Scantastic Bar-Code Tracking Tools

Who knew that a day at the beach could result in a tool that revolutionized the world—and is now essential to supply chain management?

N. Joseph Woodland originated the idea of the bar code in 1949, drawing lines in the sand with his fingers. Based on his study of Morse code as a Boy Scout, Woodland’s first version was a circular design, which he and a partner patented in 1952. They eventually sold the patent for this bull’s-eye design to radio, television, and battery company Philco for $15,000—the only profit the pair ever made from their invention.

Over time, laser-scanning technology and the advent of the microprocessor made bar codes viable. In the early 1970s, IBM’s George Laurer designed the familiar black-and-white rectangle based on Woodland’s model—with considerable input from Woodland, who also worked at IBM.

In 1973, the U.S. grocery industry implemented bar codes, in the form of the Universal Product Code (UPC), to help speed grocery checkout lines. GS1—a not-for-profit organization with global headquarters in Brussels, Belgium, and a U.S. branch, GS1 US, headquartered in Lawrenceville, N.J.—became the administrator of the UPC bar code, and instituted a global standardized numbering system for UPC bar codes.

From its humble beginnings—when the first bar code on a pack of Wrigley’s gum was scanned at an Ohio grocery store—to today, the bar code has become an instantly recognizable symbol, and an essential tool for businesses and consumers alike.

Linking Two Worlds

It’s hard to imagine modern supply chains and global business functioning without the bar code and its related technologies. They connect the physical with the digital world, and link supply chain players together.

"Supply chains are significantly more complex than they were four decades ago," observes Bernie Hogan, senior vice president, emerging capabilities and industries, GS1 US. "Many more intermediaries and players—manufacturers, assemblers, packagers, transportation and logistics organizations, and consumers—are involved. Managing that interoperability and scale is critical."

To accomplish this task, the amount and types of data bar codes contain has increased exponentially over the years. Bar codes have evolved from a simple one-dimensional linear design technology to include matrix two-dimensional bar codes and QR codes. The more sophisticated iterations carry vast amounts of information that businesses and consumers depend on and use daily.

Bar-code adoption has not only accelerated supply chain velocity, it has also stripped out extra handling and, as a result, costs.

"In the past, many vendors in Asia couldn’t provide bar codes," recalls Sally Miller, vice president of IT Americas for third-party logistics provider Exel, based in Westerville, Ohio. "Cartons had to be sent to a consolidation center where workers applied bar codes before the shipments left the country. That added time and cost to the equation."

Bar codes have given companies the ability to track goods at the pallet, case, and item level from point of origin to consumer. They have also enabled mechanization within distribution centers—allowing conveyor systems and robots to apply logic based on the carton moving past a scanner, and sort and process the goods at high speed. These same systems also prevent and catch errors and exceptions—stopping problems before they get out the door.

The technology also allows a level of supply chain agility never before possible. Atlanta-based expedited carrier UPS provides a Delivery Intercept capability, for example.

"Using the automated UPS shipping or tracking system, shippers can interrupt a package before it is delivered, then return, redirect, or hold the shipment," explains Keith Kellison, vice president, UPS Corporate Public Affairs. "This gives shippers and receivers greater flexibility in managing their shipments."

Syncing Up

While bar codes have transformed commerce, how entities communicate and share data across the extended supply chain still needs improvement. One of the biggest issues is synchronizing the data used to identify products and communicate their status and location.

Creating a common data lexicon—i.e., universally accepted and synchronized methods for identifying products and locations, and exchanging data—could improve these processes.

"Most companies have a database of information about the products they make, sell, or buy," says Hogan. These databases serve as a catalog customers can use to place orders. Difficulties occur when one company needs to change information or add a new item to its database. Suddenly, the catalog isn’t up to date anymore.

That’s where standards come in, making it possible for companies to speak the same language and connect with each other by identifying, capturing, and sharing information about products, business locations, and more—across all channels and countries. Without these global standards, the solutions that emerge could create inaccurate data, supply chain inefficiency, and marketplace confusion.

"As an industry, we need to put more work into making sure standards are well-adopted throughout our business networks," noted José Lopez, executive vice president, operations and global business excellence, at global food company Nestlé, in a commentary on the topic.

A Common Language

One such standards effort is the Global Data Synchronization Network (GDSN), managed by GS1. GDSN is an Internet-based, interconnected network of interoperable data pools, and a global registry that enables companies to exchange standardized and synchronized supply chain data with their trading partners using a standardized Global Product Classification (GPC).

GPC provides trading partners with a common language for grouping products in the same way. It ensures products are classified correctly and uniformly, everywhere in the world. GPC is the mandatory classification system for the GS1 GDSN.

As GDSN becomes more mature and populated with data, it can act as a central location and clearinghouse for collaboration and information.

The Compass Group North America—a Charlotte, N.C.-based contract food service company that manages restaurants inside museums, corporate headquarters, and other institutions—is using GDSN to help address food and customer safety issues.

"Our chefs create menus, then we provide Web-based tools that streamline the ordering process," says Jennifer Ignacio, nutrition communications manager at Compass. "If the data were complete, our chefs could look up an item, review its ingredients, and click on a link to supplier data.

"Right now, however, we have many different systems to gather this data," she continues. "A one-stop-shop would be a huge win, especially for tracking allergens and food safety issues."

Widespread participation in GDSN is still evolving. For Compass, the GDSN data set is far from complete.

"It’s a challenge to get all vendors and suppliers to provide information on their items," Ignacio says. She estimates that about 250 of the company’s suppliers are sending data to GDSN.

"But of the items we receive, less than 20 percent include allergen information, and only 25 percent include nutrient information," she notes. "It’s important to provide clear information so our customers can make informed choices about what they eat, and avoid allergens."

The amount of information generated and collected in the supply chain has grown quickly in recent years—and is about to explode further as several key regulatory requirements go into effect. Developing strategies for managing and capitalizing on big data is high on everyone’s hot topics list.

"We are being overwhelmed with data," Miller says. "The type and volume of information our customers are able to send us electronically continues to increase.

"For example, we’re getting a lot more information such as manufacturing date, and lot, serial, and case numbers," she notes. "Our customers’ traceability rules now require this information, so our capability for capturing, storing, and managing this explosion of data has to keep pace, and become far more robust.

"Parcel carriers are also driving new bar-code data requirements," she adds. "They continue to upgrade and increase the data available from shipping labels, and it’s a continuous challenge on our part to stay compliant as they issue new rules."

Putting Food Safety on the Menu

In the United States, two industry sectors in particular are undergoing major change when it comes to tracking product—food and pharmaceuticals/medical devices. In both cases, new regulations that arose as a result of threats to human health and life are significantly expanding tracking requirements across the supply chain.

In the most sweeping reform of U.S. food safety laws in more than 70 years, President Obama signed the U.S. Food and Drug Administration’s (FDA) Food Safety Modernization Act (FSMA) into law on Jan. 4, 2011. Its goal is ensuring the U.S. food supply is safe by shifting the focus from responding to contamination to preventing it.

Foodborne diseases cause illness in 48 million people—one in six Americans—as well as 128,000 hospitalizations and 3,000 deaths annually, according to recent data from the U.S. Centers for Disease Control and Prevention.

FSMA requires that all companies in food supply chains be able to trace foods back to the point of origin—whether domestic or global. It covers several key areas that carry far-reaching implications for managing the food supply chain:

• Mandatory recalls. FSMA provides the FDA authority to issue mandatory recalls when companies fail to voluntarily recall unsafe food after being asked to by the FDA. To recall food, companies must track all data attached to that food—including origin (even back to the farm), movement through processing and the supply chain, and delivery.
• Product tracing. FSMA also carries an enhanced product-tracing component. It directs the FDA to establish a system that will enhance its ability to track and trace both domestic and imported foods.
• Enhanced recordkeeping for high-risk foods. The FDA will establish new rules that increase recordkeeping requirements for facilities that manufacture, process, pack, or hold foods designated as high-risk.

All these regulations rely on accurate data capture and tracking via bar-coding systems. Unique product data is often lost in manual operations as pallets are broken apart and cases become indistinguishable from one another. If this information is lost at the case-pick level, the ability to trace contaminated product back to its origins is also lost.

A Healthy Medical Supply Chain

Like the food sector, the healthcare and life sciences industry is seeing new federal and state regulations for tracking and tracing products across the supply chain to final usage by the patient, medical professional, or consumer.

The 2012 FDA Safety and Innovation Act (FDASIA), the 2010 Patient Protection and Affordable Care Act, the FDA’s proposed Unique Device Identification (UDI) rule, and product serialization and e-pedigree requirements all elevate inventory management, authentication, and track-and-trace capabilities within supply chains.

Consider pharmaceutical e-pedigree requirements. Counterfeit pharmaceuticals are a huge and even life-threatening problem worldwide. Looking to thwart the flow of counterfeit drugs, the United States and many other countries are implementing e-pedigree and serialization regulations designed to track the provenance of medicines and their components/ingredients.

In the United States, these regulations exist on the state level, with California, Florida, and Maryland leading the way. The California law, which appears to be setting the standard for other states, requires e-pedigree systems for prescription drugs on the following schedule:

• Manufacturers must implement e-pedigree on 50 percent of their products by 2015, and the remaining 50 percent by 2016.
• Wholesalers and re-packagers must accept and forward products with the e-pedigree by July 1, 2016.
• Pharmacy and pharmacy warehouses must accept and pass e-pedigrees by July 1, 2017.

E-pedigree and serialization tracking systems rely on bar-code technologies to enable serial-level traceability of individual medicine packages. Serialization—applying a unique and absolute identifier to an individual product unit rather than a lot level—maintains a product’s pedigree throughout the supply chain, whether it is being shipped out or returned.

But compliance and required labeling can create complex warehouse management implications. "Serialization adds multiple bar codes," says Phil Siewert, senior director of business development, life sciences, and healthcare, Exel. "A single carton could have two to four bar codes in different formats."

The FDA’s proposed rule requires that most medical devices distributed in the United States carry a UDI—a unique numeric or alphanumeric code that includes a device identifier, which is specific to a device model, and a production identifier, which includes the current production information for that specific device, such as the lot or batch number, the serial number, and/or the expiration date.

The intent is to improve the quality of information in medical device adverse event reports, which will help the FDA identify product problems more quickly, better target recalls, and improve patient safety.

"In our distribution centers, our warehouse management systems (WMS) must be able to execute, control, and capture all the processes needed to support our customers’ compliance requirements by industry," says Miller. "Because the product is already bar-coded, we can ensure traceability at the ‘each’ level. But if we open a case in the warehouse, we have to apply a bar code to every unit to ensure traceability.

"The WMS must record every process in the DC, especially exception processes, where a unit might get damaged or broken down into smaller quantity shipments," she notes. "This affects our picking and inventory control to ensure we capture the serial number for the lowest unit of measure."

Looking Ahead

Supply chain management as we know it today could not exist without the bar code. But looking ahead, issues must be resolved if global business is to continue getting safer and more efficient.

Trends such as regulatory requirements in food and healthcare will only demand that more data be collected from the supply chain. Industry must figure out how to standardize this information, and how to handle the exponential growth in the sheer volume of supply chain data.

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