GDSN (Release 2.X) Trade Item Implementation Guide

GDSN (Release 2.X) Trade Item Implementation Guide Section 12: Broker Distributor Model 12. Broker Distributor Model In a simple supplier model, the supplier is responsible for the flow of information and goods through the supply chain. In the Broker/Distributor model, the supplier has made a strategic decision to differentiate the flow of information and goods between several companies to the Retailer. As a result, we will explore how Data Synchronisation can be leveraged to enhance the Broker/Distributor model in a complex supply chain. 12.1. Pre-Requisite The Information provider and data recipient must be a member of GS1 All parties must have a GLN assigned to their organization to participate in the Global Data Synchronisation Network (GDSN) All parties (information providers and data recipients) agree to exchange data in GDSN through the use of a certified Data Pool 12.2. When Would I Use This? This model is to serve as an example of how data synchronisation has been established in actual business relationships between Manufacturers, their Brokers, Distributors, Retailers, and Wholesalers. The information in this section should not be interpreted as a standard or requirement, but should be used to determine how your company may leverage data synchronisation to fit your relationship with your Trading Partners whether you are a Manufacturer, Broker, Distributor or Wholesaler. 12.3. How to Use These Guidelines There is not one right way to describe how item synchronisation fits into the Broker/Distributor model. As a result, the best way to exemplify this model is to describe the 3 basic scenarios companies are following when implementing item synchronisation. Each scenario will be briefly described with information pertaining to the Brand Owner and/or Manufacturer, the Distributor, the Broker, and the Wholesaler if applicable. Several business examples will be provided for each scenario followed by the overall item synchronization model. The 3 basic scenarios included in this section are: Brand Owner takes sole responsibility for synchronisation (section 12.4) Brand Owner delegates synchronisation responsibility (section 12.5) A shared synchronisation responsibility between Brand Owner, Distributors, and Wholesalers (section 12.6) Note: A Broker serves as a sales agent for the Brand Owner, Manufacturer, and/or Wholesaler. As a result, the data synchronization model for brokers fits into all three of the scenarios mentioned above. Note: For a detailed technical definition of the acronyms and an understanding of the process flow depicted within this diagram, refer to the Catalogue Item Sync Business Message Standard May-2008 All contents copyright GS1 Page 1 of 13

(BMS) which is located in the GS1 Knowledge Centre at: http://www.gs1.org/gsmp/kc/ecom/xml/xml_v_2_7 12.4. Brand Owner Retains Sole Synchronisation Responsibility This scenario is typically selected by Brand Owners using a network of distributors that may or may not manufacture but delivers products to the retailer. Key characteristics of the scenario are: There is no implication for the Data Synchronisation process based on the legal relationship between the Brand owner, a manufacturer and the distributor The Brand Owner determines the product specifications The Brand Owner serves as the single data source for product information (global, local and relationship dependent) and synchronises the information with the Retailer (Data Recipient) The scenario is described in the following business examples. 12.4.1. Contracted Distributor The most basic examples of the Brand Owner retaining sole synchronisation responsibility is that of a contracted Distributor. In this Business example (Figure 12-1), the Brand Owner contracts the Distributor(s) to deliver the product to the Retailer on their behalf. The Brand Owner invoices the Retailer and the Distributor(s) is responsible for delivering the product to the Retailer. In this example, only the Brand Owner will be required to synchronise the item data with the Retailer. The Distributor does not need to be involved in the Item Synchronisation. See Figure 12-4 to reference the data synchronization model for this example. Note: This example remains the same if the Brand Owner either manufactures or contracts manufacturing of the product. Figure 12-1 Brand Owner Contacts the Distributor(s) 1. The Brand Owner manufacturers the product and hires the distributor(s) who will 2. deliver the product 3. The invoice is sent by the Brand Owner directly to the Retailer and 4. payment is sent by the Retailer directly to the Brand Owner. The Distributer(s) does not have any relationship with the Retailer. 12.4.2. Multi-National/Multi-Distributor Network In this Multi-National/Multi-Distributor example (Figure 12-2), the Brand Owner does not manufacture nor distribute the product. The product specifications are communicated through GDSN and non- GDSN channels (1) from the Brand Owner to the Manufacturer/Distributor(s). Once produced, the products are delivered (2) to the Retailer by the Manufacturer/Distributor(s). The invoice is sent by the Manufacturer/Distributor(s) to the Retailer (3) and payment is sent by the Retailer (4) directly to the May-2008 All contents copyright GS1 Page 2 of 13

Manufacturer/Distributor(s). The Brand Owner is the sole source of the item synchronization message. The Brand Owner item synchronization scenario may be referenced in Figure 12-4. Figure 12-2 Brand Owner communicates product specifications through GDSN and non-gdsn channel. The Suppliers then manufacture and distribute the products to the Retailer. May-2008 All contents copyright GS1 Page 3 of 13

12.4.3. Broker Business Example There are many roles a Broker plays in business relationships with Manufacturers, Wholesalers and Retailers. In order to focus on Item Synchronization, this document concentrates on the two most common Broker relationships: Supplier contracted product sales and Retailer contracted business intelligence. The Broker has a formal business relationship with the Supplier, not the Retailer even though there will be interaction between the Retailer and Broker. The Supplier begins by (1) presenting a new item to both the Broker and Retailer. Once accepted by the Retailer, The Broker (2) will sell the product into the Retailer. The Broker will communicate any changes to the Retailer that may occur during the life cycle of the product; however, (3) all product and payment exchanges will still flow directly between the supplier and Retailer. In this example, the Brand Owner has chosen to synchronize its item data directly with the Retailer. An example of this item synchronization scenario may be reference in Figure 12-4. In some instances, the Brand Owner may also choose to synchronize its data with the Broker. This item synchronization scenario may be referenced in Figure 12-5. Figure 12-3 Supplier Contacts Broker 1. Supplier introduces product to both the Broker and Retailer. 2. Broker sells products into the Retailer. 3. Flow of Products and payments still occurs between the Supplier and Retailer. May-2008 All contents copyright GS1 Page 4 of 13

12.4.4. Item Synchronisation Scenario The business examples described all share the same Item synchronisation scenario where the Brand Owner synchronises with the Retailer. Figure 12-4 Brand Owner Synchronises Item One unique variation can be found with the Broker model. The Brand Owner may also choose to synchronise with the Broker to ensure a fully synchronised supply chain. Figure 12-5 Item Synchronization sent to the Broker May-2008 All contents copyright GS1 Page 5 of 13

12.5. Brand Owner Delegates Synchronisation Responsibility In some situations, the Brand Owner chooses not to participate in the synchronisation of item data that is supplied to its Retailers by a network of distributors. Key characteristics of the scenario are: The Brand Owner does not synchronise directly with the Retailer, although some brand owners may be synchronising with their distributors The Brand Owner determines the product specifications, but may not manufacture the product The Brand Owner typically does not distribute the product to the Retailer Multiple distributors can serve as a data source for the same product information and synchronise the information with the Retailer (Data Recipient). The data that is synchronised is neutral and may include relationship dependent data. This scenario can be exemplified through the following business examples: 12.5.1. Wholesale Business Example In a standard wholesale model, the Wholesaler purchases products from the manufacturer and then sells the product to the Retailer. In this specific example, the Retailer will expect item synchronisation with the Wholesaler and not the Manufacturer. The Brand Owner may also synchronise with the Wholesaler. For the Item Synchronisation model please reference Figure 12-9. Figure 12-6 Wholesale Business Example 1. The Brand Owner produces the product and sells to the Wholesaler. 2. The Wholesaler then pays the Brand Owner for the products. 3. The Wholesaler sells and distributes the product to the Retailer. 4. The Retailer pays the Wholesaler for the products. May-2008 All contents copyright GS1 Page 6 of 13

12.5.2. Multi-National/Multi-Distributor Network A multi-national Brand Owner may decide to delegate item synchronisation to its network of distributors to ensure the proper communication of attributes unique to each distributor. This delegation will require the Brand Owner to communicate common attributes to each of the distributors in its network through GDSN or non-gdsn channels to guarantee the consistency of the GTIN coming from each distributor. In this example, the Brand Owner does not manufacture nor distribute the product. The product specifications are communicated through GDSN or non-gdsn channels from the Brand Owner to the Manufacturer/Distributor. Figure 12-7 Brand Owner communicates product specifications through GDSN or non-gdsn channel. The Suppliers then manufacture and distribute the products to the Retailer. 1. The Brand Owner communicates common attributes to the Manufacturer / Distributors. 2. The Manufacturer / Distributors produce and deliver products to the Retailer. 3. An invoice is sent by the Manufacturer / Distributors to the Retailer. 4. The Retailer sends payment directly to the Manufacturer / Distributors. May-2008 All contents copyright GS1 Page 7 of 13

12.5.3. Private Label / Control Brand In this business model, a Retailer may chose to select multiple manufacturers to produce the same product with the exact same specifications. In this situation the Brand Owner is the Retailer. Each manufacturer of the product will be required to synchronize the product through the GDSN. For the Item Synchronisation model please reference Figure 12-9 Important: Retailers must be able to accept synchronised data from multiple manufacturers referencing the same GTIN. Figure 12-8 Multi-Source Business Example 1. The Manufacturer / Distributors produce and deliver products. 2. An invoice is sent by each Manufacturer / Distributor to the Retailer. 3. Payment is sent directly to each Manufacturer / Distributor from the Retailer. May-2008 All contents copyright GS1 Page 8 of 13

12.5.4. Item Synchronisation Scenario The three business examples listed above reference the same item synchronisation model where multiple Manufacturers/Distributors can synchronise the same GTIN to the same Retailer. Figure 12-9 Note: This diagram is not intended to imply that each of the suppliers must belong to the same data pool. 12.6. Shared Synchronisation Responsibilities It is not uncommon for a Brand Owner that sells products to a Retailer through a network of distributors to also sell the same products themselves directly to Retailers. In this situation, the Brand Owner may decide to share synchronisation responsibilities with the distributors. Key characteristics of this scenario are: The Brand Owner uses a network of distributors that manufactures and delivers products to the retailer The brand owner is a different legal entity than the Manufacturer/Distributor entity Both the Brand Owner and Distributor play a role in the Global Data Synchronisation process The Brand Owner is not required to establish data sync prior to the distributor synchronising Multiple distributors can serve as a data source for the same product information and synchronise the information with the Retailer (Data Recipient) The data that is synchronised is neutral and may include relationship dependent data This scenario can be exemplified through the following business examples: May-2008 All contents copyright GS1 Page 9 of 13

12.6.1. Sell to Distributor A Brand Owner may choose to sell its products to the Distributor. In this situation, the Brand Owner s responsibility is to synchronise the product with the Distributor who will then be responsible for synchronising with the Retailer. In this situation, the Brand Owner does not have a direct relationship with the Retailer. As a result, it is the responsibility of the Distributor to synchronise with the Retailer. For the Item Synchronisation model please reference Figure 12-12. Figure 12-10 Brand Owner Sells to Distributor 1. The Brand Owner manufacturers the Product and sells to the Distributor. 2. The Distributor sends payment to the Brand Owner. 3. The Distributor then sells the product to the Retailer. 4. The Retailer sends payment to the Distributor. 5. The Brand Owner also sells directly to the Retailer. 6. The Retailer sends payment directly to the Brand Owner. May-2008 All contents copyright GS1 Page 10 of 13

12.6.2. Wholesale Business Example In this scenario the Brand Owner/Manufacturer is selling to a Wholesaler and a Retailer. Although it is common for the Brand Owner to delegate synchronisation responsibility to the Wholesaler, it is also possible for the Brand Owner to share synchronisation responsibility with its distributors. This is the situation found in a complex supply chain where the Brand Owner supplies the same product to the Retailer as well as the Wholesaler. For the Item Synchronisation model please reference Figure 12-12. Figure 12-11 Wholesale Business Example 1. The Brand Owner produces the Product and sells to the Wholesaler. 2. The Wholesaler sends payment to the Brand Owner. 3. The Wholesaler sells and distributes the product to the Retailer. 4. The Retailer sends payment to the Wholesaler. 5. The Brand Owner also sells directly to the Retailer. 6. The Retailer sends payment directly to the Brand Owner. May-2008 All contents copyright GS1 Page 11 of 13

12.6.3. Multi-National / Multi-Distributor Networks In the situation where a Multi-National / Multi-Distributor Network uses a shared synchronisation model, the business example is the same if the Brand Owner delegates the item synchronisation to its distributor network. The Business Model remains the same (Figure 12-7), but the Brand Owner will now synchronise their Items in addition to the Distributors. In this example, the Brand Owner does not manufacture nor distribute the product. The product specifications are communicated through GDSN or non-gdsn channels from the Brand Owner to the Manufacturer/Distributor. Figure 12-12 Manufacturer/Distributor 1. The Brand Owner communicates common attributes to the Manufacturer/Distributors. 2. The Manufacturer/Distributors produce and deliver products to the retailer. 3. An Invoice is sent by the Manufacturer/Distributors to the Retailer. 4. The Retailer sends payment directly to the Manufacturer/Distributors. May-2008 All contents copyright GS1 Page 12 of 13

12.6.4. Item Synchronisation Scenario As indicated by the business examples described in this section, the Brand Owners will synchronise its Items with the Retailer (Figure 12-13) as well as the Wholesalers and/or Distributors (Figure 12-14). Figure 12-13 Figure 12-14 May-2008 All contents copyright GS1 Page 13 of 13