Industry standards, barcodes and how to comply…
Date: February 19, 2020
The world of supply-chain standards can be confusing. But with a little help from our engagement manager, Lorna Leaver, we try to debunk your most common standards, barcode and compliance questions
Are you a buyer? A merchandiser? A supply-chain manager? A sales assistant? – in fact just about anyone working in retail will be affected.
In the world of supply-chain standards, it is easy to be confused about what you should and shouldn’t do. Trying to craft a single way of working for all businesses is not easy and it is not always possible. But trying to do exactly that is the main role for us here at GS1.
When we talk about supply-chain standards, we mean the journey that the product takes from creation, to sale – including listing and entering product data online – to reaching the customer and back again, if returns take place.
As a membership community, we get a lot of questions from new members trying to grapple with these strange new processes. So, to help give you a head start, we wanted to clarify some of our most frequently asked questions. You might be surprised that the reach and effect of the humble barcode goes a lot further than you think.
Does everyone use barcodes?
GS1 has more than 2m member businesses around the world. Having been around for 40 years and more, the barcode is so embedded in modern life that the majority of retailers, both online and offline, require a unique product identifier from GS1 as standard.
These numbers are sometimes known by their old names of European Article Number (EAN) or Universal Product Code (UPC), but they are all collectively known as Global Trade Item Numbers, or GTINs. We liken the GTIN to a passport number for products – it enables goods to be traded with anyone, anywhere in the world.
Every household name you can think of will ask you for a GS1 GTIN in order to trade with them – Amazon, Zalando, Fruugo, John Lewis, Tesco etc, and even outside of retail in the world of healthcare. To sell into the NHS, you need GS1 GTINs.
Does the barcode number mean anything?
Yes, it does. The number can tell you the country where a product was registered – although this should not be confused with where it was manufactured. It can also tell you which company a product is registered to and if the algorithm has been executed properly.
What does the barcode actually enable?
To put it simply, it is a “key” that unlocks information associated with the items you are enquiring about. The best example of this is scanning a product at a checkout to check a retailer’s database for the price of that product, in order to sell it to the consumer.
Why do I need barcodes if I only sell online? I thought you only needed a barcode for scanning in store
When done correctly, the identification of the product should be the same wherever it goes, irrespective of whether a product is sold online, offline or across different retail channels.
Even in e-commerce, there have to be clearly delineated supply chains to get the product from A to B, whether that is seller fulfilled or via a third party. This “key” is how it is done.
Do you just do barcodes for products?
No, although most people believe this is the case. We are able to provide industry standards for the whole supply chain, both online and offline.
GS1 is all about making it possible to identify anything, capture the information about it and share it with anyone that needs to know.
Are there rules for allocating barcodes to products?
The short answer is yes. A GTIN should be applied at the base-unit level, sometimes called a child or SKU level.
However, once the product is on sale, it will naturally undergo product development changes. These changes need to be managed so that any affected parties can tell the difference between different versions of the same product.
For example, if you decrease the size of a chocolate bar by 30 per cent to comply with the sugar tax, that chocolate bar will need a new GTIN.
To keep it simple, we have three guiding principles – if a consumer, regulation or supply chain is affected by the changes to a product, then it needs a new GTIN.
Can I use the same product number anywhere in the world?
If we are talking about the unique number underneath a barcode, then yes you can – that is the beauty of a global standard.
There are still a small number of retailers that have yet to upgrade their systems to hold a 13-digit GTIN, and, therefore, require a 12-digit UPC. However, you should speak to us directly to double check if a 12-digit UPC is actually needed before you license these numbers.
It’s the barcode images that you need to be more cautious with, as this will depend on what the use is.
I’ve seen barcode numbers for sale online, are they legitimate?
If you find a barcode number online and it is not linked to GS1, they will sit outside of the globally maintained GS1 System. This means we cannot guarantee the uniqueness of the number, which can result in clashes with other products in a retailer’s database.
This can have consequences for both putting products on sale, and what a customer sees and receives. In addition, these stray barcodes will not be registered to your company, but the original licensee instead. None of this is good for business.
Is there legislation in place that requires sellers to have barcodes on their products?
Here in the UK, it is voluntary to use B2B standards – and the barcode is just one of these. However, in some countries, it is part of government legislation. For example, in China, a manufacturer is required to use a GS1 GTIN for any products sold domestically. In Brazil, manufacturers are required to use GS1 GTINs on their invoices to enable the government to validate tax and import charges.
Can I reuse my numbers?
GTIN reuse ended on 31 December 2018. This was due to the rise of e-commerce, which has meant that products now stay around for a lot longer than the manufacturer is producing them for.
Think about eBay and all the other C2C platforms you can sell on. If you reuse the same numbers over and over again, eventually there will be number clashes resulting in a poor experience for both you and your customers.
For other forms of identification, like Serial Shipping Container Codes, which are used for tracking cartons and pallets, reuse can begin a year after issuance, since they are not usually retained.