Item-level coding to help retailers improve ring accuracy
Item-level coding to help retailers improve ring accuracy
HOUSTON -- The same error is made in virtually every supermarket, every day of the year, by almost every checker. A loose apple, tomato or onion is scanned at the wrong price. The harried checker sees a Royal Gala coming at her and because she is familiar with the price lookup number for the more popular, and less expensive, Red Delicious apple, that's what she uses while weighing the apple. Or maybe it's an organic orange that gets weighed as a conventional one. Or cluster tomatoes that get mistaken for medium round.
That could all change if the latest scan technology -- the data bar -- becomes as ubiquitous on random-weight fresh produce items as its cousin, the UPC label, is on packaged produce items.
When the produce industry adopted the UPC, the PLU for random-weight items soon followed. It was a much-improved system over the previous guesswork that checkers had to engage in. With a PLU number, checkers could quickly put the product on the scale, punch in the code and have the price appear.
The PLU system has worked very well and no doubt eliminated hundreds of errors a day in supermarkets all over America.
But errors still exist, and a seminar during the Produce Marketing Association's Fresh Summit International Convention &_Exhibition, held here Oct. 12-15, explored "The Revolution of Item-Level Coding."
Tim Gagnon, director of business development for C.H. Robinson Worldwide Inc., began the discussion by giving the audience a thumbnail sketch of the new technology. The data bar is a truncated version of a UPC. It is basically a 14-digit code that contains a Global Trade Item Number. The GTIN utilizes the first nine slots for the five- to nine-character company prefix that is specific to each. The last five digits of the data bar contain the item reference number.
So just as a UPC contains specific information, so does the data bar. The beauty of it is that its smaller size can fit on a typical fruit sticker.
Wal-Mart has been experimenting with the data bar for the past year, rolling it out one produce item at a time. Merchandise Manager Michael Agostini said that the company started with apples and has a three-year plan that includes each of its produce items. Mr. Agostini said the company has prioritized the items based on ease of entry into this new system.
He acknowledged that for some random-weight items, such as green beans, there are not yet ready answers to how a sticker can work. Those items, he said, have been scheduled for the end of the three-year period, at which point he hopes innovative solutions will have surfaced.
But for the time being, the Wal-Mart executive said, testing shows that this system holds great promise for everyone and urged other shippers and retailers to get involved. He said the faster this system is adopted, the more benefits can be derived by all facets of the industry.
Mr. Gagnon said there are benefits for everyone, including the consumer. The main benefit to consumers is that they will be accurately charged for the items they buy and checkout should be quicker, once the system is widespread and checkers learn how to use it. Retailers can profit from those same two advantages and will also be able to tap into much more information about the products they sell.
The data garnered from scanning all produce items will allow shippers to accurately know what they are selling and be able to compare suppliers of the same product. Today the PLU system lumps all suppliers of the same product together. That is also one of the challenges of this new system as there does need to be some new data input at retail so that a retailer can track sales of all these produce items by vendor.
Once that happens, the vendor can also benefit by having much more information for category management programs. A vendor will be able to know if his items are moving better or worse than a competitor's, and how his shrink compares with competitors.
Because Wal-Mart is rolling out this new system deliberately, it has been able to compare stores and distribution centers that are using the data bar with those that aren't. The company always knew that it sold more Red Delicious apples than it orders so it knew that something wasn't right. Now it has been able to compare stores against each other, and Mr. Agostini said the error rate is significant.
One of the suppliers that is currently testing the data bar is Dole Fresh Fruit Co. Market Research Director David Bright shared his insights as part of the panel on the subject. Dole is excited about the data that can be used, but the company also likes the traceability aspect of the data bar.
Today, most bulk produce items lose their shipper identity once they are taken out of the carton and displayed at retail.
Mr. Bright said that by stickering each piece of fruit with a data bar, the product retains the connection to the shipper. This is very important in today's enhanced food-safety environment. Unfortunately, product contamination is a fact of life. A data bar on suspect fruit can pinpoint the source and limit the size of a recall.
Mr. Agostini discussed a real food-safety issue that occurred last year in which a data bar code could have proved very valuable.
He said there was a melon recall because of salmonella contamination that was limited to one shipper. On a national level, Wal-Mart knew it did not buy any melons from that shipper. However, the retailer has a program that allows its various distribution centers to buy off the local markets to fill in supply gaps. The company could not guarantee to its own satisfaction that none of the suspect melons were in its pipeline. If all the melons the company sold had been stickered with a data bar, the Wal-Mart executive said, it would have been a simple task to check the company's database to see if it sold any of those melons.
Mr. Bright said that this current data bar has 14 digits but the technology exists to expand that number and offer much more detailed traceback opportunities for the industry.
Kelly Kirschner, senior marketing manager for Sinclair Systems International LLC, one of the industry's larger suppliers of stickering systems, said that the concept is catching on in the United States and abroad.
She said that in June 2006, Sinclair was providing data bar encoded stickers for 17 different companies. By September of this year, 95 different companies worldwide were utilizing the new data bar on at least one item, she said.
Besides Wal-Mart, Loblaws in Canada, Kroger in the United States and Tesco in the United Kingdom are experimenting with the idea, according to Ms. Kirschner.
That could all change if the latest scan technology -- the data bar -- becomes as ubiquitous on random-weight fresh produce items as its cousin, the UPC label, is on packaged produce items.
When the produce industry adopted the UPC, the PLU for random-weight items soon followed. It was a much-improved system over the previous guesswork that checkers had to engage in. With a PLU number, checkers could quickly put the product on the scale, punch in the code and have the price appear.
The PLU system has worked very well and no doubt eliminated hundreds of errors a day in supermarkets all over America.
But errors still exist, and a seminar during the Produce Marketing Association's Fresh Summit International Convention &_Exhibition, held here Oct. 12-15, explored "The Revolution of Item-Level Coding."
Tim Gagnon, director of business development for C.H. Robinson Worldwide Inc., began the discussion by giving the audience a thumbnail sketch of the new technology. The data bar is a truncated version of a UPC. It is basically a 14-digit code that contains a Global Trade Item Number. The GTIN utilizes the first nine slots for the five- to nine-character company prefix that is specific to each. The last five digits of the data bar contain the item reference number.
So just as a UPC contains specific information, so does the data bar. The beauty of it is that its smaller size can fit on a typical fruit sticker.
Wal-Mart has been experimenting with the data bar for the past year, rolling it out one produce item at a time. Merchandise Manager Michael Agostini said that the company started with apples and has a three-year plan that includes each of its produce items. Mr. Agostini said the company has prioritized the items based on ease of entry into this new system.
He acknowledged that for some random-weight items, such as green beans, there are not yet ready answers to how a sticker can work. Those items, he said, have been scheduled for the end of the three-year period, at which point he hopes innovative solutions will have surfaced.
But for the time being, the Wal-Mart executive said, testing shows that this system holds great promise for everyone and urged other shippers and retailers to get involved. He said the faster this system is adopted, the more benefits can be derived by all facets of the industry.
Mr. Gagnon said there are benefits for everyone, including the consumer. The main benefit to consumers is that they will be accurately charged for the items they buy and checkout should be quicker, once the system is widespread and checkers learn how to use it. Retailers can profit from those same two advantages and will also be able to tap into much more information about the products they sell.
The data garnered from scanning all produce items will allow shippers to accurately know what they are selling and be able to compare suppliers of the same product. Today the PLU system lumps all suppliers of the same product together. That is also one of the challenges of this new system as there does need to be some new data input at retail so that a retailer can track sales of all these produce items by vendor.
Once that happens, the vendor can also benefit by having much more information for category management programs. A vendor will be able to know if his items are moving better or worse than a competitor's, and how his shrink compares with competitors.
Because Wal-Mart is rolling out this new system deliberately, it has been able to compare stores and distribution centers that are using the data bar with those that aren't. The company always knew that it sold more Red Delicious apples than it orders so it knew that something wasn't right. Now it has been able to compare stores against each other, and Mr. Agostini said the error rate is significant.
One of the suppliers that is currently testing the data bar is Dole Fresh Fruit Co. Market Research Director David Bright shared his insights as part of the panel on the subject. Dole is excited about the data that can be used, but the company also likes the traceability aspect of the data bar.
Today, most bulk produce items lose their shipper identity once they are taken out of the carton and displayed at retail.
Mr. Bright said that by stickering each piece of fruit with a data bar, the product retains the connection to the shipper. This is very important in today's enhanced food-safety environment. Unfortunately, product contamination is a fact of life. A data bar on suspect fruit can pinpoint the source and limit the size of a recall.
Mr. Agostini discussed a real food-safety issue that occurred last year in which a data bar code could have proved very valuable.
He said there was a melon recall because of salmonella contamination that was limited to one shipper. On a national level, Wal-Mart knew it did not buy any melons from that shipper. However, the retailer has a program that allows its various distribution centers to buy off the local markets to fill in supply gaps. The company could not guarantee to its own satisfaction that none of the suspect melons were in its pipeline. If all the melons the company sold had been stickered with a data bar, the Wal-Mart executive said, it would have been a simple task to check the company's database to see if it sold any of those melons.
Mr. Bright said that this current data bar has 14 digits but the technology exists to expand that number and offer much more detailed traceback opportunities for the industry.
Kelly Kirschner, senior marketing manager for Sinclair Systems International LLC, one of the industry's larger suppliers of stickering systems, said that the concept is catching on in the United States and abroad.
She said that in June 2006, Sinclair was providing data bar encoded stickers for 17 different companies. By September of this year, 95 different companies worldwide were utilizing the new data bar on at least one item, she said.
Besides Wal-Mart, Loblaws in Canada, Kroger in the United States and Tesco in the United Kingdom are experimenting with the idea, according to Ms. Kirschner.
