The Value and Benefits of the GS1 System of Standards - Term Paper Example

?With the advent of globalization which is becoming a key element of much of today’s business activity, the supply chain has to integrate goods and services from diverse sources that may sometimes be incompatible without a shared standard (GS1 n.d). Consequently, international transactions could be needlessly expensive owing to the extra costs incurred in adjusting the products to match with foreign counterparts. To remedy this, GS1 developed a global standard which governs all the partners across the supply chain. Essentially, GS1 standardization provides a metric system governing everyday items such as paper sizes, universal Buses and electronic sockets. As long as the members abide by the same coding rule, the products and services will be universally measurable and definable so as to facilitate multiplicity of usage. Currently, GS1 is the most widely used global supply chain standards system, through it, any organization irrespective of size or geo-relocation can order, trace, deliver and pay for goods along the supply chain. One of the primary techniques used to streamline the supply chain from the raw materials to the manufacturing stage is the use of barcodes; they play a central role in GS1’s functionality. They are a global standard language and they transcend language barriers which have retrospectively posed a serious challenge to the globalization of trade (Crichton 2008). Since their introduction by GS1 as part of the global standardization process, the speed and accuracy of transactions have significantly improved. For the last three decades, GS1 has delivered enterprise solutions and simplified execution of global standards for use in local and transnational supply chains. The chief purpose of GS1 standards is the provision of a structure that facilitates express and operative movement of, goods, service and corresponding information. The formation of GS1 was occasioned by a merger between the Uniform Code Council (UCC) and the European Article Numbering (EAN International) in a 1990 cooperative agreement in which they agreed to formally co-manage global standards. The organization has extensive latitude and it governs a global notational membership of over 100 encompassing millions in the 24 industrial sectors. It is highly dynamic and has maintained an exponential growth rate primarily because of its profit reinvestment strategy; all the extra revenues generated by its activities are channeled back to further develop the organization. Supply Chain Management A well designed supply chain is crucial in the quest to expedite day to day business operations so as to reduce the complexity of trade between organizations both locally and internationally. To this end, it is essential that business maintain a set of universal standards, which makes for easier decision making in terms of which hardware, software or services need to be purchased or used. Furthermore, universal standards ensure collaboration between traders throughout the supply chain such that identification and sharing of items as well as calculations of quantities across the board can be smoothened. In the long run, this benefit all the stakeholders since goods become easily available and accessible and service provision is more efficient; for instance, in the medical field, errors are reduced and patient safety enhanced. GS1 also plays a key role in combating counterfeit products since it facilitates global traceability and authentication. Relative to the principle of Global Standard, GS1 keeps four global trading products namely; Barcodes, Electronic Business Messaging (eCom), Global Data Synchronization Network (GDSN) and EPC global. They also provide services such as; Customer Service, Education and Training and Barcode Testing (Moore 2009). In lieu with the new technological development that have been integrated into the business environment, information supply and authentication of data is made easier through the Go scan app that allow users to scan a products barcode and access the product data online. The Shoe Size Analogy In today’s world the importance of GS1 systems technology cannot be overstated, to help appreciate the value it brings into business, consider a hypothetical situation that would ensue if there were no standards at all. Take the analogy of shoe sizes, in New York; a size 7 shoe is 38 in China, 4.5 in England 37.5 in Paris and 5.5 in Australia. Under this premise, it is extremely difficult and frustrating for an international traveller who may end up buying mismatched shoes. Additionally, shoe companies targeting the global market may have to label the same size shoes differently for different countries, and this will be logistically costly and the margin of error will be extensive. At the end of the day, the manufacturing process may end up being more costly and the costs will in turn be passed on to consumers, this will make the shoes more expensive and create a gross imbalance on the global supply, furthermore this effects will be felt in the overall global economy. Comparatively, shoes are a minor example, non-standardization in other globally influential sectors such as energy and technology could have substantially more severe economic ramifications. Warehousing and Product Information Retrospectively, the GS1 barcodes were used to primarily with the intention of improving on previous barcodes which were bigger yet could not hold as much information. GS1 barcodes can be used to tag smaller items, as small as individual pieces of fruit and Jewelry; in addition, they also hold other pertinent information such as best before dates, discount coupons and other information. This allows the clients to make informed decisions while enabling the retailers to keep an efficient record of their inventory and sales. Another significant advantage that accrues to business because of GS1 is exemplified in the EDI systems, they significantly eliminate human error when used to carry out tasks such as sending out purchase orders and invoices and other business documents. Filling problems such as missing smudged or even damaged papers are eliminated. Data safety is enhanced and there are considerable savings that stand to be made since the EDI systems is fully computerized so storages pace is minimized and ultimately the labor costs are scaled down. World over, companies are set to accrue innumerable benefits in the in supply chain and consumer management owing to the revolutionary changes that have been engendered and portended by the GS1 technology. When the GS1 standards encoded onto RFID tags are scanned, warehouse operators can tell a great deal about the products therein; in addition, they can not only tell the location of the product but the barcode technology allows them to know where the item has been before and who has handled it before other pertinent data. With the GS1 data bars, customers need to spend less time at the checkout counter since employees need not look up the codes of read the expiry dates for the fruit or bread one is buying. Transport and Security The RFI technology also provides important services outside the supply sector, in security and transport; these are the same codes that are used to label id badges and passports to detect forgeries. On fast lane toll bridges and highways, there are silicon chips that read the data without using a scanner making the whole process faster, more efficient and safer. Improving Quality of Health Care The health sector is a very diverse environment in which individuals, drugs and medical technology need to be perpetually traced so as to facilitate the right drugs in the right dosage are administered at the right time (Lehlou et al. 2011). Nevertheless, medical personal are human and therefore fallible; consequently, errors are made every day and many of these result in serious injury or even loss of life. Moreover, due to the stress under which many doctors and nurses operate, they are particularly vulnerable to exhaustion; therefore, more prone to errors. GS1 is however working alongside the medical sectors world over to reduce and prevent such errors. Thus, it has a Healthcare branch that combines the input from hospitals, pharmaceutical, firms, medical device manufacturers and suppliers and other stakeholders. It has made significant steps in making these different parties work together despite the fact that their relations are often competitive to develop common standards that will reduce accidents and therefore increase patient safety (Davison 2010). Fighting Counterfeiting GS1 technology is also important in the fight against counterfeiting; technology has made it possible to reproduce a variety of products especially due to the wealth of information available on the internet. However, when this is exploited by unscrupulous individuals and firms, it can result in a myriad problems not the least of which are economic crisis and possible health and safety complications when it involves drugs. There are hundreds of secret illegal laboratories in the world which use sugar wax and similar materials to make fake pills that resemble original drugs. This done been done so carefully that even the drug manufactures cannot tell the products apart without carrying out chemical tests. Consequently, drug manufacturing firms are incurring heavy losses as the counterfeiters sell their fake drugs for less and undercut them in the market. The economic ramifications however transcend poor sales, the ineffectiveness of the fake drugs is inevitably blamed on the drug firm marring its reputation and causing even more long term damage. The most dangerous aspect is that the counterfeit drugs will jeopardize the lives of patients who take them since they will not be cured and could easily die for lack of medication while assuming they are being treated. GS1 has achieved significant success in dealing with drug counterfeiters and this, if exploited by other sectors plagued by counterfeits such as cosmetics, electronics and mobile parts could result in significant reductions of the vice. Food Safety Business that deals with food products can also reap substantial benefits from using the traceability applications provided by GS1. There recently in Europe and America, there was a scandal involving several supermarket chains selling horse meat disguised as beef (Lawson 2013). While this was a sign of recklessness and poor ethics, it was a relatively good case scenario; a worse scenario would have been evinced if they had distributed spoilt meat that could harm the consumers. Before a consumer buys food products, they often ask themselves several questions; where did it come from, is it something I could be allergic to? Some will even want to know if it was produce in an eco-friendly way as well as a host of other queries. As the horse meat scandal attests, the labeling may not be entirely conclusive or even true. However, GS1 traceability systems follow the product from the manufacture to the consumer providing accurate information on the; content, handling, adjustments along the supply chain and any other pertinent data. No matter how many firms are involved or the geographical scope involved, GS1 can facilitate global traceability and in the event of a problem with the food products, the systems expedite an effective recalling process thereby minimizing risk. Product Recalls In most of Europe, the law demands that manufactures must inform the consumers of any arising problems with their products and they are legally bound to carry out product recall should such cases arise. Currently, many other countries are reviewing their legislation on the subject to enhance consumer protection; this has also motivated produces and manufactures to boost their internal recall process to mitigate against the potential publicity and potential reparation demands resulting from inefficient recalls. GS1 has and been instrumental in instituting such changes for several companies and many others stand to benefit from its services that would ensure they obtain accurate product information to facilitate swift and comprehensive recall strategies. Furthermore, GS1 standards provide for high quality assurance therefore reducing the frequency of recalls. Conclusion Ultimately, from the above report, it is abundantly clear that GS1 has not only advanced facilitated and advanced the advent of a revolution in supply chain management but it also provides workable alternatives that can aid businesses improve quality of service and protect consumers. The EPC barcodes allow for an efficient way of providing stock updates forecasts and expediting recalls. Furthermore, safety practices have been enhanced and many health institutions stand to gain from the benefits of inculcating GS1 systems. GS1 embodies importance of having common standards and it will undoubtedly play an even greater part in the standardization of goods and produces in posterity as demand keeps growing in proposition to the exponential rate of globalization. Reference List GS1. n.d. The Value and Benefits of the GS1 System of Standards. [online] Available at http://www.gs1.org/docs/GS1_System_of_Standards.pdf [Accessed Oct. 20, 2013] Crichton, K. 2008, "Company awarded membership to GS1", Manufacturers' Monthly, pp. 72. Davison, M. 2010, "Obstacles to implementing an effective anti-counterfeit strategy: can they be overcome?",Pharmaceutical Technology Europe, vol. 22, no. 7, pp. 17-18. Lawson, A. 2013, "Food Standards Agency raids firms as horse meat scandal reaches UK", Retail Week . Lehlou, N., Rardin, R., Buyurgan, N., Jayaraman, R., Varghese, V., Burbano, A., Hajiyev, A., Rashidi, E. & Farrokhvar, P. 2011, "A Levels, Readiness, and Impact Evaluation Model for GS1 Adoption in Healthcare", IIE Annual Conference.Proceedings,, pp. 1-7. Moore, B. 2009, "Barcodes: The Next Generation", Material Handling Management, vol. 64, no. 3, pp. 48. Read More