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The GS1 Ireland Magazine | Autumn 2009

Using Standards todrive efficiencyand reduce costsin recessionarytimes

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GS1 Ireland,The Nutley Building, Merrion Road, Dublin 4Tel: (01) 208 0660 Fax (01) 208 0670Email: info@gs1ie.org

www.gs1ie.org

Despite the recession, this year has seen a considerableinterest in the deployment of GS1 Standards. Thechallenge for every organisation, both in the private andpublic sector, is to reduce costs and improve efficiency.There is wider acceptance that supply chain solutions,such as EDI and scanning, need to be based on openand global Standards if they are to deliver the best valuein terms of payback and ROI.

eGovernmentFor some time now, we have been making the case forthe adoption of GS1 based solutions in the public sector.Ironically, whereas Ireland at one stage ranked high in terms of eGovernmentinitiatives, sadly, in recent years we have fallen badly behind. Recent discussionshave indicated a willingness to move towards paperless trading across the publicsector. Fortunately, we have the experience of other member states such asDenmark where GS1 has assisted the Government in implementing eInvoicingwhich is already showing annual savings in excess of €120 million. It is reasonableto assume that for Ireland inc, there is a similar level of savings to be made and, inaddition, there is the environmental saving which is reckoned to be in the order of1,260 tonnes of CO2 p.a.Speaking of the environment, GS1 is engaged with the EU Commission on projectswhich are designed to enable the timely collection and sharing of environmentaldata from all member states. The SEIS project is featured on pages 4-6 and again itshows how GS1 Standards have much wider application than just for the FMCG andother sectors.

EDITwo leading retailers, Musgrave and Tesco, are implementing the wider suite of GS1messages, covering order through to invoice and, in turn, linking to back doorscanning of pallets/cases to eliminate paper delivery notes, etc. By implementingelectronic delivery notification solutions, the efficiency and effectiveness of supplychain operations is greatly improved and will lead to savings for consumers, whichis good news all around.

Meat TraceabilityThe pork dioxin recall in late 2008 highlighted the need for improving the currenttraceability systems in the meat sector. GS1 has been engaged with allstakeholders with a view to supporting the implementation of an industry-wideapproach. As we know from experience, when complete supply chain solutionsincluding eMessaging and scanning by all parties are deployed, substantial savingsand benefits are realised. In addition, traceability becomes a by-product due toenhanced visibility across the entire chain, thereby enabling targeted recalls to bemanaged easily.

HealthcareHealthcare continues to be a key development sector for GS1 as tremendous strideshave taken place in terms of sector specific standards. As part of our overall globaltraceability initiative, we now have a global healthcare traceability standard. GS1Ireland, on behalf of GS1, has opened a dialogue with ISQua, the InternationalSociety for Quality in Health Care. The photo on page 3 shows board members ofISQua and GS1 Ireland at a recent meeting held in Dublin to discuss areas forcollaboration. ISQua’s annual conference is taking place in Dublin from the 11th to14th October and there is an incredible line-up of speakers and topics, including anumber of ICT tracks. GS1 Ireland welcomes the recent HIQA report on the uniquehealth identifier which we made submissions on. The availability of a UHI, both forpatients and providers, is a vital first step towards the introduction of an ElectronicHealth record (EHR). It is interesting to note that both President Obama and the EUCommission have called for an interoperable EHR by 2015. GS1 Standards foridentification and the EPC Network have the potential to support such keyinitiatives. The EHR will ensure safer treatment and also greater efficiency which willhelp governments to control their rising healthcare budgets.

Jim BrackenChief Executive Officer

Editor/AdvertisingManagerRoss Carew 087 223 5867

ContributorsJim BrackenRoss CarewBarry SpellmanAdreena CullenBrendan Kernan

CirculationManagerAdreena Cullen(01) 208 0671

DesignerMila Print & Design087 927 2973

CEO’s Comment 2

GS1 News 3

eGovernment 4-7eEnvironment – SharedEnvironmental Information System (SEIS) 4-6

eProcurement – GLN adoption by the Danish public sector 7

The Bar Code is 35 years young 8

GS1 eCom 9-11The Benefits of EDI: a practical perspective from an industry point of view 10-11

Meat Traceability 12-13

Global Upstream Supply Initiative(GUSI) 14-15

Autumn Training Courses 16

New Members 17

IKEA Case Study 18-19

Index CEO’s Comment

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Bob Semple and Marco Pattori were recently appointed to the Supervisory Board.

GS1 News

Bob SemplePartner, PricewaterhouseCoopers

Bob Semple is a partner inPricewaterhouseCoopers. He has over 31years professional experience providing arange of advisory and assurance servicesto clients. Over the years Bob hasspecialised in auditing, IT security,forensic investigation and, more recently,corporate governance and riskmanagement. His clients include majorgovernment departments, major publiclyquoted companies, state companies andprivate companies across manyindustries.

He is a member of thePricewaterhouseCoopers Committee ofthe Board, a director of the CorporateGovernance Association of Ireland, aFellow of the Institute of CharteredAccountants in Ireland and also of theIrish Computer Society. Bob has lecturedwidely on risk, control and security issuesand is the author of several reports andbooks on these subjects.

He is married with three children. He is akeen cyclist and recently ran his firstmarathon. He also enjoys amateur radioand woodturning.

Marco PattoriIreland Country Manager, Procter & Gamble

Bob Semple is a partner in Marco Pattoriwas born in Piacenza in Northern Italy andgot his first sales experience as a teenagerin the family laundry and beautywholesaler business. After graduatingwith a business degree from BocconiUniversity in Milan and completing hismandatory military service Marco joinedP&G in 1991, starting in the salesdepartment in Milan.

Since then he has worked in variousexternal selling and internal trademarketing roles for P&G before moving toGeneva in 2005 as EMEA Trade MarketingAssociate Director for the pet caredivision. In 2007 he moved back to Romeas Trade Marketing Corporate Director forItaly which included responsibility for thecommercial integration of the newlyacquired Gillette Company.

In December 2008 Marco was appointedas Ireland Country Manager. He ismarried to Livia and they have one son,Antonio, aged eight. He describes himselfas a Vespa lover.

Attendees at the GS1/ISQua meeting - Standing (L-R): John Hayes, IT Director, Blackrock Clinic; Rory Connaughton, Managing Director, Holfeld Graphics Ltd; TrionaFortune, Director of Programmes, ISQua Head Office; Eric Schneider,Board Member, ISQua; Marisa Jimenez, EPCglobal Inc. Public Policy Director Europe; John Helfrick,Board Member, ISQua; David Skerritt, Board Member, GS1 Ireland; Michael Kelly, Chairman of HEA; Liam Hartnett, Chief Executive, Healthcare Express.Seated (L-R): Roisin Boland, CEO, ISQua; Philip Hassen, Vice-President, ISQua; Bruce Barraclough, President, ISQua; Jim Bracken, CEO, GS1 Ireland; Johnnie Philips, Head ofBusiness Technology, United Drug Plc.

eEnvironment - Shared EnvironmentalInformation System (SEIS) An opportunity for the use of GS1 Standards deployment in support of theEnvironmentTackling today's environmental challenges such as adaptingto climate change, managing ecosystems and naturalresources in a sustainable manner, protecting biodiversity,preventing and managing environmental crises such asfloods, forest fires, and water scarcity depend on theassessment of data from a variety of sectors and sources.

This is why it is absolutely vital for the European Union tohave an information system based on the latest informationand communication technology (ICT) that will providedecision-makers at all levels (local to European) with real-time environmental data, thus allowing them to makeimmediate and life-saving decisions.

Today, the emerging challenge is to use ICT technologies toimprove collaboration between organisations and tofacilitate interaction with civil society at large. Withoutimproved collaboration between European public sectororganisations, growth and security, jobs and freedom orhealth and a safe environment will be more difficult toachieve.

What is the SEIS?The Shared Environmental Information System (SEIS) is acollaborative initiative of the European Commission and theEuropean Environment Agency (EEA) to establish togetherwith the Member States an integrated and shared EU-wideenvironmental information system. This system would tie inbetter all existing data gathering and information flowsrelated to EU environmental policies and legislation. It willbe based on technologies such as the internet and satellitesystems and thus make environmental information morereadily available andeasier to understandto policy makersand the public.

The underlying aim of SEIS is also to move away from paper-based reporting to a system where information is managedas close as possible to its source and made available to usersin an open and transparent way.

According to the SEIS concept, environmentally-related dataand information will be stored in electronic databasesthroughout the European Union. These databases would beinterconnected virtually and be compatible with each other.The proposed SEIS is a decentralised but integrated web-enabled information system based on a network of publicinformation providers sharing environmental data andinformation. It will be built upon existing e-infrastructure,systems and services in Member States and EU institutions.

Why is SEIS needed?• Because EU Policy makers at all levels (local to European)

are convinced that better decisions need better andmore timely information

• Because EU Member States deserves a modern, efficientand user friendly e-Reporting System to fulfill theirreporting obligations related to European Unionenvironmental policies and legislation, avoidingduplication of efforts, overlapping and redundancies

Timely, reliable and relevant information on the state of theenvironment is essential for sound policy making. Policymakers and the public need to know in a timely manner howthe climate is changing, whether European waters arebecoming cleaner or more polluted, how nature is reactingto pollution and changing land use and whether policies areeffective. This information should be made available to all ina way that everyone can understand the changes to theenvironment and their impact.

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The need for sharing environmental information More than 70 of the several hundred pieces ofenvironmental legislation in force in the European Unionrequire Member States to report on specific aspects of theenvironment within their territory. A large amount ofenvironmental data is thus collected by various levels ofpublic authorities throughout the EU.

This information is used to analyse trends and pressures onthe environment and is vital when drawing up policy orassessing whether policy is effective or being properlyimplemented. At present, this wealth of information isneither made available in a timely manner nor in a formatthat policy makers and the public can readily understandand use. This is due to a range of obstacles of a legal,financial, technical or procedural nature.

Figure 1. The current fragmented reporting system

To better manage and communicate the wealth ofenvironmental information collected, the EuropeanCommission is proposing to create a Shared EnvironmentalInformation System for Europe (SEIS).

Figure 2. Once a Shared Environmental InformationSystem exists all players can efficiently share informationvia shared areas

Key Eurostat= European Commission statistical office EC=European Commission EEA=European Environmental Agency OECD=Organisation for Economic Cooperation andDevelopment UNEP= United Nations Environment Programme UNECE= United Nations Economic Commission for Europe

Reaping the benefits of technology SEIS will take advantage of the possibilities provided byinformation and communication technology to put intopractice the principle 'monitor once for timely and multi-purpose uses' . This will enable real-time data to be madeavailable to decision-makers and allow them to makeimmediate and life-saving decisions. Experiences of forestfires, floods and droughts show how much timelyenvironmental information can make a difference during anemergency. SEIS will allow data to be seamlessly combinedwith information from various sources and thus quicklyperform cross-thematic and cross-sector analyses that EUenvironmental policy requires. For example, the healtheffects of air pollution can be evaluated if statistics on airquality, population concentrations and health statistics areoverlapped for a specific region or geographical area andanalysed collectively. Action can then follow based on theresults.

What benefits will SEIS bring? Better regulation, better policy SEIS will simplify the reporting and accessing ofenvironmental information. While simplification is anessential element of drafting better legislation, betterpolicy does depend on high quality, relevant and timelyinformation. Reducing the administrative burden mustindeed lead to an improvement and not a deterioration inthe quality of public policy and regulation. Environmental data and information can be used by manyplayers for a number of purposes. Improving themechanisms for collecting, exchanging and using the datacan significantly increase the use of environmentally-relevant data at least cost to users. This will improve theeffectiveness of environmental policy and lead to better-informed policy discussions and decisions on pressingenvironmental challenges such as adapting to climatechange, managing ecosystems and natural resources in a

sustainable manner, protecting biodiversity, managingwater resources, and preventing and managingenvironmental crises such as floods and forest fires.

Simplification and Efficiency The benefits of SEIS as a decentralised information systembased on data-sharing are compelling. It will offerMember States and EU institutions a modern and efficientelectronic system to fulfil their reporting obligationsrelated to EU environmental policies. By doing away withpaper reporting, the process through whichenvironmental information is made available will besimpler, more flexible and more efficient.

SEIS will also allow the information requirementscurrently contained in thematic environmental legislationto be streamlined. Beyond the clear benefits on MemberStates obligations to European legislation SEIS will alsohave knock-on effects on national administrations'reporting requirements to international conventions,many of which cover similar geographical areas as EUlegislation. In terms of cost it is estimated that greatsavings can be made by improving the efficiency of data-gathering conducted by Member States. Greater

harmonisation and prioritisation of monitoring activitiesorganised at national and regional level is likely to beparticularly effective in improving the cost-efficiency ofcurrent investments.

Boosting Innovation and Intelligent eServices:eEurope, eGovernment, eEnvironment SEIS will also boost the development of intelligenteServices (eGovernment, eEnvironment, eReporting) bytaking advantage of data sharing infrastructures. Theseinclude services such as: • 'what is in your backyard' ; • alert-broadcast systems; • decision support systems based on integrated

assessment and geographic information services toassist the decision making on: - pressing environmental issues, - the prevention and management of

environmental crises and, - the implementation and effectiveness of

environmental legislation, in particular thosethat require holistic, integrated approaches suchas the Strategic Environmental Assessment (SEA)and Environmental Impact Assessment (EIA).

Boosting intelligent eGovernment services for theEnvironmentAccording to the 2008 UN eGovernment survey, Europe isleading the eGovernment in the world. However, whilethe uptake of programmes for 'linking up Europe' isprogressing in the economic and social sector, theenvironmental sector is lagging behind. The relativelyslow modernisation of environmental public authoritiesand the development of eGovernment services (nationaland pan-European) in the environmental field clearlyundermines the ability of public policy makers either torespond quickly and wisely to crisis situations or to designand implement long-term and sustainable policies andthe interaction with civil society at large. It is expectedthat SEIS will enable and boost the development ofintelligent e-services (eGovernment, eEnvironment,eReporting) by taking advantage of data sharinginfrastructures.

SEIS -The need for a standards based approach Where can GS1 standards help?The vision for SEIS is one where Internet technologies areused to support a network of information providerssharing environmental data and information.GS1/EPCglobal’s network architecture, coupled with theother elements of the GS1 system, provides the perfectsolution for enabling interoperability between the variousdatabases which store the data across the variousmember states. GS1 in Europe is working with theEuropean Task Force on SEIS to assist in the developmentof the solution.

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The GS1 Global Location Number (GLN) is now a mandatory componentof the Danish government’s eInvoicing initiative where each public

sector institution is required by law to have a GLN.

In 2003 a Danish law on public sector payments was passed paving the way for themandatory use of the electronic invoice when raising an invoice on the Danishpublic sector. Over the last two years, the application of eInvoicing within Denmark

has become a European showcase for a successful implementation of Business togovernment e-commerce.

eProcurement in the Danish public sectorFrom the 1st Feb 2005 all public sector institutions in Denmark were

required have a GLN and to accept electronic invoices from suppliers. Theexpected financial gains from digitising the invoicing system in the publicsector were calculated by the government to be in the region of €120million annually.

The solution - GLNThe collaboration between GS1 Denmark’s Global Location Number(GLN) allocation and the Danish government has been a small, but

essential, part of the whole Danish B2G eProcurement invoicingsolution.

A main component of the Danish eProcurement solution is the electronicinvoice and, naturally, the portion which deals with the identification ofpublic sector entities. The Danish Finance Ministry chose the GLN as their

unique and unambiguous numbering identification system for publicsector entities based on two primary requirements:

Now, almost three years on after implementation,many countries are looking towards Denmark’s

eProcurement model as a successful blueprintfor their own government initiatives in the

public sector. The adoption of the GS1 GLNis an example of the type of application

which is serving to add value to thepublic sector supply chain and

increasing the significance of theGLN.

GLN adoption by the Danish public sector

• To be a tool for routing electronic messages via theVANs (Value added networks).

• To be a mechanism to identify public sector entities inDenmark in electronic messages.

Key figures 2008 - post implementation of eInvoice:• eProcurement savings: €300 million estimated to date• Invoices digitised: €45 million estimated to date• Private sector companies affected: 440,000• Cost of GLN to government: 0.006% of annual savings realised by

the implementation of the eInvoice

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A Game Changer in Retailing, the Bar Code is 35 years youngThe design was straightforward – 59 black and white bars. Andthe inventors’ objectives were simple enough, too – to speed upthe grocery checkout line and give supermarkets a new tool totrack their stock.

But the bar code has become much more than that since it wasfirst used to read the price on a 10-pack of Juicy Fruit gum (67cents) on the morning of June 26, 1974. Now they are used toboard airplanes and track packages. Bar codes help people withdiabetes calibrate glucose meters and researchers study thepollination habits of bees. They inspired a hand-held video game,Barcode Battler, in 1991.

They even played a role in the 1992 presidential race, when then-President George H.W. Bush, at a campaign stop, seemedsurprised by what had already become a technological staple ofeveryday life.

Today, bar codes are scanned more than 5 billion times a dayaround the world. And after 35 years, they are both the mundaneminutiae of modern life and cultural icons of cold efficiency,identification and control.

“It was cheap and it was needed”, said George J. Laurer, who wasalready a veteran engineer at I.B.M. in 1970 when he was askedto lead a team assigned to devise a checkout system for grocerystores. “And it is reliable. Those three things probably contributedmore than anything else”.

Now 84 and retired, Mr. Laurer continues to be a cheerleader forhis invention even as the bar code is challenged by newer andmuch more sophisticated competitors. Radio frequencyidentification, or RFID is one such technology.

RFID uses the same technology as dashboard toll collectors andbuilding access key cards and allows businesses to identify andtrack specific items without a direct line of sight. But even as bigplayers like Wal-Mart and Procter & Gamble have pushed aheadwith RFID technology, the cautious retail business, in particular,has pushed back, in part because of concerns with price.Bar codes, after all, cost just half a cent each, while the electronictags used in RFID cost more than 5 cents each. As a result, asignificant portion of Wal-Mart’s suppliers rejected its mandate toadopt the newer technology.

“The technology took a bit of a black eye”, said Bob Sanders, aMotorola executive who once led a company that developed thefirst hand-held bar code scanner. A Wal-Mart spokesman, JohnSimley, acknowledged that “we hit realism” after the initial surgeof “media-generated hype” for RFID in 2003. But he said Wal-Martcontinues to introduce the technology.

Bar codes have evolved to respond to the competition. In recentyears, two-dimensional matrices, which resemble jumbles

checkerboards and carry muchmore information than bar codes,have come into use in Japan andhave gained a foothold inAmerica. Cellphones equippedwith technology for scanningthose patterns can read them and

display bar codes that could, for instance, be used instead of aticket for a concert of board a plane.

Mr. Laurer recalled that several designs, including a circularsymbol, were considered before the team settled on what is nowrecognized as the Universal Product Code, the name of thefamiliar format that used 30 black and 29 white lines to convey 95bits of data in binary code. The 12 digits give nothing more than“an address to look up information” in a database, Mr. Laurer said.When the initial design was proposed to a committee ofreviewers at the Massachusetts Institute of Technology in 1972,he said, it was returned with only one recommendation: that thefont of the “human readables,” the number found below the barcode, be changed to another font that was soon expected tobecome readable by machines and to supplant the stripedpattern.

“They were absolutely sure that within a few years no one wouldbe reading the bar code,” Mr. Laurer said. “Well, they were wrong.”Mr. Laurer said nether I.B.M. nor any of its developers everpatented the bar code, though manufacturers pay a minimalannual fee to a nonprofit Group GS1, to cover the administrationcosts of overseeing the international standards.

Sharon Buchanan was a 31-year-old cashier at the Marshsupermarket in Troy, Ohio, the day the bar code made its debut.One or two other clerks were working that day, but she waschosen to work the checkout, she said Thursday in an interview.“I was a little nervous at the time,” she said. “I mean what if thisdoesn’t work? Everybody was there taking pictures, thephotographers, the local press, people from around town. But itworked just fine. It was quite my 15 minutes of fame, I suppose.”For all the excitement that day, the adoption of the bar code wasgradual. For years, businesses were hamstrung by shoppers whorefused to buy bar-coded products, worrying that they might becheated at the checkout counter without price labels.

At the time, “the vision of the bar code as some sort ofsurveillance device with ominous social implications was quiteresonant,” said T.J. Jackson Lears, a cultural historian at RutgersUniversity. But with the advent of Google Earth and globaltracking devices, “it now seems comparatively innocuous.”

The bar code “has almost acquired a certain antique appeal as anearly expression of the sorting and categorizing impulse incomputer-driven marketing and sales,” he added.It seems, he said, “in some ways a charmingly archaic icon.”

This article originally appeared in the New York Times.

GS1 Ireland comment – while the article is quitebalanced, it is important to point out that RFID hasalready proven itself in terms of ROI, particularly atcase and pallet level and, in certain categories, at theconsumer unit. For the foreseeable future we expectto see both the linear and 2D bar codes being used, aswell as the RFID tag. Cost and other issues will be themain determining factors.

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Electronic Data Interchange (EDI) is the computer-to-computerexchange of business documents between companies, using astandard format. It replaces the traditional processes of preparingdata in paper form and sending it by mail or fax. EDI is based onthe use of message standards, ensuring that all participants use acommon language. A message standard consists of uniformformats for business documents which have been adopted forelectronic transmission purposes. It also includes security andcontrol elements and other rules and conventions relating to theuse of transaction sets that all users agree to follow.

The Irish Grocery Sector has been using eCom messaging for thepast 18years and today 90% of Invoices in the grocery sector aretransferred using EDI. EDI is a secure, stable, proven technology.The Irish Hardware/DIY Sector has recently completed thesuccessful implementation of a standard EDI Invoice message.There is huge opportunity and potential for all Irish Industrysectors to increase efficiency, save money and improve theircarbon footprint by implementing EDI.

We wanted to find out about eCom usage in Ireland and at the endof last year conducted an inaugural benchmark survey among ourmembership. The first survey involved 124 companies, mostlySME’s and representing a variety of different sectors. It looked intothe implementation of eCom across the GS1 community and theuse of EDI between trading partners.

We also spoke to a number of representatives from differentindustry sectors who are well qualified to speak about EDI. Theirviews are reported on the following 2 pages.

“EDI is a significant enabling technology for an efficient supplychain” says Tony Griffin of Musgrave. This comment by Tonyencourages us to look at EDI from a business perspective. Each ofthe contributors in their commentaries point out the precisebusiness benefits gained over the years by using EDI with theirtrading partners. “Closer Collaboration”, “Greater Efficiency”, HigherSpeed”, “Lower Cost”, “Improved Accuracy” are words that arepeppered throughout each contribution. These words must be likemusic, especially in today’s tough times.

But are we at the end of EDI implementation? Is there more that wecan do?

EDI is now an integral part of supply chain operations but, as our2008 survey indicated, there is more that can be done. We startedmany years ago with the Invoice Message in the Grocery Sector.This is now being emulated in the DIY Sector where the PurchaseOrder message is now gaining momentum. Other messages suchas the Despatch Advice (or Advanced Shipping Notice) are alsobeing used by some parties. But is the full commercial businessmodel implemented using EDI? Are you benefiting from the othermessages?

The management gurus will tell us that when we completesomething we must start again and look for more improvement.This may be applied to EDI - once one message is completed, wemust look at the next, the next and the next. Looking at thepositive comments overleaf, particularly in these times, EDI mustbe an area where positive short and long term gains can be made.

Today, there are many more EDI based solutions available. Lastyear’s survey clearly indicated that we have moved well beyondthe rigid structures of Traditional Value Added Networks withsolution orientated services based on EDI. This has resulted in agreater accessibility to EDI, particularly for the SME community.While some companies are still using the traditional VAN EDI, younow have solutions that are Web enabled, Web to VAN to Web,outsourced secure solutions, secure internet point to point and thelist is growing. GS1 are applying their message standards in allthese areas, which means that companies have more choice ofsolution providers. In Support of this, GS1 Ireland has started asolution provider accreditation programme to assist both the enduser and the solution providers

The cost of EDI services has also fallen considerably since the early1990’s. Some companies report that if all the costs of commercialpaper, envelopes and stamps are considered alone – there aresignificant savings versus the costs of EDI. These savings riseconsiderably the more EDI messaging you do.The survey also pointed to the increasing development ofupstream EDI. Companies can now benefit both at the supply sideand the demand side.

With all the challenges in today’s market, the value proposition forEDI, both for the short term savings and a long term strategy, isevidenced by our contributors. However, GS1 Ireland wouldhighlight the importance of message standards. A messagestandard is a language based on the business model that enablescomputers to talk to computers. It is mission critical to work withthese message standards to avoid the equivalent of the electronicTower of Babel.

GS1 eCom (EDI)GS1 Ireland Electronic Commerce Strategic Survey

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“This sort of technology is all aboutcollaboratively sharing information in atimely manner.”

EDI is a significant enabling technology for an efficientsupply chain,” explains Tony. “Musgrave has been engagingin paperless trade with all our suppliers for a number ofyears: all the purchase orders are placed via EDI and all theinvoices received via EDI. However, we have gone a stepfurther and have introduced electronic invoice matching:matching the goods received note to the electronic invoicevia EDI.”

Indeed, the impact of EDI has been so dramatic thatIreland’s biggest retail groups, Musgrave included, relyheavily on the technology for the effective running of theirsupply chain. “If you consider our chilled distribution, forexample, all of the orders are placed by our retail partnersin SuperValu and Centra stores, consolidated, split-up bysupplier and sent to the various suppliers via EDI,” Tonyexplains. “The timeliness of that is key, so that the goods, insome instances, are delivered to our warehouse forimmediate onward delivery to satisfy the needs ofconsumers. It is a very efficient supply chain.”

Improving productivity and efficiency in the supply chain isan ongoing process, however, and Tony and his team workvery closely with their suppliers on the sharing ofinformation. Combining the already tried and trusted EDImethodology with web-based technology, for example, isleading to further improvements.

“Web Purchase Ordering allows suppliers to download ourpurchase order from a secure website, giving them accessto our requirements and our ordering patterns, very earlyin the process,” Tony explains. “We also engage in “WebAdvance Shipping Notice” with a number of our “greenlane” or trusted supplier partners, which serves to speed upthe goods in process at our end. This sort of technology isall about collaboratively sharing information in a timelymanner.”

Tony GriffinHead of IT Shared Services, Musgrave

“Don't look at EDI as a tacticalresponse to a request. Take a broader view andexploit the benefits.”

Do you operate EDI with all your major tradecustomer groups? Yes, EDI removes paper and all that goes with it, providing anefficient method for transferring data with improved accuracy.

Do you use the same EDI provider for allcustomers? We use the Sterling Commerce product suite integrated with ourSAP system to generate all our EDI data but we are looking at ourVAN arrangements as there are a number of more cost effectiveofferings emerging.

What are the key operational requirements thatEDI imposes? Firstly, 100% accuracy on all data elements associated with trading,unit of measure, pricing, descriptions, bar codes. Secondly, it’simportant to recognise that there are operational controls relatingto EDI and assign responsibility for management and monitoring.

What are the main benefits of EDI for a supplier? 1. Generally where there are EDI relationships in place there are

close working relations between customer and supplier.2. Efficient mechanism of sending / receiving information.3. Higher accuracy rates4. Speedier turn-around times - EDI works 24/7.

Can these be quantified? Yes, they can. In some cases, you can measure manual data entrycosts versus EDI costs. In most cases, you have to take a broaderlook at supply chain costs and where cost ( people’s time ) is spent.

What advice would you give to other businesssectors that have yet to implement EDI? Don't look at EDI as a tactical response to a request. Take a broaderview and exploit the benefits. Businesses that have scale in terms ofdocument / transaction processing will see immediate benefits inan EDI solution.

Tony MinogueGeneral Manager Glanbia Business Services

The Benefits of EDI:a practical perspective from an industry point of view

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The hardware/DIY sector is currently in the process ofimplementing EDI. Can you tell us a little of the background tothe project.The electronic trading initiative was begun in 2007 and involved workingwith a representative group to oversee an agreed industry wide adoption ofEDI/electronic trading. The initial group comprised of suppliers and retailersfrom our sector engaged in a proof of concept pilot study based on theimplementation of a standard EDI invoice message and on internationalspecifications. The 5 retail and supplier organisations (the retailers wereAmalgamated Hardware, Associated Hardware, National Hardware, 4Home,Glanbia and on the supplier side – Crown Paints, Irish Cement, Ronseal,Groundforce, and Velux) operated this pilot for a period of months to test thetheory and identify potential problems.

What stage is the roll out currently at? The initial pilot programme is complete and the solution is now beingextended to other retail organisations and many more supplier companieswho are in the process of adopting or have already adopted an integratedEDI solution. The hardware/DIY group within GS1 decided that an orderlyexpansion of the EDI community was the best way forward and thatsuppliers would be encouraged to participate based on volume of paperissued rather than value of invoice. This is in keeping with the ethos ofelectronic trading in cutting down or eliminating paper completely.

What is the timeframe for completion? There is no timeframe as such, the process is ongoing and it is non-proprietary and non-competitive. Companies within our sector wishing toadopt the agreed industry wide standard electronic data interchangemessage can do so at their own pace and work with trading partners as theyso choose.

Are all trade sectors of the IHBMAimplementing EDI?All stakeholders are engaged in this process, from manufacturers through tosuppliers, wholesalers, agents, retailers, etc. The benefits of electronictrading go through the whole supply chain and there are savings to be madeglobally for the industry and sectorally and individually for companies.

What have been the main issues encountered? The main problems included the paper legacy issue, whereby companieshave, since their inception, been used to operating entirely within a paperenvironment. The mindset that is needed to leave that behind has been anobstacle but is being overcome. The second obstacle is that paper lendsitself to companies making specific changes to business documentation forvarious business reasons. The streamlining and discipline that is requiredwithin an electronic trading forum is now being understood by companiesembarking on the process. Thirdly, the timing of the process has also been both a positive and anegative. With the downturn in the economy and in our hardware/buildingmaterials/DIY sector in particular, the economic wherewithal has beenreduced. However, in a time of change, all change is possible, and companiesare now looking at cost savings offered by an orderly change to electronictrading.

What have been the main benefits realised to date? The benefits to date have included savings on the cost of handling andprocessing invoices and also with the extension of the programme to allother business documents. These savings include invoice mailing costs,invoice queries, errors, receiving and scanning invoices, checking validation,error reporting, etc. These are significant daily, weekly and monthly costs forany organisation and do not include the additional costs, such as invoicestationery, storage, retrieval, etc. After an initial set up charge, the return oninvestment for all sectors of the industry is very significant and is very muchappreciated in the current economic climate.

Do you operate EDI withall your major tradecustomer groups? For many years we have used EDIwith all our major trading partners,with our main focus being on EDIinvoicing.

Do you use the same EDIprovider for all customers? We channel all our EDI through oneEDI service provider who in turn hasthe capability to interconnect toany service provider that ourtrading partners may choose.

What are the keyoperational requirementsthat EDI imposes?

Seamless integration with back-office (ERP) systems is the keyelement. For statutory reasons,certain EDI message files must beretained for 6 years. For auditingpurposes (incl. SOX), there must befull audit trails for all EDItransactions.

What are the main benefitsof EDI for a supplier? Speed: transactions to/from ourtrading partners are faster than apaper-based system. Accuracy: re-keying errors that are a feature of apaper-based system are avoided.Security: EDI is a highly securemethod for transacting business.

From the supplier’s perspective,these elements greatly minimise

delays withpayments.For a globalcompany, similarEANCOM Standard EDI solutionscan be deployed across manymarkets.

Can these be quantified? Yes – for a paper-based system youfactor in the frequency of postaldelays, missing post, keying errorsetc.

What advice would yougive to other businesssectors that have yet toimplement EDI? EDI should be seriously consideredif the transaction volume justifies it.

Jim Copeland, Chief Executive, IHBMA

John Dooley, IT Business Analyst, JTL Ireland Limited

“All stakeholders are engaged in this process, from manufacturers through to suppliers, wholesalers, agents, retailers.”

12

Last year’s pork dioxin crisis in Ireland served as a starkreminder of the need for a proper food traceability solution.The joint Oireachtas report stated that “the present system formonitoring and tracing Irish pork products is ineffective, andsignificant changes are required in order to avoid a repeat ofthe total recall of Irish pork products which has resulted in acost of millions of Euro in compensation payments to the Irishtaxpayer”. The report said that an effective traceability systemwould have facilitated a recall of contaminated product only.This was not possible in the dioxin contamination incident,which necessitated a 100% recall for a 10% contaminationrate. Had the traceability system been developed based onGS1 standards, there is no question a targeted recall of primeproducts coded with bar codes containing batch data wouldhave been possible.

GS1 has been at the forefront of product identification andtraceability solutions for the past 30 years. There are alreadyexcellent implementations of GS1 standards both in the foodand healthcare sectors that would provide evidence of this.For example, in the case of Irish beef products affected by thesame dioxin contamination, the total recall was not necessarydue in part to the fact that proper batch traceability systemsbased on GS1 identifiers were already in place.

Tracking from farm to fork is becoming even more effectiveand efficient thanks to GS1’s development of low cost RFIDtags that can be used on animals. Recent developments inthis area in New Zealand and Denmark, with pig tracker areundoubtedly more appropriate and fit for purpose than theconventional ear tags. Furthermore, RFID tags can be used totrack the bulk product movements across the supply chain.For point-of-sale and in store stock management purposes,the marking of meat products labelled with GS1 databarcodes could indicate the batch information required toenable a targeted recall of all Irish produce, including pork.Consumers have a right to assume that all food put on themarket is safe and fully traceable. Under EU and localregulation, this is a legal requirement. The various EUdirectives on beef traceability, the general food law and thefood packaging law provide clear regulation for allstakeholders involved in the supply chain.

Traceability is defined as “the ability to trace the history,application or location of an item by means of recordedidentification. Traceability can relate to the origin of materialsand parts, the processing history and the distribution andlocation of the product after delivery”. It is important becauseit facilitates the withdrawal of foods and enables consumersto be provided with targeted and accurate informationconcerning implicated products. The ability to pinpoint theorigin of food ingredients and food sources is of greatimportance to the protection of the consumer, in particularwhen product recalls are required. In the event of a foodsafety problem, quick identification of affected products orbatches of products can reduce the number of consumersexposed to a potential hazard.

For the foodindustry, theimplications of amajor food safetyfailure can becommerciallydevastating, with product recalls, reputational damage andliability damages. Traceability systems assist in determiningfault, thereby strengthening the liability incentive for firms toadopt good food safety practices.

Irish and European law requires all food and animal feedbusinesses to establish and implement a food traceabilitysystem. It is a legal requirement for businesses to trace onestep forward and one step back. This means food businessowners must know who supplied them and whom or towhere their product has gone. However, there is no legalrequirement for businesses to have traceability systems thattrace raw materials through the factory and into the finishedproduct. The key components of an effective traceabilitysystem are: identification, data capture and recording andcommunication. This is why the global supply chainstandards as developed by GS1 are critical, because they cansupport each component.

GS1 ID keys for raw materials, finished products, logistic units(totes, pallets etc) and locations enable the accurateidentification of what, where and when. With the speed ofmovement of products along today’s supply chain, it isessential to use automatic data capture technologies(scanning), whether GS1 barcodes or RFID tags. Scanningeliminates the need for paperwork and at the same timereduces errors. More importantly, it records “events” i.e. what,where, when in real time.

Seeing traceability solely as a cost burden is a profit limitingperspective. In processes where the GS1 system of AIDC(automatic identification and data capture) has beendeployed there has been a very considerable improvement interms of efficiency and return on investment. In suchapplications traceability becomes a by-product and targetedrecalls are made possible. The dioxin crisis highlights theneed for implementing AIDC solutions across the entiresupply chain based on open standards. In the future it willthen be possible to identify the specific product, where it hasbeen and where it went.

The Food Safety Authority of Ireland, in association withGS1 Ireland, is hosting a seminar on meat traceability atthe Radisson Hotel, Golden Lane, Dublin 8 on 11thNovember. The seminar, “Meat Traceability – everyone’sbusiness”, will review current meat traceability systemsand also showcase ‘model’ solutions from Ireland andabroad. See opposite for full details.

Traceability can come at no extra costA fully traceable system for farm foods is essential especially in times of crisis

14

The term “upstream”, when used in a supply chain context,refers to the relationships between manufacturers, their rawmaterials and packaging suppliers.

Since the late 1970’s the use of GS1 standards in industryhave considerably reduced costs in the downstream supplychain. The use of unique product numbering, palletlabelling, barcode scanning and electronic businessmessaging have streamlined supply and demand chainsand improved traceability globally. More recently RFID isbeing used to track product and exchange information onhigher-value goods.

The Case for integrationThe development of the global supply chain, as well as awider variety of products, often in smaller quantities, hasled to the time between design and delivery to finalconsumer becoming shorter and shorter. This puts pressureon the “upstream” part of the supply chain and drives theneed for integration - more reliability of the informationflow and greater visibility of the physical flow.

The GCI ResponseThe Global Commerce initiative (GCI), an international usergroup consisting of manufacturers, suppliers and retailers,in 1999 turned their attention to the Upstream Supplychain and established the Global Upstream Supply Initiative(GUSI).

GUSI (the GS1 & GCI Solution) addresses the challenges inthe Supply Chain Integration between manufacturers andtheir suppliers. Upstream Integration is about improvingthe processes by electronically sharing information andimproving visibility of demand, demand changes andinventory.

The case for implementing the Global Upstream SupplyInitiative (GUSI) is compelling. It completes the supply chainintegration using GS1 standards from start (raw material) tofinish (consumer). It is essentially the eComm solution forupstream supply chain, enabling manufacturers toefficiently manage their incoming material processes morecost effectively.

The initiative has been implemented across Europe andAustralia, multinationals such as Unilever, Kraft, Nestle, P&G,Crown, Smurfit Kappa Group and many more are realisingthe benefits. The initiative is made possible by the use ofstandards – specifically GS1 standards in eCommerce.

GS1 Ireland is ready to support member trading partners toimplement this Global Upstream Supply Initiative (GUSI). Asimple “Plug & Play” suite of implementation tools has beendeveloped which includes, an integration model, thebusiness case outline and the implementation guide foreach of the pre-determined electronic business messages.Given the present economic climate in Ireland,competitiveness in industry is a key challenge, the adoptionof GUSI is seen as an opportunity to add efficiency and gainadvantage on competitors.

Many of the operational and financial benefits are outlinedbelow. The un-measured benefit is in the improvement ofthe trading relationships as participant companies learn totrust one another with their inventories and forecasts.

GS1 Ireland – Global Upstream Supply Initiative (GUSI)

15

Operational Benefits Operationally GUSI brings transparency into theupstream supply chain. • It eliminates paper-work by implementing GS1

standard eComm messages and the ability to scanproduct into back office systems, in turn significantlyreducing admin costs and eliminating dataalignment errors.

• It allows for the reductions in inventory holdings dueto the rapid computer notification of actual events(no more waiting for someone to key-in theinformation).

• It facilitates a reduced life cycle, as the manufacturerand the supplier have transparency of stock holdingsand quality control outcomes.

• It also allows for easier and more informed changesto bills of material and thus these can occur morerapidly and lead to a significant reduction in waste.

• New products can now have a shorter time-to-market.

• It reduces stock-outs enabling full supply chainvisibility, with both inventory held and salesforecasted information available to all.

Financial BenefitsOverall there are significant financial benefits, mostly inthe areas identified in the Operational Benefits.Below are some percentages from the combined casestudies collated by GS1 and GCI.• Inventory levels reduced by between 10 and 30%• Sales Admin costs – reduced by 5-10%• Finance Accounts Payable Admin – 80% reduction• Lead Times – reduced by 40-50% (in on-site

requirement time)• Stock-out situation reduction – 10 – 30%• Service level increase – now averaging 99.5%

customer service level.

It is conservatively estimated that cost savings in theregion of €1 per pallet is not exceptional. This saving fallson both sides of the supply chain and increases anddecreases based on how standard practices wereutilised prior to GUSI implementation.All tools are available from GS1 Ireland atwww.gs1ie.org.

Manufacturers - Call your top suppliers now and startthe discussion that will quickly realise real quantifiablecost savings for you and your supplier.

Suppliers - Don’t wait for your manufacturing clients tocall you – be proactive – insist on savings – implementGUSI now.The lessons have been learnt already, the tools arealready available, the case studies are there to examine,NOW it’s time to agree objectives with your tradingpartners and ACT.

For more information please contact GS1 Ireland on+353 1 2080660 or by email atbarry.spellman@gs1ie.org

Bar codingAbout the course:This course covers everything to do with bar coding. You willlearn how to assign unique identifiers (numbers) to all yourproducts and apply them in the correct bar code format.These formats include: bar codes for retail (POS), outerpackaging and pallet bar codes. This course also covers howthe GS1 standards can be used to support traceabilitysolutions. No prior knowledge of bar coding is required forthis course.

Prices: 1 person €350, 2 people €280pp, 3 people€260pp and 4+ people €200pp (prices exclude VAT). Price includes Lunchand training material.

Duration: 10am - 4pm Location: GS1 Ireland, The Nutley Building,

Merrion Road, Dublin 4Dates: September 30th, October 13th &

November 19th

EDI About the course:The objective of this course is to give a full understanding ofall aspects of electronic trading. The course begins with anoverview on the need for standards and gradually builds upto the construction of EDI messages.

Prices: 1 person €475, 2 people €365pp (pricesexclude VAT)Price includes Lunch and training material.

Duration: Day 1: 11am – 4.30pm Day 2: 9.30am – 4.00pmLocation: GS1 Ireland, The Nutley Building, Merrion

Road, Dublin 4Dates: October 20th & 21st

Places are limited, so BOOK EARLY

Autumn Training Courses

Bar codeVerificationAsk yourself two simplequestions......Are you having trouble with your bar codesscanning, leading to troubled supplier-customer relationships?

How confident are you that your bar codes willscan at all points of your supply chain?

If yes, GS1 Ireland can help, if you need to get yourbar code verified please contact Beatriz Gil Martin on 01 208-0660 or email beatriz.gilmartin@gs1ie.org

that its the responsibility of the‘originator’ of the bar code,usually the brand owner of theproduct being bar coded, toensure that it meets the qualityrequirements of the entiresupply chain.

Ensure that your bar codesscan first time, everytime!

Did you know....

Learn about the GS1 Standards online visit LEARN: the GS1 online elearning tool seewww.gs1ie.org for details

New Members

Aerospace Software Developments

Ainne Ni Bhrian Gluten Free Product

Allflags Ltd

Annies Bakery

Ansamed Ltd

AOTI Ltd

Atlantic Cleaning Products

Awear Ltd

Axis Pivotal Product Management Ltd

Bars for Cars Ltd

Beechlawn Organic Farm

Birds Eye Ireland Ltd

Blue Bio Pharmaceuticals Ltd

BobbyJean Records Ltd

Brennan Convenience Foods Ltd

Brian McCormack

Bushby's Strawberries

Business Management Partners Ltd

Carol Home Bakery

Carraigh Donn (Trading) Ltd

Chamco Foods Ireland Ltd

Charem Ltd

Clare Spring Water

CleverKids

Coachbury Distributions Ltd

Coffee Perfection Ltd

Cognitive Solutions

Corderry Fruit Farm

Corman Miloko Ireland Ltd

Crilco Confections Ltd

Decawave

Duncannon Fish Company Ltd

Dundon Food Experience

Entray Bakery

Errigal Records

Europet Ltd

Fahy Import

Feis Publications Ltd

Futurtek Ltd

G & A Agnew Ltd

Gairdin

Gerry Joyce Meat Sales

Giraffe Brands Ltd

Glenbrook Clothing

GS1 Ireland would like to welcome the following as NewMembers of the organisation

Going Healthy

GP Clothing

GreenStar Ltd

Greyhound Recycling Ltd

Holycross Good Food

HW China Market

ID Solutions

Inside Outside

Insulation Distributors Ltd

IQ Brands Ltd

Island Seafoods Ltd

Jakes Pet Suppliers

Jim's Handy Mat

Katies Real Chocolate

Kavanaghs Catering & Fine Foods

Kayem Distribution Ltd

Kelcan Limited

Laincar Ltd

Laois Poultry & Frozen Foods Ltd

L'Artisan Ltd

M Stacey Stone Products

Mags Home baking

Marks Meats

Maspeth Foods

Mauds Ice Cream

Michael Kearney furniture Navan Ltd

Michael Moore Fruit & Veg

MIG Live

Milne Foods Ltd

Mophia's Gluten Free Bakery

Motor Distributors Limited

Mulrooney's Gala Shop

Musgrave Wholesale Partners Ireland

Natasha's Living Food

Natures Oils Ltd

Nature's Way Energy Ltd

Osmosis Ireland

Pacific Foods Ltd

Pandora Bell

Paul Brophy Produce

Paul Garvey Agencies Ltd

Pauwels Trafo Ireland Ltd

Peggy's Homemade Goodness

Pepsico International Ltd

Pergola FineFoods Ltd

Pink Gill Farm

Quinn Litepac Ltd

Quinn Therm Ltd

Real View Manufacturing Ltd

Rose Marketing UK ltd

Rosy Days

Sunnyside Produce

Sushi King

Tanklok Ltd

The Artisan Pizza company

The Blue Haven Food Company

The Millhouse Bar & Restaurant

Thunders Bakery Ltd

Tissue Link Ireland Ltd

Tree Hugger ltd

TTR Ireland Ltd

Valentia Island Farmhouse Dairy

Village Home Bakery

Waveform Solutions

Wes-Chem

Wexford's Best

Wish4 Fairtrade

XS Direct Ltd

Zanna

17

618

IntroductionIKEA is a multinational furnishings company founded in1943 by Ingvar Kamprad. The first IKEA store was opened in1958 in Älmhult, Sweden.

Today the group has over 290 stores in 36 countries.IKEA's first Irish store was opened in Belfast in 2007 and itsDublin store opened in Ballymun at the end of July 2009. In2008 the turnover was 22.5 billion euro. The company hassome 104,000 employees in 44 Countries.

With about 1,500 suppliers in 55 countries, IKEA’s previoussystem for traceability and identification of products hadbecome too fragmented.

The furnishings company looked to the GS1 System ofstandards to introduce a more efficient and standardisedstructure to their supply chain.

Pilot projectIn April 2004, IKEA commenced a study of which systemsand methods were being used for traceability in the groupand how these could be improved. The results of the studyfound that goods could not be traced at pallet level outsidean individual IKEA warehouse, but only at truck level. As thedeliveries arrived from the supplier, they were logged atthe inbound goods dock. The pallets were given uniquenumbers by each individual warehouse. However, if a palletwas sent from one IKEA warehouse to another, it needed tobe re-registered, a very time consuming process.

Following the results from the survey, IKEA began a pilotproject using the GS1 System of standards and its uniqueidentification key, the Serial Shipping Container Code(SSCC) for their warehouses in Älmhult and Torsvik(Sweden) together with three of their largest suppliers. TheGS1 System had quickly demonstrated positive effectsduring the pilot. Previously when the warehouse hadreceived pallets, these were left in the dock area awaitinglogging and processing before they could be movedfurther into the warehouse. During the pilot project, theSSCC bar code was read as the pallet was unloadedallowing it to be picked up and stored immediately by atruck driver. The time to unload a truck was reduced by44% and the turnover in the warehouse’s dock areaincreased by 55%.

In the summer of 2007, IKEA’s pilot project ended withpositive results demonstrating that the GS1System ofstandards had rapidly improved their traceability,exception handling and product quality.

According to Jan Ståhl, business developer, supply chaindevelopment at IKEA of Sweden, "Inventory control hasimproved, stock information has become more accurateand traceability of our pallets has improved. These benefitshave also been realised by the three suppliers who havestarted to use the GS1 System for internal traceability intheir own warehouses."

The pilot found that traceability at pallet level had alsoimproved IKEA’s product quality by simplifying thewarehouses’ exception reporting to the suppliers since allinformation on the pallets origin were readily available.

"The idea is that, due to the different legal demands onproduct quality and product content in different countries,we can easily trace the raw materials from which ourproducts are made thus further improving quality," explainsJan Ståhl.

IKEA adopts GS1 System of standardsFollowing the success of the pilot project, it was decidedthat all of furniture giant IKEA’s warehouses worldwide andtheir 400 largest suppliers would start adopting the GS1System of standards and the SSCC in September 2007. TheGS1 System is currently in the process of being adopted byall of IKEA’s warehouses worldwide which handle over 20million cubic metres of goods each year.

IKEA’s warehouse staff have already received training onhow to use the GS1 System and the company has alreadyimplemented a warehouse management system that isable to process pallet numbers. This has allowed thefurniture giant to start implementing the GS1 System ofstandards to trace their pallets.

IKEA has adopted the GS1 SSCC to uniquely identify palletsin their warehouses worldwide.

IKEA’s pallets are uniquely identified using an SSCC whichconsists of 18 digits and is bar coded using GS1-128. Byusing this GS1 key a package can be uniquely identified byeverybody involved: suppliers, transporters, and, in thiscase, IKEA’s warehouses and stores.

"It’s not just about adopting the SSCC, but also getting allof IKEA’s other IT systems to process this information andGS1’s identification procedures," explains Jan Ståhl.

“The cost advantages achieved by introducing the GS1System will in general automatically result in pricereductions for IKEA’s customers. Costs and prices will bereduced even further through a parallel project for the

Case Study: IKEA by GS1 SwedenThe GS1 ‘Seal of Approval’

19

implementation of the GS1 System in IKEA stores. Ourstore in Malmö can already accept, capture, and processSSCC numbers," says Jan Ståhl. "Next year we will start toroll out the system to all our other stores worldwide."

In addition to this, more suppliers will be included in thenext phase of the adoption and the GS1 System willfinally be used by approximately 900 suppliers.

Future plans: RFID solutionIKEA is also studying the possibilities and advantages ofimplementing RFID following their adoption of the GS1System of standards to further improve traceability,exception reporting and inventory control."By using RFID we would be able to have multiple readpoints to ensure that we load and unload the right goodsautomatically. In principle it is easy to put tags on thepallets, but implementation of a full RFID solution alsorequires the installation of various related equipmentsuch as RFID middleware to enable data exchange," saysJan Spjuth, project manager at supply chain developmentat IKEA of Sweden.

IKEA’s use of RFID in their supply chain is dependent on anumber of market factors. The cost of RFID tags andreaders is expected to go down and their competitors areplanning strategic RFID initiatives. IKEA is currentlysupporting and following the developments of RFID/EPCstandards.

"The RFID project has only just started," says Jan Spjuth.“We will not be developing our own RFID system, but willfollow the standards that exist. IKEA plan to start carryingout RFID tests next year at a number of stores for certainproduct flows.

"We have already taken the first step by joining GS1 andstarting to use SSCC. This is a prerequisite for theintroduction of RFID/EPC," concludes Jan Spjuth.

The time to unload a truckwas reduced by 44% and theturnover in the warehouse’sdock area increased by 55%.

“The cost advantages achieved byintroducing the GS1 System will ingeneral automatically result in pricereductions for IKEA’s customers.