Get the most out of communication standards upstream: EDI messages and bar codes have been great enablers for speeding up and improving the quality of supply chain processes between retailers and manufacturers. Now it is time to use them upstream. Learn how to apply these techniques with suppliers of raw materials and packaging. Speakers: Nicola Comiotto, Nestlé, Regenald Kramer, GS1, Miodrag Mitic, GS1, Sarina Pielaat, GS1 Netherlands Facilitated by GS1 (formerly EAN International)

1. Get The Most Out of
Communication Standards
Upstream!
10th 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
©2004 GS1

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
©2004 GS1

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
©2004 GS1

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
©2004 GS1

6. GS1 WORLD MAP
GS1 Member Organisations
Membership allocated on a direct
104 MOs representing company basis by GS1
1,000,000+ member companies
in 155 countries ©2004 GS1

7. BASIC OVERVIEW OF THE
EAN.UCC SYSTEM
©2004 GS1

8. ©2004 GS1

9. ©2004 GS1

10. GS1 standards
drive consumer
demand data
availability!
©2004 GS1

11. Efficient
replenishment
relies on GS1
standards!
©2004 GS1

12. GS1 standards
drive the WMS
where demand
and supply
chains meet!
©2004 GS1

13. Inventory
planning and
supply chain
visibility rely
on GS1
standards!
©2004 GS1

14. GS1 standards
enable the
entire order to
cash cycle!
©2004 GS1

15. Adoption of
GS1 standards
drives down
complexity and
cost !
©2004 GS1

16. ECR Europe Integrated Suppliers
pilot results in 1999-2000
• 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%
©2004 GS1

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. email, 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
©2004 GS1

19. Upstream Supply Chain - the
scaling barrier
Business
Benefits
Global
S Benefits across
C the industry
A
e
L e th
s ar
E dard
stan break er
w ide to rri
dustry ndation ling ba
In fou he sca
Current 1:1 gh t
t hrou
programs
(varying from
pilots to
integration with Cost
many suppliers)
B No sharing of experience
A
Un coordinated actions
R
R No widely adopted standards ..divergence
I
Suppliers faced with different Approaches
E
R Complexity & Uncertainty
Time
©2004 GS1

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 2004. 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.
©2004 GS1

21. Evolution of GUSI
2003 2004
Group of manufacturers (Unilever, Nestlé, The original group expands to include new
Henkel and Danone) explores upstream manufacturers and suppliers (P&G, Crown,
supply chain areas for improvements Firmenich, Kappa Packaging, Novozymes, SCA,
Van Genechten Packaging)
Confirm that there is a strong potential for a No eMarketplaces or service providers
common set of approaches and standards involved
upstream
Continue neutral facilitation
Create an Upstream Integration Model (UIM) of
processes, definitions and message needs Create UIM V2 and submit it to Global Standard
Management Process to develop standard
Positive support from EAN.UCC messages based on business requirements
UIM V 1 is presented to experienced eSupply GUSI approaches GCI to gain approval as an
Chain suppliers: official global initiative
Positive reaction from suppliers in
support of the initiative
Positive response from GCI
GUSI becomes part of GCI and a new
organizational structure is agreed
©2004 GS1

22. Evolution of UIM V 1
01/03 02/03 06/03 07/04 08/03 10/03 11/03
 Explore phase  Initiative  Initiative  High level
presentation presentation Change
to selected to new Request
suppliers manufacturers submitted to
GSMP
 Initial group  EAN.UCC  UIM V1 finalised  New Group
set up and involvement and set up
explore project approach (Manufacturer
phase agreed s & Suppliers)
started
©2004 GS1

23. Evolution of UIM V 2
02/04 06/04 07/04 08/04 09/04
 Validation  Industry  Standard
process Requirement messages
Team (IRT) development
set up process
started
 Extended  UIM V2 finalised  Change Request
group set submitted to IRT
up and UIM
V1
reviewing
phase
started
©2004 GS1

24. Future Scenario - Upstream
Integration Model
Business Messages
• Manufacturer- Processes • Set of standard
Supplier Integration messages
solution which can supporting
accommodate business process
different business scenarios
process scenarios
• The move to more real
time exchange of data
• Upstream SMI and instead of the batch
Order Management oriented exchanges of
the past
are the two most
common business • The focus on
process scenarios UIM exceptions rather than
sending and
used in the CPG confirming whole
batches of data, e.g.
industry 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
©2004 GS1

25. Process steps
High-level processes – "To Be" model
Manufactur
er Integration
Agreement
Agree operational
rules & Conf irm Align Product
Agreement
&
Commercial Demand & Despatch,
Purchase Financial
Master Data Supply Receipt &
Conditions Settlement
(incl. Signals Consumption
operational
Integration rules)
Agreement
Agree operational
rules & Conf irm
Agreement
Supplie
r
©2004 GS1

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
©2004 GS1

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 pre-
defined information and that may be priced or ordered
or invoiced at any point in any supply chain.
©2004 GS1

29. Global Trade Item Number
©2004 GS1

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
©2004 GS1

31. Serial Shipping Container Code
(SSCC)
©2004 GS1

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
©2004 GS1

33. Global Location Number - GLN
©2004 GS1

34. Company Prefix
• Worldwide unique
• Gives access to all the applications using EAN.UCC
System identification standards
©2004 GS1

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)
©2004 GS1

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.
©2004 GS1

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.
©2004 GS1

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.
©2004 GS1

39. Example 1 – Fixed Measure,
Manufacturer Specific Material
Process Description Element Strings Used / Symbol Marking of the Items
Manufacturer Spec Bottle cap, plastic, white etc GTIN: 029000111110, symbol marked: No (used for VMI)
Box of bottle caps, 1000 GTIN: 10029000111117, symbol marked: Yes
Pallet containing 12 boxes GTIN: 50029000111115, symbol marked: Yes
Tote of bottle caps, 5000 GTIN: 20029000111114, symbol marked: Yes
Order 1 Supplier A, Plant 1 – 3000 bottle GTIN 100290001111117, Quantity=3
caps to Plant Z (three boxes)
Order 2 Supplier A, Plant 2 – 10000 bottle GTIN: 20029000111114, Quantity-2
caps to Plant X (two totes)
Order 3 Supplier B, Plant 3 – 12,000 bottle GTIN: 50029000111115, Quantity = 1
caps to Plant Z (one pallet)
Delivery 1 Receipt of Order 1 GTIN: 10029000111117, Quantity=3
Delivery 2: Receipt of Order 2 GTIN: 20029000111114, Quantity=2
Delivery 3: Receipt of Order 3 GTIN: 50029000111115, Quantity=1
Additional information All pallets/unit loads identified with (00) SSCC
Invoice 1 Payment of Order 1 GTIN: 10029000111117 x 3 Qty x price
Invoice 2 Payment of Order 2 GTIN: 20029000111114 x 2 Qty x price
Invoice 3 Payment of Order 3 GTIN: 50029000111115 x 1 Qty x price
©2004 GS1

40. Example 2 – Fixed Measure, Supplier
Specific Material
Process Description Element Strings Used / Symbol Marking of the Items
Supplier Spec Supplier A, 50 kg bag of salt GTIN: 3011111444444, symbol marked: Yes
Supplier B, 50 kg bag of salt GTIN: 022222777775, symbol marked: Yes
Order 1 Supplier A, 20 bags of salt GTIN 3011111444444, Quantity=20
Order 2 Supplier B, 34 bags of salt GTIN: 022222777775, Quantity-34
Delivery 1 Receipt of Order 1 GTIN: 3011111444444, Quantity=20
Delivery 2: Receipt of Order 2 GTIN: 022222777775, Quantity=34
Additional information All pallets/unit loads identified with (00) SSCC
Invoice 1 Payment of Order 1 GTIN: 3011111444444 x 20 Qty x price
Invoice 2 Payment of Order 2 New Process: GTIN: 022222777775 x 34 Qty x price
©2004 GS1

41. Example 3 - Variable Measure,
Manufacturer Specific Material
Process Description Element Strings Used / Symbol Marking of the Items
Manufacturer Spec chemical product (in kg) GTIN: 97612345000063
Order 1 2 000 Kg As Is: Customer Item Number = 999888111, quantity = 2000
To Be: GTIN 97612345000063, Weight = 2000 kg
Delivery Receipt of Order 1 As Is: Customer Item Number = 999888111, quantity = 2000
To Be: GTIN 97612345000063 x 1975 kg
Invoice 2000 Kg As Is: Customer Item Number = 999888111, invoice amount = quantity (2000) X price per
Kg
To Be: GTIN 97612345000063, invoice amount = Weight (1975) X price per Kg
©2004 GS1

42. Example 4 – Variable Measure, Supplier
Specific Material
Process Description Element Strings Used / Symbol Marking of the Items
Manufacturer Spec chemical product (1 Kg) GTIN: 97612345000049
Order 1 2 000 Kg As Is: Item Number = ABC014567, quantity = 2000
To Be: GTIN 97612345000049, Weight = 2000
Order 2 150 Kg As Is: Item Number = ABC014567, quantity = 150
To Be: GTIN 97612345000049, Weight = 150
Delivery Receipt of Order 1 As Is: Item Number = 999888111, quantity = 2000
To Be: GTIN 97612345000049, 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 97612345000049, Weight = 160
If delivery is made on a pallet Pallet: (00) SSCC
Invoice 1 2000 Kg As Is: Item Number = ABC014567, invoice amount = Weight (2000) X price per Kg
To Be: GTIN 97612345000049, invoice amount = Weight (2000) X price per Kg
Invoice 2 150 Kg As Is: Item Number = ABC014567, invoice amount = Weight (160) X price per Kg
To Be: GTIN 97612345000049, invoice amount = Weight (160) X price per Kg
©2004 GS1

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. email, 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
©2004 GS1

45. Upstream Supply Chain – The Future
High-level processes – Upstream Integration Model
Integration
Agreement
Manufacturer Agree operational
rules & Conf irm
Agreement Align Product
& Demand & Despatch,
Commercial Purchase Financial
Supply Receipt &
Master Data Conditions Settlement
Signals Consumption
(incl. operational
rules)
Integration
Agreement
Agree operational
Supplier rules & Conf irm
Agreement
©2004 GS1

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
©2004 GS1

47. Building Blocks Manufacturer Process Supplier Process
Integration Agree on business rules Integration Agreement Agree on business rules
Agreement
Data
Maintain Master Data Item Master Data Maintain Master Data
Alignment
Purchasing
Agree Purchasing Conditions Purchase Conditions Agree Purchasing Conditions
Conditions
Report Inventory Inventory Report Inventory
Purchase Order
Net requirements
Demand & Gather material requirements Plan production & supply
Consumption Forecast
Supply Signals
Replenishment Forecast
(instead of Inv. and R. Forecast)
Purchase Order Confirmation
Integrate information Confirm delivery
Delivery Plan
Await shipment Dispatch Notification Pick & Pack goods
Dispatch, Physical shipment of goods
Receipt of goods Shipment
Receipt &
Check goods Receipt Notification Goods Receipt Notification
Consumption
Consume goods Consumption Report Consumption Notification
Invoice receipt Invoice Create invoice
Create Self-billing invoice Self-billing invoice Invoice receipt
Financial Invoice confirmation Invoice confirmation Invoice confirmation
Settlement
Create Remittance Advice Remittance Notification Payment Notification
Initiate Payment Physical Payment Payment receipt ©2004 GS1

48. Block 2: Master Data Alignment
©2004 GS1

49. Block 2: Master Data Alignment
XML Schemas
• Item General
• Item Specific
©2004 GS1

50. Block 3: Purchase Conditions
©2004 GS1

51. Block 3: Purchase Conditions
XML Schema
• Purchase Condition
©2004 GS1

52. Block 4: Demand & Supply Signals
Traditional Order Management (TOM)
©2004 GS1

53. Block 4: Demand & Supply Signals
Traditional Order Management (TOM)
©2004 GS1

54. Block 4: Demand & Supply Signals
Supplier Managed Inventory (SMI)
©2004 GS1

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
©2004 GS1

56. Block 5: Dispatch, Receipt, Consumption
TOM & SMI without Consignment
©2004 GS1

57. Block 5: Dispatch, Receipt, Consumption
TOM & SMI with Consignment (SMOI)
©2004 GS1

58. Block 5: Dispatch, Receipt, Consumption
XML Schemas
• Despatch Advice
• Receiving Advice
• Consumption Report
©2004 GS1

59. Block 6: Financial Settlement
Invoicing with Non-Consignment
©2004 GS1

60. Block 6: Financial Settlement
Invoicing with Consignment
©2004 GS1

61. Block 6: Financial Settlement
Self-billing with Non-Consignment
©2004 GS1

62. Block 6: Financial Settlement
Self-billing with Consignment
©2004 GS1

63. Block 6: Financial Settlement
XML Schemas
• Invoice
• Invoice Confirmation
• Remittance Notification
©2004 GS1

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
©2004 GS1

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 Q1 2006.
• 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.
©2004 GS1

66. For further information:
GS1 Blue Tower
Head Office Avenue Louise 326
T: +32 (0)2 788 78 00 B-1050 Brussels
F: +32 (0)2 788 78 99 Belgium
E: info@gs1.org www.gs1.org
©2004 GS1

67. Thank you for your
attention!
Questions?
©2004 GS1