Conceptual Modelling For Supply Inventory Management Using GS1 Standards, Essay.

Introduction to GS1 Standards

Discuss About The Conceptual Modelling For Supply Inventory.

GS1 is a global system of standards meant to ensure uniformity of products, services, and information in the international marketplace. It facilitates the efficient operations within and between different parties in a supply chain namely; manufacturers, distributors, retailers, transporters and customs organisations. Standards are also used by local and international regulatory authorities involved in different aspects of business and trade. GS1 has 108 member organisations and serves 150 countries worldwide (GS1 Global, 2017a).

Standards are agreements that govern the activities of an industry. They may be in the form of rules guidelines that are applied by industry stakeholders. Standards can also be used to describe, measure, or classify products or services. Standards are essential for simplifying business processes, especially for companies that use a large number of components drawn from different places to manufacture their products. Standards form the basis for agreeable exchanges between companies operating in a globalised marketplace. They help all industry players to cut costs (GS1 Global, 2017a).

GS1 Standards enable easy communication with suppliers, partners, and customers because they represent a common language. Supply chain standards help companies to save time and money by ensuring key processes run smoothly. Businesses have a wide range of regulatory requirements to contend with in relation to export, import, product safety, and transit. Companies are required to provide accurate product information to governments, including tracing product movements along the supply chain, and safety information (GS1 Global, 2017a).

GS1 Australia is the country’s leading provider of standards, serving over 20 different industry sectors. It boasts of over 17,000 member companies that have adopted the GS1 system for more efficient operations. GS1 Australia introduced the barcoding system to Australia in 1979 and has since brought together companies, associations and industries. The Australian business community relies on GS1 for solutions, networking, and advice on their supply chain challenges. GS1 is at the forefront in encouraging best practice in supply chain management (GS1 Australia, 2017).

GS1 Australia is part of a not-for-profit organisation based on membership. It is part of a global network of GS1 organisations spread across over 100 countries. The global headquarters are in Brussels, Belgium. The mandate of GS1 Australia is to provide and manage barcode numbers, provide GS1 system-based supply chain standards and related solutions to members. It is the only organisation authorised to provide GS1 system numbers in Australia (GS1 Australia, 2017).

Benefits of implementing GS1 Standards in supply chain management

Governance of GS1 Australia is in the hands of an independent Board and Council, which is comprised of 15 representatives drawn from different industry and trade organisations, as well as leading manufacturers and retailers. Executives from Australian and international companies sit on the board. Their skills and experiences are valuable in ensuring the organisation meets its objectives. The board members are tasked with handling the organisation’s strategies, operational plans and budgets. They also ensure legal compliance and proper audit of members (GS1 Australia, 2017).

GS1 Australia barcode numbers begin with the prefix 93 and it is the only organisation authorised to provide barcode numbers with this prefix. Companies should beware of the existence of unauthorised barcode sellers. Fake barcode numbers undermine the integrity of the GS1 system, cause disruption of supply chains, and create confusion in the market. Businesses using unauthorised barcode numbers risk suffering losses and losing connections with other partners in the supply chain (GS1 Australia, 2017).

Governments need to receive and verify product information for compliance with set rules. To do this, they need information and documentation for declaration, inspection, and tracking. This enables governments to ensure safety, security, and authenticity of products entering their borders (GS1 Global, 2017b).

Companies need better supply chain management as the global marketplace becomes more complex. Effective supply chain management requires information sharing and the use of IT platforms to improve operations between supply chain partners (Pfahl & Moxham, 2014). GS1 Standards form the basis for information sharing that is accurate and consistent. Supply chain visibility can be achieved through collaboration using GS1 standards.  The use of proprietary supply chain standards helps companies become more competitive and successful (GS1 Global, 2017a).

The use of standards in supply chain management provides a mechanism for coordination of operations for improved efficiency. It forms the basis of clear communication between supply chain partners (Semianiaka & Silina, 2012). Standards make it easier for businesses to exchange information thus facilitating market transactions. Standardisation and regular update of information helps in optimising supply chain processes. GS1 System standards exist in different categories including; product identification, labelling, and communication standards (GS1 Global, 2017a).

The benefits derived from using GS1 Standards are related to the type of industry, company size, and extent of implementation (Semianiaka & Silina, 2012). Companies that are classified as strategic gain more benefits from using GS1 system. They also tend to have greater knowledge of technology and its implications. On the other hand, reactive companies do not realize the benefits of using a standards system. The extent of standards implementation will be determined by potential benefits, options available, and range of applications to be implemented (GS1 Global, 2017b).

• Barcodes
• ECom – standards for electronic business messaging
• GDSN – Data synchronisation
• EPC Global – RFID-based

GS1 Australia and its role in providing supply chain solutions

These represent the most widely recognized and used standards under GS1. The bar code was initially intended to facilitate the automatic recording of items at the checkout. However, it has since grown to become solution for broader business issues (Pfahl & Moxham, 2014). The barcode carries information in a form of business language which is used to monitor day-to-day business processes such as invoices, deliveries, and orders. Almost each type of product is assigned an identifier. Operating on the global stage requires a unique identifier that is readily recognised. Global standards are used for this purpose (GS1 Global, 2017a).

This consists of two major components:

• GS1 Automatic Identification Standards
• GS1 Communication Standards

These consist of data carriers and identification keys. The identification key is in the form of a code while the data carrier is attached to the products’ packaging. The most widely used identification keys under GS1 are GLN, GTIN, and SSCC. Each product identification number consists of two parts – a company prefix assigned by GS1, and a product identifier assigned by the company itself (GS1 Global, 2017a).

This is a standard form of identification for locations and legal entities such as companies, subsidiaries, offices, warehouses, and even specific shelves inside a store. Location can also be a section or division within an organisation, such as the finance department of a company or the orthopaedic wing of a hospital (GS1 Global, 2017a). The address information is automatically processed for senders and receivers. GLN is a 14-digit code. It is crucial for businesses to be able to readily identify locations relevant to their business processes. Using GLN provides significant advantages because it is a standardised way of uniquely identifying locations relevant to the supply chain (GS1 Global, 2017b).

GLN is used in multiple sectors to identify locations at different levels. The use of GLN eliminates the need for other location numbering systems since it has a structure that guarantees its global uniqueness. It contains a GS1 application identifier which allows for encoding of multiple data while member companies get a GS1 company prefix. The location preference assigns a different number to each different location while there is a check digit for extra security (GS1 Global, 2017a).

This is a unique identifier for trade items and is assigned even for different sizes/quantities of the same item. The GTIN code for any item should be accessible at any point in the supply chain and provides information such as sale record, price, order, and delivery. GTIN is a 14-digit code. GTIN allows for unique identification of products at any point in the supply chain, including warehouse, checkout, and electronic catalogue. Each trade item is assigned its own GTIN number separate from another (GS1 Global, 2017a).

GS1 Standards for product identification and trade

The unique GTIN identifier enables users to look up an item in a database and see details such as price, order, sale records from any point in the supply chain. GTINs facilitate efficient, accurate, and quick business operations for millions of companies around the world. There is a special form of GTIN called a Serialised GTIN which is used for specific individual trade items of the same brand and characteristics. For example, in the healthcare sector serialised GTINs are used to identify individual implants of similar characteristics from the same manufacturer. This allows for the items to be tracked though their lifecycle (GS1 Global, 2017a).

This is an 18-digit code used for logistics units such as trucks, pallets, and cartons. A logistic unit represents any combination of units in situations where there is a need to manage a specific unit load in the supply chain. It is used for tracking of orders and deliveries, and also allows for automated receiving of the goods. The code carries information such as manufacturer, batch number, and quantity of products in the container (GS1 Global, 2017a).

Units can be tracked individually using the SSCC enabling companies to track their orders and deliveries until the goods are received. SSCC has a serial reference component that enables simple allocation of numbers with unique identification and an unlimited number of combinations. The unique number can also be used to look up the consignment and provide information details. Furthermore, it can be used to send advanced notices during shipping. Companies using SSCC need not u long codes for consignment information for their logistics units as they can look up details using the SSCC number (GS1 Global, 2017a).

The SSCC provides an electronic communications link for the barcode information in the logistics unit. The GS1 application identifier allows for encoding of multiple data and capacity can be increased using the extension digit. Companies can use their GS1 allocated prefixes to assign SSCCs with each logistical unit receiving a unique number derived from the serial reference. All digits are used to calculate the check digit for extra security. Any member organisation of GS1 across the world can provide a SSCC number (GS1 Global, 2017a).

GSRN – Global Service Relation Number - This is the GS1 identity key for identifying business-client service relationships, for example hospital and patient, retailer and customer, or club and members.

GRAI - Global Returnable Asset Identifier – This is a GS1 identity key used for identifying returnable assets such as pallets, crates, and containers to be used again. Additionally, it can be used for tracking purposes, or by companies sharing a rental storage system to identify their items inside the premises (GS1 Global, 2017a).

GLN: A standard form of identification for locations and legal entities

GIAI - Global Individual Asset Identifier – This is a GS1 identity  key for identifying all kinds of fixed assets, especially those that need unique identification such as vehicles, machinery, and computers. The unique identifier enables the business to identify and track the asset throughout its life. Companies can quickly look up an asset in their database for information such as its location, maintenance schedule, planned upgrade, or use history.

GDTI - Global Document Type Identifier – This is used to identify documents according to type. Documents covered here vary widely and include official and private papers that represent the rights and obligations of individuals or entities. GDTIs are commonly used in shipping forms, invoices, insurance policies, passports, and tax forms. Companies use GDTIs for documents whose records are important and may need to be accessed from the database (GS1 Global, 2017a).

GSIN – Global Shipment Identification Number – This is the number assigned by the seller of the goods being shipped for unique identification of units. It is also called the bill of lading.

GINC – Global Identification Number for Consignment – This is sued for identifying a group of items that are supposed to be transported together through freight or carrier

These are used to complement the GS1 identity keys. They are used in supply chain applications cutting across multiple sectors, where they code for simple and generic data fields. Each GS1 application identifier (GS1 AI) comprises two or more digits which encode for the data field’s format and structure in a GS1 Data Carrier. GS1 ID keys usually enable access to supplementary data about the item inn a database. On the other hand, GS1 AIs are used to access supplementary data that is cannot be accessed from the database using GS1 ID keys. This is usually done when data is needed by there is no connection to a database. It is also used when the information is needed in barcode or EPC/RFID format (Thiesse et al., 2011).

GS1 uses a wide range of data carriers using different media that are able to carry GS1 ID keys and relevant data. The kid of data carrier used depends on the intended use. GS1 data carriers exist in the form of barcodes and RFID tags (Pero & Rossi, 2014). The barcode presents the product’s unique identification number in a graphical format. The symbols represent the type and amount of information to be conveyed. Barcodes are still the most commonly used for product identification because RFID tags are expensive. Data carriers are assigned on different levels including individual items, cartons, and pallets (Butner, 2010).

GTIN: A unique identifier for trade items

At the item level, barcodes are used to mark the shelves for optimal planning, and to automate checkouts. When placed on cartons, barcodes help with optimising store distribution, selecting the right storage zone, and assigning the use of trucks. Similarly, barcodes on the pallets provide information on suitable storage location, optimising order quantities, and tracing orders.

GS1 EAN/UPC barcodes are the most widely-used GS1 data carriers. Items carrying these barcodes can be scanned at any retail point of sale across the globe. The wide application if these barcodes is reflected in almost every product in the world. The information encoded in the EAN/UPC barcode is read using a laser scanning device at the checkout in a supermarket. The barcode can be read using a barcode reader even when the item is upside down or sideways, thus making it a quick and highly efficient data carrier for situations that involve a lot of frequent scanning such as supermarket checkout (GS1 Global, 2017a).

ITF-14 barcodes carry only GTINs and cannot thus be used at points of sale to identify items. They are instead printed directly onto cartons for trade items that require them. On the other hand, GS1-128 barcodes carry all GS1 identity keys and are thus the best data carriers for logistics. They can also carry additional information such as serial numbers, dates, and measurements. However, GS1-128 barcodes cannot be used for scanning items at a retail point of sale. Due to increasing demands for tighter product traceability, GS1-128 barcodes have become more prominent for their robust applicability in transport, logistics, and tracing systems. GS1-128 is flexible and can be easily configured in different ways. It can be adapted for a wide range of uses and can be read suing a variety of laser scanners (GS1 Global, 2017a).

GS1 DataBar symbols have more capacity for carrying information compared to EAN/UPC barcodes. They can be used to identify smaller items and also be scanned at retail points of sale. This enables them to be used for GTIN identification of products that are hard to mark, such as jewellery, and fresh produce such as fruits. Other GS1 application identifiers that can be carried in GS1 DataBar include expiry dates, serial numbers, and lot numbers. Companies are able to trace and authenticate fresh produce in the supply chain.

The brand owner decides whether to us GS1 DataBar symbols or not as they are not obligated to replace the EAN/UPC barcodes. GS1 endorsed and adopted the symbols following a comprehensive review by a global taskforce comprising of manufacturers, retailers, and trade associations (GS1 Global, 2017a). Countries were left to decide when to start using the GS1 DataBar symbols as from 2014, even though there are exemptions for special applications  to be back-dated, for example USA coupons marked 2011 (GS1 Global, 2017b).

SSCC: An 18-digit code used for logistics units

EPC/RFID tags use microchips to encode for electronic product code (EPC) and other relevant data (Pero & Rossi, 2014). The data is reflected by means of electromagnetic waves that are captured by a reader-scanner. The microchips are usually embedded inside the product or packaging. They may also be shielded using adhesive film since the electromagnetic waves can pass though solid materials. EPC/RFID tags can be read rapidly without the reader and item being aligned (Thiesse et al., 2011). This helps in saving time as items can be checked quickly compared to other GS1 data carriers (GS1 Global, 2017a).

EPC/RFID tags also have capacity to capture bulk data (Pero & Rossi, 2014). This means that they can be used to scan a whole supermarket with one beep without the need to manually move the scanner over each item in the shelves. Furthermore, this data carrier is able to provide the exact product location, making it useful in large warehouses where many items are stored (Butner, 2010).

The electronic product code (EPC) is widely used across the world to identify physical items, loads and locations that need to be tracked using radio frequency identification (GS1 Global, 2017b). All GS1 ID keys are carried in the EPC so that they can operate with different systems as well as other naming structures. This enables other non-GS1 naming structures to be incorporated into the EPC system. The result is wide adoption of the EPC system beyond the GS1 Standards. EPC also allows independent organisations to assign new codes without overlap with existing ones due to its decentralised method of assigning codes (GS1 Global, 2017a).

All items with an EPC have a unique serial number for accurate and specific identification of individual objects. There is a corresponding EPC for every GS1 ID key that identifies a unique entity. This makes them compatible with other systems that use GS1 identity keys such as GTIN and SSCC. The EPC is also used to encode information for a GS1 Barcode so that the information can be accessed from the EPC network (GS1 Global, 2017a).

The GDSN provides a robust and secure platform for continuously synchronising data accurately. It provides businesses with the latest information in their systems and is able to automatically update any changes to the company database. Partner businesses are also notified immediately about the changes that are relevant to them. All partners in the supply chain get access to accurate, up-to-date data that enables quicker, smoother, and cheaper business processes. It is a useful way of reducing costs in the supply chain (GS1 Global, 2017a).

The importance of using GS1 Standards for inventory management

The network support for GDSN is provided by the GS1 Global Registry, which also acts as an information directory. This ensures that all registered items and entities remain unique and easily accessible. Members can access critical information from the data pools and synchronise communications in the network. This is done using a standard set of messages, rules, and processes. GDSN-certified data pools receive and store master data in the form of electronic catalogues of standardised items. GS1 members can access this data from any location as long as they have connection. Data pools are managed by member GS1 organisations and solutions providers.

GDSN is supported by data quality programs that have been established through data accumulation over the long term. To ensure data quality, GDSN follows the processes outlined in the GS1 Data Quality Framework. High quality data enables businesses to benefit from robust processes and systems. Suppliers are able to improve their internal processes while retailers and other data users are assured they will receive proper information (Butner, 2010).

GDSN uses the GS1 Global Product Classification (GPC) system which represents a common language for grouping products for buyers and sellers. These are applicable all over the world. This facilitates GDSN’s data accuracy and integrity. It also enables the supply chain to respond quickly to customer needs while also promoting communication across language barriers. GDSN also facilitates reporting across different industries that share similar products. Products under GPC are grouped into categories called ‘bricks’, which enable correct recognition of these products throughout the supply chain (GS1 Global, 2017a).

These are used by supply chain partners to share master, transactional, and event data. Master data refers to product information, prices, and location. The information is stored in GDSN format and can be accessed through barcode scanning. GDSN is accessible to all GS1 members to enable them to continuously synchronize accurate product data. When suppliers and customers have access to updated data, business processes become faster, easier, and cheaper (Zhang et al., 2011).

GS1 eCom communication standards enable companies to exchange transactional information in a smooth way. For example, they provide a direct link between orders and POS data. This helps with quicker customer responses, timely replenishment of stock, higher product availability, and precise inventory management (Pero & Rossi, 2014).

EPCIS (Electronic Product Code Information Services) is used by supply chain partners to monitor shared events data and keep abreast of information status details such as location, time, and disposition. Users are able to follow the events that occur in the course of an item (GS1 Global, 2017a).

• Accuracy in making orders
• Increased accuracy of invoices
• Reduced lead times
• Lower inventory levels
• Improved supplier services
• Improved traceability of products
• Improved availability of stock
• Lower distribution costs

Conclusion

Barcodes have a high compatibility with existing systems because GS1 standards use IT systems that can be linked to many processes (Zhang et al., 2011). Large companies need more supply chain visibility which can only be provided by GS1 standards. In addition to other benefits, GS1 enable businesses to comply with government demands for traceability and accountability in the supply chain (Butner, 2010). GS1 standards also facilitate collaboration with business partners and even competitors in maintaining industry-wide standards.

Well-designed supply chains make business operations more-efficient and less-costly. This requires a system of proper standards so that logistics can run smoothly. Some companies develop and use their own standards that are only applicable within the confines of one industry sector or country (GS1 Global, 2017b). The GS1 system is a much better platform because it is global and applicable to many sectors of the economy. GS1 standards are also robust and can be applied even in unpredictable situations. They are known for accuracy and scalability, as well as highly reliable read rates.

GS1 System of Standards has been endorsed by a wide range of industry sectors, trade associations, and related stakeholder organisations (Caridi et al, 2014). GS1 standards are also being widely adopted in the global healthcare sector and have been adopted by many national Ministries of Health. Some of the prominent organisations that have partnered with GS1 System of Standards include; World Customs Organisation (WCO), United Nations Centre for Trade Facilitation and Electronic Business, and the Consumer Goods Forum (Pfahl & Moxham, 2014).

GS1 technology is used to eliminate bullwhip effect by enhancing collaboration between suppliers, customers, and other members of the supply chain. GS1 Standards facilitate sharing of accurate, up-to-date information about different product details including descriptions, orders, sales, inventory, shipping, and other transactions. Information is updated in real-time and all members of the supply chain are informed immediately. GS1 systems can be connected to supply portals and EDI transactions for better collaboration (Caridi et al, 2014).

GS1 systems help in improving forecast accuracy so that companies in the supply chain can plan well and meet customer demands. Inaccurate forecasts lead to bullwhip effect in the supply chain. Quick access to quality information and availability of insight enables supply chain members to make quick and accurate decisions regarding business processes. They are also able to reduce costs associated with supply chain management, for example those arising from slow deliveries, excess inventory, and missing orders. With GS1, business can manage their supply chains based on demand.

Conclusions

Implementation of GS1 Standards is necessary for businesses operating within complex supply chains. Such situations involve the distribution of products from one place to many locations in different places. The use of industry-wide standards makes it easier for retailers to receive the right consignment of goods based on the ability for conformation using barcodes that can be scanned and interpreted by the retailer. Barcodes typically require a low degree of technology to implement and are widely used by many suppliers today.

GS1 Standards provide structure and basic guidelines that facilitate operations between companies and industries. Initially created to streamline distribution of food and consumer goods between manufacturers and retailers, GS1 standards are today used by over a million companies in different economic sectors including manufacturing, chemical, healthcare, transportation, and retail. GS1 standards provide a flexible platform that enables companies to attain maximum efficiency. All the elements of the system are compatible with each other. This allows for them to be deployed in a manner that addresses specific customer needs, while remaining changeable for future additions.

References

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