A Toronto-based software developer is helping retailers across North America get ready for the replacement of the Universal Product Code with a new global standard by January.
Triversity Inc., which develops Point-of-Sale/Point-of-Interaction solutions, is updating retailers’ existing
system software to ensure their cash registers and point of sale systems will recognize the new Global Trade Item Number.
The Global Trade Item Number or GTIN will replace the American standard 12-digit bar code with the European version, which uses 13 digits. Called the 2005 deadline was set eight years ago by Uniform Code Council Inc., the not-for-profit organization that manages bar code standards worldwide.
Colin Haig, vice-president of business development for POS/POI at Triversity, said the key for Sunrise 2005 will be the impact to systems that handle the supply chain and customer transactional sides of retailers’ systems.
As Y2K was four years ago, GTIN represents an opportunity for retailers to change and update their systems to get some new capabilities, he said.
Outside of North America, companies have used eight and 13-digit codes issued by the European Article Numbering (EAN) Association. This meant that while North American companies could simply affix a zero to the front of their codes to sell their products abroad, manufacturers outside North America had to repackage their products with 12-digit codes.
The bar code, which was patented in 1952 and developed in 1971 by two IBM employees, identifies and tracks products at the point of sale, primarily in retail stores.
The UPC Code debuted 30 years ago when a pack of Wrigley gum was first scanned at a Troy, Ohio grocery store.
Today the UCC estimates that an average of five billion bar codes – found on everything from consumer goods to health forms – are scanned every day worldwide.
“”We have true globalization of business now,”” said Al Garton, director of channel management at the UCC. “”Everybody needs to be prepared to handle all the types of number structures that are part of the global standards.”” Garton said retailers for the most part have made system changes or are in the process of doing so. Retailers who aren’t ready may face possible “”competitive issues,”” primarily in customer service. If systems can’t read the 13-digit bar code retailers will have to manually key in the item number at the point of sale, slowing down the transaction process.
Garton added they may also encounter problems around electronic data communications with their trading partners in terms of being able to send and receive messages that contain the additional numerical structures.
“”It puts them at a competitive disadvantage,”” said Garton. “”Their competitors down the street may have gone ahead and made these changes, are handling all these numbers in a seamless way and are moving on about their business and not worrying about these things.””
Garton said third party solution providers have been helpful in getting the message out and aiding retailers in properly implementing the changes.
In his June report, “”Sunrise 2005: Retailers and Suppliers Set To Clash – Both Will Lose,”” Scott Langdoc, an analyst at AMR Research, said some retailers not only might not be ready but will expect suppliers to pick up the tab for continuing to support only UPC and 12-digit item data until they have the technology in place to handle it. Suppliers, he added, will be at the mercy of retailers’ power.
Langdoc cautions that retailers who don’t comply will face expensive band-aids such as integration platforms or data mapping to close the gap between the 12 and 13-digit data structure. He also said failing to adopt the new standards will stall plans to use RFID technology in the future as tags will use a GTIN-based Electronic Product Code.
Look to integrators
He suggested retailers should look to services from integrators and consulting firms for help, map data using retail data integration platforms from companies like Sterling Commerce and Trigo (part of IBM) and delay RFID projects.
“”We’re leveraging other partners to help us do the work. We have had other partners who are leveraging what we bring to the table too. It’s been a team approach to address the problem,”” said Ray Tromba, director of retail application management systems for IBM Global Services, which recently introduced services to help retailers and distributors meet the deadline.
IBM Research Organization has developed a set of tools allowing it to go into application code and look for specific areas that need to be modified to recognize both an eight- and 13-digit UPC Code.
Once these have been identified, IBM or third-party vendors will go in and make the necessary changes.
Colin Haig at Triversity said retailers using its Transcationware software generally have the ability to configure the system to support the extra digits for the product bar codes. This can be set up in a few hours, tested and rolled out over a few days.
Triversity and its resellers are helping smaller retailers while larger retailers are using Triversity’s software tools to enable the new functions.
Retailers also have to ensure their scanners can accept the new extended bar code.
Haig said this presents an opportunity for VARs to replace the outdated equipment. For example, a big box retailer might have 1,000 stores with 40 devices in each store, totalling 40,000 devices at anywhere from U.S. $300 to $1,000 a piece.
“”Retailers on the old systems are going to go through a lot of pain if they haven’t done it by now,”” said Haig.