Jerzy
Majewski,v
Institute
of Logistics and Warehousing
Supply chain management is based on efficient distribution channels that enable the physical transfer of materials and efficient channels for the exchange of information related to this transfer. This statement is not so groundbreaking that one would be fascinated by the accuracy of its author’s insights after reading it, but it is important enough to fully reflect the actual understanding of logistics. Just as the physical movement of materials is obvious for logistics and readable for the average observer of the supply chain, tracking this movement in an extended chain is no longer so obvious and readable.
The implementation of tracking the flow of materials in the supply chain is handled (or should be handled) by IT systems classified as SCM.v
Various events occur along the route of movement of logistic units in the supply chain. They determine the scope of information generated in subsequent links of the chain. Both in the production process and in the distribution of finished products, in transport and in introducing products to the market, subsequent information identifying logistic units is added.
The physical content of a logistic unit moved in the supply chain is generally determined at the stage of its formation at the beginning of the chain – during the packaging of finished products. At this stage, it is possible to identify the logistic unit as a whole, for example in the form of a pallet with goods (homogeneous or mixed). Other segments of information, such as destination, are usually known only in later stages of delivery execution. During trade exchange, various elements of information are generated, changed and applied to labels by various entities “processing” the pallet: the supplier, forwarder, carrier, wholesaler and recipient.v
It is universally recognized that IT systems are responsible for the exchange of information between individual links of the supply chain. To operate effectively, IT systems (SCM type) need appropriate data. The optimal way of transmitting information in trade turnover is data exchange carried out electronically (via EDI). In practice, however, it is not always possible to completely automate communication allowing for obtaining information regarding the flow of goods solely electronically (in reality, such situation rarely occurs). Various SCM systems operating in subsequent links of the supply chain patiently “wait” for appropriate data, the processing of which would allow for the realization of the goods flow tracking function. The number of systems in this category is quite significant, because IT solutions supporting supply chain management appear wherever there is a need for physical handling of deliveries and issues of goods.
Therefore, why is integrating the supply chain so difficult for now? From an IT perspective, everything is fine. SCM systems installed in supply chain links work (they were purchased for this purpose after all), are equipped with functionality allowing for registering deliveries and shipments, allowing for cooperation with suppliers and recipients via EDI, enabling the use of ADC devices – so what is the problem?
The problem is that IT systems do not receive data that should reach them in parallel with the physical flow of goods. It should be remembered that EDI is still largely a virtual concept and the concept of ADC is still perceived only as a technical possibility of reading a barcode. Therefore, SCM systems are dead in their core functionality. They are not fed with data.
However, SCM systems can be revived by organizing the supply chain in such a way that data transmitted together with the logistic unit can be retrieved into the IT system at each of its links. Therefore, there is a need to place appropriate logistic information on the products themselves. And this requires the existence of an exchange standard that will be “understood” by various IT systems operating in the supply chain.
This text aims to present to readers how an integrated supply chain can be “revived” in SCM-type IT systems by using a simple, cheap and effective standard for information exchange between supply chain participants.
This problem is solved by the EAN.UCC standard logistic label, previously also called the EAN transport label. It complies with the provisions of the CEN (European Committee for Standardization) standard – EN 1573: “International transport label”. In European Union countries, this standard is obligatory for all companies participating in the implementation of public procurement contracts exceeding certain amounts.
Information on standard logistic labels is presented in two basic forms: visually readable information intended for humans, consisting of text and possible graphics, and machine-readable information intended for automatic data entry into the IT system. Barcodes serve this purpose, constituting a safe, cheap and effective method of presenting data with a specific structure. On the other hand, texts enable universal access to the presented information at any point in the supply chain where ADC techniques cannot be used.
The purpose of using the EAN.UCC standard logistic label is to transmit unambiguous and error-free information regarding the unit it is on, in machine-readable and visually readable form. The label enables the identification of every shipping unit occurring at different points and at different times throughout the supply chain and can be used for all their types, in logistic and transport applications where it is necessary to control various logistic units constituting part of the same transport batch.
To enable the automation of reading data contained on EAN.UCC standard logistic labels, it was adopted that the barcode used on it is the UCC/EAN-128 code (abbreviated as EAN-128). Data presented in this symbology are alphanumeric, which allows for encoding any alphanumeric text (basic 128 ASCII character set).
The EAN-128 code is a specially reserved variant for global use of the previously known Code 128 and these two designations should not be confused.
One can ask at this point, how does the EAN-128 code differ from others, for example from the well-known and widely used EAN-13 code and why is it more attractive? The basic difference is that the EAN-13 code is not a data carrier, it does not contain any significant information – it is only a globally unique identifier of a record in a database, in which the goods are described in detail. For basic supply chain management purposes, it is not used. On the other hand, the EAN-128 code is a carrier of specific data, including the EAN-13 code, describing various information important for supply management. A feature that fundamentally increases the attractiveness of the EAN-128 code for supply chain management purposes is the system of so-called Application Identifiers (AI) combined with the ability to combine several data pieces in one barcode symbol, with no restrictions on the amount of encoded data. The only limitation is the width of the code resulting from the technical capabilities of readers. A larger amount of data can be encoded in several lines in any order.
Each AI is a two-, three- or four-digit prefix that defines the meaning of the data following it. This feature important for the EAN-128 code, which is the use of standard AIs, enables the presentation of standard business data in a barcode in such a way that the IT system receiving the scanned character string can unambiguously and error-free interpret it into data form and place it in appropriate database fields.
Another question can be asked: why then does efficient tracking of the physical flow of logistic units in the supply chain, based on SCM IT systems installed in individual supply chain links, not proceed as it should? The answer is not straightforward – most likely this fails for several different reasons:
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either SCM IT systems do not have implemented support for global EAN.UCC system standards with full interpretation of AIs, -
or the standards are implemented, but consultants implementing SCM IT systems have not investigated this problem deeply enough, -
or in a given chain link where a logistic unit equipped with a standard EAN.UCC label arrives, it was never thought that this could be used for anything.
The logistic label standard was developed so that:
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subsequent links of the supply chain equipped with individual IT solutions could unambiguously acquire data for them, retrieved from the label placed on the logistic unit (e.g. pallet) generated by the supplier’s IT system, -
andividual SCM IT systems could generate labels with standard data describing the content of logistic units for their recipients’ IT systems.
The problem lies only, or perhaps as much as in this, that SCM IT systems operating in the supply chain are able to interpret and practically use functioning standards. The EAN.UCC logistic label is not a invention of theorists, its standard was developed by EAN International with the international cooperation of many practitioners: representatives of manufacturers, retailers, carriers and national EAN organizations.
Therefore, another question arises: how to effectively use the standard EAN.UCC logistic label?
In a situation where it is possible to use the benefits resulting from the use of EDI in the supply chain, the only mandatory field on logistic labels is the so-called Serial Shipping Container Code (SSCC). This is an identification number, globally unique for each individual logistic unit, valid until it is repacked. The SSCC number is preceded each time by the application identifier reserved for it, AI=00.
Example of an SSCC number presented in an EAN-128 barcode:
(00)059012341234567895
This is a logistic unit with the
number: 123456789 generated in company 5901234; digit 5 is
the automatically calculated check digit; digit 0 (before 590)
is used for individual purposes in company 5901234; two
digits (00) denote the AI reserved for SSCC.
The SSCC number is assigned only once – by the sender of the logistic unit, at the moment of its formation and identifies it throughout its “life”. The sender must be a participant of the EAN.UCC system, i.e. have the right to assign designations. From the moment of establishment, SSCC can be used by all partners participating in the supply chain (in their SCM IT systems).
As already mentioned, the SSCC number alone is sufficient for all logistic applications where EDI is used to transmit detailed information about logistic units. The procedure is then as follows:
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The supplier, after receiving an order from its recipient, picks the ordered goods, creating a logistic unit and marking it with a label generated by its SCM IT system, containing only the SSCC number (as in Fig. 1). -
Before the physical delivery of goods manages to be carried out, the supplier’s SCM system sends an EDI message entitled Despatch Advice. This message contains, apart from the SSCC number, also information about the shipment’s content, i.e. EAN.UCC identification numbers, the quantity of goods in each logistic unit, the final destination of the goods, etc. -
This advice is compared by the recipient’s SCM system with the previously placed order and transferred to the system database. Thanks to the fact that the EDI message significantly precedes the arrival of the delivery, the recipient can react accordingly if there are discrepancies between the ordered and received goods. They can also start selling it earlier. -
At the moment of delivery arrival, only the SSCC number is read in the warehouse ADC system.
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The recipient’s SCM system confirms the delivery (generates an EDI message entitled
Delivery Confirmation). -
The software runs the standard payment procedure and updates inventory levels.
The situation described above is the optimal solution that should be strived for. Reality, however, is definitely different. Hence, at the beginning of this text there were formulations speaking about the virtual understanding of EDI functioning in the so-called open environment, in the context of operating SCM systems.
This fact was noticed and accepted quite early by the creators of the EAN.UCC logistic label standard. Therefore, a quite extensive table of AIs was developed, by means of which those SCM IT systems that do not use EDI can exchange business data obtained from the label placed on the logistic unit:
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either through manual entry of visually read data, -
or through ADC techniques (machine reading of barcodes).
Practice shows that only those data that can be sensibly used in the supply chain are generally placed on the logistic label. This is implemented in such a way that cooperating companies (neighboring links of the chain) exchange information about the need to place relevant data on the label and in most cases this is accepted. If not, it results either from a lack of sufficient knowledge or a lack of conviction that it can function this way.
As many additional supplier information as necessary can be placed on the logistic label. These can be data such as: product number, its quantity, variant, packing date, production date, maximum shelf life, minimum shelf life, batch number, serial number, logistic dimensions, etc.
The standard provides that the graphic layout on the EAN.UCC logistic label can be arbitrary, but it is recommended that data be presented in three information groups:
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company identification information in any format, -
substantive information interpreted classically, -
substantive information interpreted by the barcode.
An important feature of the EAN-128 code is that the number and length of barcode symbols can be minimized by using their combination capability. The order of data elements presented in the barcode is not important for their interpretation, the entire symbol is scanned and the software selects those AIs that are relevant at the given moment, ignoring the rest and not caring about the reading order.
The basic information signaled above about the EAN-128 barcode and its interpretation for supply chain management purposes is important for persons responsible for the technical sphere related to printing and reading codes and designing SCM IT systems. This is an extremely important issue, because an unprofessional approach to this problem causes turbulence in the supply chain and is the primary reason for failures in the effective use of SCM systems.
Speaking of identification standards in supply chain management systems, it is impossible not to mention one more identifier, which is still not commonly used and whose critical importance is obvious. Its non-existence in common use probably results, as in the previous case, from a lack of basic knowledge about it among animators of IT dedicated to logistics. This identifier is the Global Location Number – GLN, by means of which it is possible to uniquely identify each enterprise and place in this enterprise globally with the accuracy needed in a given place (plant, gate, warehouse, rack, rack bay, etc.). The GLN identifier should also be successfully used in global supply chains, but this is a topic for a completely different article.
Prepared based on Computerworld No. 18/2002.