ECRx BARCODING IMPLEMENTATION

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ECRx BARCODINGIMPLEMENTATION

• Frank Goodman

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COMMITTEE STRUCTURE
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Barcoding Subcommittee Members

• Frank Goodman (Chair)
• Maryann Crofoot - AltiMed Pharmaceutical
• Alicia Duval - CACDS
• Ratna Jani - ECCC
• Andree Soucy - Jean Coutu
• Heather Smeall - Procter Gamble
• Roman Coba - Wal-Mart
• Selim Toutounji - Wyeth-Ayerst

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Committee Mandate

• Build on work done by the ECR Committee, applying
  the concepts to Rx, OTC and cosmetics
• Agree on standards for UPC and barcodes for item
  and case coding
• Agree on target timelines for the drug channel
• Suggest use of UPC number universally -
  catalogues, price lists, tender documents, etc.

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Progress in drug channel (UPCs)

• OTCs and cosmetics are largely compliant
• Sold in mass market and food channels
• Rx - progress is being made
• Compliance is improving
• Over 87 of manufacturers are at least 40
  compliant
• Product is working its way through the supply
  chain

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Panel Members

• Ratna Jani
• Director, Industry Relations and Administration
• Electronic Commerce Council of Canada
• Heather Smeall
• Efficient Consumer Response Manager
• Procter Gamble Inc.
• Bill McDowell
• Director, Supply Chain Technology
• Loblaw Companies Ltd.

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ECR Barcoding ImplementationA grocery
perspective
Bill McDowell
September 1998
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Grocery ECR Today
ECR CANADA

• The CEO Steering Committee was formed 5 years
  ago. This committee identified five Enablers
  that would help companies resolve inefficient
  business practices.
• Scan data Integrity
• Electronic Data Interchange (EDI)
• Continuous Replenishment
• Value Chain Analysis (VCA) and Activity-Based
  Costing (ABC)
• Category Management

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Grocery ECR Today
Progress

• We at Loblaws have taken up the challenge and are
  moving forward. Some issues require an industry
  direction, and this has happened in several
  areas.
• Scan data Integrity
• Item barcodes are mandatory, and new items must
  be certified as scannable.
• Case barcodes are required and are being
  implemented.
• UPCs are mandatory.
• Electronic Data Interchange (EDI)
• The industry has adopted the VICS 4010 standard.

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ECR in Pharmacy
Progress

• As a result, we have achieved efficiencies in
  inventory management and replenishment for
  grocery and most Health and Beauty products. It
  is also true for OTC products such as generic
  drugs, vitamins and so on.
• Benefits
• Automated ordering and inventory management
• Automated dated product management
• Simpler distribution handling processes, less
  labour and higher accuracy, reduced distribution
  costs.
• Reduced retail labour for receiving, handling,
  sales.

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ECR in Pharmacy
Implications for Pharmacy

• 1 Case barcodes
• Because of grocery industry efforts, case
  barcodes are becoming common, including expiry
  date on perishable products.
• Therefore
• There is an opportunity for the drug industry to
  gain distribution efficiencies by adopting case
  barcodes.
• There is a similar opportunity at retail on case
  sales (e.g. infant formula).
• N.B. The largest issue here is the quality of the
  barcode printing.

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ECR in Pharmacy
Implications for Pharmacy

• 2 Unit barcodes
• In the grocery industry, new products are now
  expected to have a certificate of scanability
  before being listed. This means the barcode has
  been reviewed for clarity, contrast and
  dimensions.
• Therefore
• Front-end scanning accuracy is 99.
• Data integrity is greatly increased while
  front-end labour has been reduced.

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ECR in Pharmacy
Implications for Pharmacy

• 3 UPC codes
• Every manufacturer has an internal product
  numbering system. Such numbers cannot be used by
  your customers for automated inventory management
  or ordering. Duplicate numbers will occur.
• Therefore
• As retailers move to automated inventory systems,
  products which are easy to handle and order will
  be preferred over competitive products.

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ECR in Pharmacy
Retail directions for barcodes

• By having UPCs, unit and case barcodes, the
  retailer gains several opportunities.
• Automated systems for inventory and ordering.
• Efficient receiving and handling of units and
  cases.
• Dated product management.
• Better data for category management.

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ECR in Pharmacy
Current Challenges

• However, there are some issues with some
  prescription drug products and manufacturers.
• The lack of UPCs and barcodes.
• The solution
• A unified Industry position
• Consistent, unified industry pressure.

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ECRx BAR CODING IMPLEMENTATION

• MANUFACTURERS PERSPECTIVE
• PROCTER GAMBLE
• Sept. 24/98

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ECRx Bar Coding Implementation

• Costs and benefits
• Usage in the supply chain
• Database management and UPC set up
• Challenges and opportunities

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ECRx Bar Coding Implementation Usage in the
Supply Chain

• Standardized data management and business
  analysis
• Category Management/Efficient Assortment
• EDI Ordering and Invoicing
• ASN/UCC128 and cross docking/flow-thru
• Warehouse handling real time RF processes

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ECRx Bar Coding Implementation
Costs

• Vendor code
• Packaging artwork changes
• Application of UPC, case and pallet codes
• Codes administration
• Validation certificates
• Integration of bar code scanning capability
  throughout the supply chain

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ECRx Bar Coding Implementation
Benefits when fully integrated

• Inventory accuracy improvements
• Reduced inventory
• Productivity improvements
• Enables ASN/UCC128 which results in reduced
  unloading times, reduced deductions/ refusals,
  internal cross dock
• Leads to reduced damage levels

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ECRx Bar Coding ImplementationDatabase
Management and Set up

• Purchase a vendor code purchase
• Assign a central administrator
• Define the process for requesting and assigning
  UPC codes
• Expand product data base to include UPC code
  (including vendor code)
• Randomly assign codes as requested
• Follow ECCC UPC guidelines

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ECRx Bar Coding Implementation Challenges and
Opportunities

• small items
• zero suppressed codes
• scan accuracy
• lack of use/critical mass
• change management

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ECRx Standards for Product Identification and
Barcoding

• Ratna Jani
• Director, Industry Relations Admin
• ECCC

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Agenda At-A-Glance

• About ECCC
• Globalization of Product I.D
• Standardization Issues
• Future trends
• Available resources

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Electronic Commerce Council Mission Statement
The Mission of ECCC is to take a Leadership Role
in Establishing and Promoting Multi-Industry
Standards for Product Identification and related
Electronic Commerce Communications
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ECCCs Role in Product Identification

• Accurate assignment of U.P.C. Manufacturer I.D.
  numbers
• Maintain data base of assigned numbers
• Provide education on standards to all industries
• Industry Specific Workshops
• Customized Sessions to meet individual needs
• Developing an Electronic Product Catalogue
• ECCC Net

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Developing Global partnership through Global
Policy Committee
The UCC /EAN System Provides an Integrated Suite
of Standardized Tools that Enable Effective
Management of Supply Chains

• In Any Company
• In Any Industry
• Anywhere in the World

IDENTIFICATION CODES
BAR CODES
SUPPLY
CHAIN
MANAGEMENT
ELECTRONIC DATA INTERCHANGE
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U.P.C. standards are globally compatible and
harmonized

• Uniform Code Council (UCC) and International
  Article Numbering Association (EAN) establish the
  standards jointly
• Canada adopts the established standards
• The standards are endorsed by ISO and IEC

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Standards vs Guidelines

• Standards are established by the American
  National Standards in the U.S. and adopted by the
  UCC and ECCC
• Standards undergo a six year review process and
  cannot be changed.
• Guidelines are established based on the business
  needs and within the confines of the standards.

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Inconsistencies identified in standards
application

• Lack of understanding the standards
• Ignorance to compliance factors
• Poor quality compliance
• Technology unable to meet the symbol quality
  demands
• Internal resources lacked expertise
• Lack of information integrity
• Data unusable to monitor industry performance

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Product identification codes serve as keys to
information

• Unlock information about the manufacturer, item,
  description, price
• This supports the many-to-many relationship
  between buyers and suppliers
• Ability to track products from manufacturing to
  delivery in any industry, market sector, or
  geographic region

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Why Standard Product Identification?

• One number used to reference the item by all
  members of the supply chain
• No more storing proprietary numbers
• No more cross referencing
• What you see is what you get

BROKER
MFCTR
Same
RTLR
DIST.
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Global migration to an expanded number structure

• Need identified to increase number capacity to
  fulfill rate of growth
• New industry sectors coming on board
• Unlimited use of application
• Returnable asset number
• Individual asset number
• Location number
• Service relation number

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14 Digit Global Structure Data base alignment
14 13 12 11 10 9 8 7 6
5 4 3 2 1
C
N3
N4
N5
N6
N7
N8
N9
N10
N11
N12
U.P.C.
N2
0
0
N2
N3
N5
N11
N12
C
N4
N1
N6
N7
N8
N9
N10
0
EAN-13
N9
N11
N12
C
PI
N1
N2
N3
N4
N5
N6
N7
N8
N10
SCC-14
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U.P.C. Version A is a 12-Digit number
ASSIGNED BY ECCC
CONTROLLED BY MANUFACTURER
7 71234 10001 8
NUMBER SYSTEM CHARACTER
ITEM NUMBER
MANUFACTURER ID NUMBER
CHECK DIGIT
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Number System Characters

• 0,6,7 Regular U.P.C. coded products
• 2 Random weight products (meat, produce,
• cheese, fish)
• 3 National Drug Codes or National Health
• Related Items (US only)
• 4 Used for in-store marking
• 5 For use on Coupons
• 1,8,9 Reserved for future assignment by UCC

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Manufacturer Identification Code

• Normally one Manufacturer ID number is assigned
  per company
• Company may request separate IDs for divisions
• Company may request more than one ID if company
  manufacturers more than 100,000 products

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Item Numbering

• Item code is a 5 digit number
• 100,000 item numbers allowed ranging from 00000
  to 99999 per Manufacturer ID
• Each product variation must have its own unique
  item code (flavor, weight, quantity)
• Maintain a record of all the item numbers to
  avoid duplication

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U.P.C. Item Number Changes Guideline 27

• A weight or count change in a product requires a
  new U.P.C. item number
• Minor formulation, packaging or graphics changes
  replacing an existing product do not require
  change in item number
• Provide a minimum of 30 day advance notice to
  your trading partner
• A U.P.C. should not be reused for 4 years after
  the last shipment

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Maintaining Print Quality

• U.P.C. Symbol must be tested and verified at each
  stage of production
• Design
• Artwork and film production
• Print
• Final filled package must be submitted to a 3rd
  party validation company to provide a conformity
  report

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Overall improvement in Quality compliance per
1000 evaluations

• May 1996
• Overall Pass 659
• Overall Fail 341
• OVERALL POS test 1st pass scan rate 91.1

• January 1998
• Overall Pass 791
• Overall Fail 209
• OVERALL POS test
• 1st pass scan rate
• 98.8

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Reasons for failures

• Overall Fails out of 1000
• May 1996 January 1998
• Truncation 22 13.1
• ANSI grade 16 8.5
• Location 1.3 0.2
• Modulo check 2.6 1.8
• Margins 9.3 1.7
• Encodation 2.7 0.6
• Database 0.8 1.6
• Magnification 6.0 2.1

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Truncation Reduces The Scannability of a U.P.C
LASER BEAM
LASER BEAM
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Example of a truncated symbol
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Truncation is prohibited except for small items

• Small packaging exemptions apply to
• Products that contain too much regulatory
• requirements
• Products that do not have a panel for an 80
  full height symbol
• Uniquely shaped products

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Exemption applies to small packaging
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Exemption applies to small packaging
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Exemption applies to small packaging
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U.P.C. symbol quality plays a significant role in
item management

• Goal is to maintain a 99 accuracy scan rate.
• Scan rate allows the monitoring of product
  movement and category management
• Validate the U.P.C. Symbol for quality compliance

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SCC-14 is created from the item
ITEM U.P.C.
012345 67890
C
012345 67890
P 0
C
SCC-14
CHECK DIGIT
FILLER ZERO
ITEM
PACKAGING INDICATOR
SUPPLIER ID.
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SYMBOL LOCATION
(NOT TO SCALE)
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Two adjacent sides preferred
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ITEM U.P.C OR EAN
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Macro view of Industry Trendsand Impact
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UCC developed a new solution for small packaging

• Solution will
• allow identification of extremely difficult to
  handle products of vials, syringes, blister
  packs and ampoules
• supplement the current barcode symbology
• be scannable with current equipment available and
  printable
• be globally compatible
• allows encodation of primary and secondary data
• Allows encodation of 56 - 200 characters within
  an inch square
• meet the needs for Random weight products,
  Electronic, Healthcare

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New terms for the solutions are

• The Reduced Space Symbol (RSS)
• The Composite Symbol

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Reduced space symbology (RSS)

• Composite symbol
• Variant of Micro PDF417
• EAN-13 symbol encoding expiration date and lot
  number
• (17)971028
• (10)1234567890ABCD123456

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New Composite Symbol
2D
RSS-14 .95 long
RSS-14 Limited .74 long
LINEAR
RSS-14 Stacked .57 long
1 inch
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Small item marking solution
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Keeping abreast on trends

• Standards manuals
• U.P.C. Implementation guideline
• Application standards for shipping containers
• Through ECCC knowledge network
• EDI and Product ID Standards
• Education Programs
• Industry Supply Chain Updates
• UCC/EAN Activities

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ECCC Can be reached at

• Call 1-800-567-7084
• Web site address www.eccc.org
• ECRx site www.eccc.org/ecrx/
• E-mail RatnaJ_at_eccc.org