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December 13, 2017
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Report urges wider use of existing bar-code standards to meet consumers' needs, improve supply chain efficiency

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To improve efficiency and meet consumers' demand for information, more companies must use current bar-code standards to the fullest extent, says a new report.

Although current bar-code standards can help meet growing demand for more product information, many companies have failed to fully adopt and apply them. In addition, improved data quality and wider use of bar-code standards could improve supply chain efficiency.

Those are just some of the conclusions of The Future of Standards in the Consumer Goods and Retail Industry, a new report issued by Capgemini Consulting, the technical standards organization GS1, and the retail group The Consumer Goods Forum.

Bar-code standards allow trading partners to read the data contained in the black-and-white symbols. Traditionally, only manufacturers, wholesalers, retailers, and companies involved in warehousing and distribution had any interest in the information bar codes conveyed. But now mobile technologies allow consumers to scan bar codes themselves—and they increasingly are demanding data such as product origin, ingredients, and environmental impact.

To satisfy consumers' demand for product information, brand owners and retailers will have to add more data to their bar codes and ensure consistent quality of information regardless of how and where the codes are read. Much of this information could be added using current standards, yet many companies—especially small and medium-size ones—are not taking advantage of this existing capability, the report said.

Bar codes could provide other types of information to satisfy market demand. For example, bar codes are capable of providing the environmental information consumers want, but industry would first have to develop a common set of sustainability metrics and incorporate it into bar-code standards, the report said.

To make all of this happen, supply chain data and information from entities outside the traditional supply chain, such as the marketing department, will have to come together, the report also said.

In addition, the report recommended that the role of GS1 be expanded from a standards-defining body to a center of excellence for standards deployment. That would require the organization to get involved in verifying data quality. Respondents to an associated survey suggested that GS1 develop implementation guidelines and provide monitoring systems to ensure consistent adoption of bar-code standards. The lack of clear guidelines and oversight has contributed to supply chain inefficiencies and data inconsistencies, they said.

"Standardization will enable increased transparency in the supply chain across suppliers and retailers, which will allow for better demand management and replenishment synchronization, and thus improve inventory positions and product availability," said Kees Jacobs, a principal at Capgemini Consulting.

Click here to view a copy of the report.

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