Retailers brace to comply with revamped bar code rules

One month after the deadline for the replacement of the Universal Product Code with a new global standard has passed, there hasn’t been much effort among Canadian retailers to comply, according to experts close to the retail industry.

On Jan. 1, 2005, the Global Trade Item Number

(GTIN) replaced the American standard 12-digit bar code with the European version, which uses 13-digits. Outside of North America, companies have used eight and 13-digit codes issued by the European Article Numbering (EAN) Association.

The initiative, otherwise known as 2005 Sunrise, was set eight years ago by not-for-profit organization Uniform Code Council Inc. so that products imported from Europe and abroad would no longer require re-packaging or re-bar coding for the North American market. Effective Jan. 1, all Canadian and U.S. companies should be capable of scanning and processing EAN-8 and EAN-13 symbols in addition to 12-digit UPC symbols at point-of-sale (POS), according to the international e-commerce standards body, which includes The Electronic Commerce Council of Canada (ECCC).

“As far as I know there are some retailers who are waiting to be forced into it or waiting for the opportune time to jump in,” said Rena Granofsky, senior partner technology, J.C. Williams Group. “It’s a cost of doing business. If you can continue to work with your suppliers and they’ll deal with you because you’re big enough, you’ll continue to do what you’re doing until it is a much more efficient time to make that change.”

Ian Bowden, president of Edmonton-based Aurora Bar Code Technologies Ltd., which focuses on industrial applications for warehousing and product tracking, agreed that there is no compelling reason for retailers to change yet.

“I doubt there was all that much action, even with the people in the POS business because they already do read those other symbols,” said Bowden, referring to the EAN codes. “Sunrise has really just added an extra digit to all UPC bar codes. That didn’t mean that the bottle of Coke you bought last year now has an extra digit on it. It only means that the databases have to accommodate an extra digit.

“Since most bar code scanning equipment that’s been made in the last seven or eight years reads the 12 digit as well as the 13 digit symbols, it didn’t require a heck of a lot of upgrading as far as the scanning hardware goes.”

However, Nigel Wood, director of ECCC, said while some small and mid-sized retailers are lagging behind, the large majority of Canadian firms have transitioned their systems to comply with the initiative.

“I haven’t gotten any phone calls, so I’m assuming things are transitioning fairly effectively,” said Wood, adding ECCC is tracking retailers through surveys sent out to various industry associations including the Retail Council of Canada and the Canadian Federation of Independent Grocers.

“Some of the smaller retailers still have some challenges. It’s not a big issue. They have to modify their scanners so they can just read the extra bar code.”

Wood added most scanners post-1991-92 can be re-programmed. But retailers might need to make some minor software upgrades, such as extending their POS database files to accommodate 13 digits. The complexity depends on how many touch points there are with the EAN-13 and UPC code throughout a retailer’s applications, said Wood.

“If you’ve integrated that UPC code or EAN-13 throughout your applications into your warehousing then it’s going to be much more significant than if you’ve just been utilizing it for POS information.”

One potential impediment for small businesses is cost, added Wood.

“If it’s going to cost me an extra $2,000, $3,000 it’s still a much more significant cost than it is for large retailers,” he said. “What organizations tend to do is ignore it until the date approaches. We’ve been advertising this for four years now. I’m sure not a lot have been paying attention to it until now.”

But the price for failing to comply could potentially cost retailers in the end.

“Suppliers will service those retailers who have complied better than those who have not, which will force retailers to comply at that point,” said Granofsky. “Other retailers who don’t deal with global products or manufacture most of their own stuff might not be hit with this as much at all.”

Like Y2K Colin Haig, vice-president of business development at Toronto-based software developer Triversity Inc. said 2005 Sunrise may turn out to be a non-event.

“I haven’t heard a single horror story yet,” said Haig. “A lot of credit has got to go to the men and women in the IT departments who did their homework last year. There will still be a few who are caught with their pants down and that will be exciting when that happens.”

But as 2005 inventory enters the supply chain, there may be some “surprises” as not all manufacturers are up to speed.

“I don’t know that (retailers) have actually seen product with the new code yet coming from the various manufacturers.”

Consumer packaged goods companies, for example, that sell commodity items from toothpaste to camping gear will have a standard Sunrise-compliant bar code on them, he added.

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