Foodservice Barcode Dilemma

Despite progress, there is still not enough barcode use across the industry to achieve real supply chain efficiencies.


It should come as no surprise that both companies were early pioneers in EFR barcoding tests and pilots, but those companies aside, many distributors report that at least 15 percent to 20 percent of all products coming into their warehouses do not have barcodes of any kind.

"We get products all the time that don't have any barcodes," says John Brusie, systems administrator at Cash-Wa Distributing, Kearny, NE, which supplies more than 3,500 accounts in the Midwest. "Then we get some vendors that send some items with barcodes and some without."

Still other products come in with multiple barcodes. "Between pallet, case and individual item, we can have three different barcodes for the same product," Brusie also notes.

Barcoding is also inconsistent from one supplier to the next. "It has been painfully clear that members of the foodservice industry have different ways of identifying product," says Allen. "Some suppliers use the GTIN, some use their own internal number, some use the distributor's number and still others use the operator's number, all to identify the same product."

The industry has pretty much settled on the GTIN as the standard, but adoption has been another thing. According to Jim Lavender, executive vice president of purchasing and marketing at Ben E. Keith Foods, Fort Worth, TX, some companies at one time "were talking about 30- or 40-digit codes to contain all kinds of information that they may or may not need."

Adds Susan Boyme, a product marketing specialist at Retalix, "The standard is out there in the GTIN. ERP and WMS systems are ready, it's just a matter of getting all the parties together to use it.

Retalix, which offers WMS and ERP solutions, is GTIN-compliant and trying to promote its use among its customers, says Boyme. "If you're still waiting, you're missing out on a lot of the efficiencies that you can achieve."

Prone To Errors
This lack of barcoding—and inconsistency in barcoding—is being seen by distributors as a main reason for a high level of errors on inbound freight. Current estimates place accuracy levels at just 89 percent on inbound freight received from suppliers.Today's processes also contribute to an increase in database errors, incorrect orders, shipments and invoices and an increase in invoice deductions.

"As members of the supply chain communicate with each other, each must cross-reference its product number with the other party's product number. As each function within a company uses this process, the chances for errors increase," Allen explains. "As your communications about that product increase with additional members of the supply chain, the chances for error further increase."

Those errors typically result in a back order being issued, but at least 60 percent of those back orders are later cancelled as distributors and operators look elsewhere for the products that could not be delivered on the first pass.

EFR analysis, however, shows that 63 percent of manufacturer errors and 21 percent of distributor errors could be eliminated with item, price and promotion data synchronized across a common barcoding format. The same data places the potential for savings in food service at between $847 million and $1.1 billion a year through streamlined transportation and handling, reduced invoice discrepancies and deductions, accurate contract pricing, improved trading relationships and more productive use of employees' time.

This last point—worker productivity—is perhaps the single greatest benefit to be gained, say experts and industry insiders alike. For one thing, the lack of a single standard has forced manufacturers, distributors and end users to create databases of all the different product identification numbers, or to pay a third party to create and maintain those databases. That is extra work that could be avoided.

"When we have no barcode, we have to cross-reference it through our system with a product description, and we try to give it an item number based on that description," says Cash-Wa's Brusie. "It's often difficult for us to cross-reference products across all manufacturers."

Then, distributors have to assign all products that arrive at their receiving docks unique pallet-level, barcoded license plates. Those codes, usually generated by their WMS solutions, contain unique product IDs, date stamps, storage locations within the warehouse, expiration dates and more.

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