantity-2 Order 3 Supplier B, Plant 3 12,000 bottle caps to Plant Z (one pallet) GTIN: , Quantity = 1 Delivery 1 Delivery 2: Delivery 3: Receipt of Order 1 Receipt of Order 2 Receipt of Order 3 Additional information GTIN: , Quantity=3 GTIN: , Quantity=2 GTIN: , Quantity=1 All pallets/unit loads identified with (00) SSCC Invoice 1 Invoice 2 Invoice 3 Payment of Order 1 Payment of Order 2 Payment of Order 3 GTIN: x 3 Qty x price GTIN: x 2 Qty x price GTIN: x 1 Qty x price

40 Example 2 Fixed Measure, Supplier Specific Material Process Supplier Spec Description Supplier A, 50 kg bag of salt Supplier B, 50 kg bag of salt Element Strings Used / Symbol Marking of the Items GTIN: , symbol marked: Yes GTIN: , symbol marked: Yes Order 1 Order 2 Delivery 1 Delivery 2: Supplier A, 20 bags of salt Supplier B, 34 bags of salt Receipt of Order 1 Receipt of Order 2 Additional information GTIN , Quantity=20 GTIN: , Quantity-34 GTIN: , Quantity=20 GTIN: , Quantity=34 All pallets/unit loads identified with (00) SSCC Invoice 1 Invoice 2 Payment of Order 1 Payment of Order 2 GTIN: x 20 Qty x price New Process: GTIN: x 34 Qty x price

41 Example 3 - Variable Measure, Manufacturer Specific Material Process Manufacturer Spec Order 1 Delivery Description chemical product (in kg) Kg Receipt of Order 1 GTIN: Element Strings Used / Symbol Marking of the Items As Is: Customer Item Number = , quantity = 2000 To Be: GTIN , Weight = 2000 kg As Is: Customer Item Number = , quantity = 2000 To Be: GTIN x 1975 kg Invoice 2000 Kg As Is: Customer Item Number = , invoice amount = quantity (2000) X price per Kg To Be: GTIN , invoice amount = Weight (1975) X price per Kg

42 Example 4 Variable Measure, Supplier Specific Material Process Manufacturer Spec Order 1 Order 2 Delivery Description chemical product (1 Kg) Kg 150 Kg Receipt of Order 1 GTIN: Element Strings Used / Symbol Marking of the Items As Is: Item Number = ABC014567, quantity = 2000 To Be: GTIN , Weight = 2000 As Is: Item Number = ABC014567, quantity = 150 To Be: GTIN , Weight = 150 As Is: Item Number = , quantity = 2000 To Be: GTIN , Weight = 2000 If delivery is made on a pallet Pallet: (00) SSCC Delivery Receipt of Order 2 As Is: Item Number = ABC014567, quantity = 160 To Be: GTIN , Weight = 160 If delivery is made on a pallet Pallet: (00) SSCC Invoice 1 Invoice Kg 150 Kg As Is: Item Number = ABC014567, invoice amount = Weight (2000) X price per Kg To Be: GTIN , invoice amount = Weight (2000) X price per Kg As Is: Item Number = ABC014567, invoice amount = Weight (160) X price per Kg To Be: GTIN , invoice amount = Weight (160) X price per Kg

43 EAN.UCC B2B Standards (XML and EANCOM ) «GS1, a new name, a global vision together»

44 Upstream Supply Chain Current Situation S S S S S Manufacturer S Manufacturer S Manufacturer S Manufacturer S S S S All companies have developed their own solutions to share information with major suppliers (e.g. , extranet access, EDI, etc) Different business process scenarios Different data interchanges Different integration technology These customised solutions have proved to be inefficient and unsuitable to be scaled within companies and across industry

45 Upstream Supply Chain The Future High-level processes Upstream Integration Model Manufacturer Supplier Integration Agreement Agree operational rules & Conf irm Agreement Integration Agreement Agree operational rules & Conf irm Agreement Align Product & Commercial Master Data (incl. operational rules) Purchase Conditions Demand & Supply Signals Despatch, Receipt & Consumption Financial Settlement

46 Upstream Integration Model (UIM) Standardises the business processes and data interchanges between manufacturers and material suppliers for use in electronic communications Covers the following business areas: Master Data Alignment Purchase Conditions Demand & Supply Signals (Material Forecasting) Despatch, Receipt and Consumption (of goods) Financial Settlement (Invoicing) Within an overall (manual) Integration Agreement made between the manufacturer and supplier

47 Building Blocks Manufacturer Process Supplier Process Integration Agreement Data Alignment Agree on business rules Maintain Master Data Integration Agreement Item Master Data Agree on business rules Maintain Master Data Purchasing Conditions Agree Purchasing Conditions Purchase Conditions Agree Purchasing Conditions Report Inventory Inventory Report Inventory Purchase Order Demand & Supply Signals Gather material requirements Net requirements Consumption Forecast Replenishment Forecast (instead of Inv. and R. Forecast) Plan production & supply Integrate information Purchase Order Confirmation Delivery Plan Confirm delivery Dispatch, Receipt & Consumption Await shipment Receipt of goods Check goods Dispatch Notification Physical shipment of goods Receipt Notification Pick & Pack goods Shipment Goods Receipt Notification Consume goods Consumption Report Consumption Notification Invoice receipt Invoice Create invoice Financial Settlement Create Self-billing invoice Invoice confirmation Create Remittance Advice Self-billing invoice Invoice confirmation Remittance Notification Invoice receipt Invoice confirmation Payment Notification Initiate Payment Physical Payment Payment receipt

48 Block 2: Master Data Alignment

49 Block 2: Master Data Alignment XML Schemas Item General Item Specific

50 Block 3: Purchase Conditions

51 Block 3: Purchase Conditions XML Schema Purchase Condition

52 Block 4: Demand & Supply Signals Traditional Order Management (TOM)

53 Block 4: Demand & Supply Signals Traditional Order Management (TOM)

54 Block 4: Demand & Supply Signals Supplier Managed Inventory (SMI)

55 Block 4: Demand & Supply Signals XML Schemas Purchase Order Purchase Order Response Goods Requirements Goods Requirements Response Replenishment Proposal Replenishment Request Inventory Activity or Inventory Status

56 Block 5: Dispatch, Receipt, Consumption TOM & SMI without Consignment

57 Block 5: Dispatch, Receipt, Consumption TOM & SMI with Consignment (SMOI)

58 Block 5: Dispatch, Receipt, Consumption XML Schemas Despatch Advice Receiving Advice Consumption Report

59 Block 6: Financial Settlement Invoicing with Non-Consignment

60 Block 6: Financial Settlement Invoicing with Consignment

61 Block 6: Financial Settlement Self-billing with Non-Consignment

62 Block 6: Financial Settlement Self-billing with Consignment

63 Block 6: Financial Settlement XML Schemas Invoice Invoice Confirmation Remittance Notification

64 EANCOM messages PRICAT, PRODAT, for Item General & Item Specific CNTCND, for Purchase Condition ORDERS, for Purchase Order ORDRSP, for Purchase Order Response SLSFCT, for Goods Requirements, Replenishment INVRPT, for Inventory DELFOR, for Delivery Plan DESADV, for Despatch Advice RECADV, for Receiving Advice SLSRPT, for Consumption Report INVOIC, for Invoice REMADV, for Remittance Notification

65 Conclusions The Upstream Integration Model (UIM) is the foundation for global standards, which are produced by GS1. They are expected to be released in Q Global CPG manufacturers and suppliers are leading implementation of the UIM and EAN.UCC standards under the auspices of GCI. This will impact your business! Therefore, please study the UIM, prepare to adopt EAN.UCC standards, and join the GUSI Work Group.

66 For further information: GS1 Head Office T: +32 (0) F: +32 (0) E: Blue Tower Avenue Louise 326 B-1050 Brussels Belgium

67 Thank you for your attention! Questions?