Industry Standards for the Retail Industry
Industry standards are the foundation for business process interoperability between SAP and non-SAP applications and platforms. Industry standards define a common business language, which is a required to cost-effectively enable business process integration between systems, both inside an organization and across the value chain. Standards enable business process flexibility by providing concrete rules for integration that have been developed by representatives of the consumer products community. SAP has deep domain experience in building solutions for consumer products, retail trade, distribution and wholesale trade. SAP has worked with numerous industry standards organizations to advance business semantics to enable more efficient business processes and to maximize supply chain flexibility.
The following organizations produce standards that SAP customers in the retail industry have found to be most useful in enabling business processes between applications as well as the systems of their trading partners. The standards produced by these organizations are frequently leveraged in SAP business solutions packages.
Industry Standards for Retail
GS1, formerly EAN, has been serving the consumer products and adjacent trade industries for over 30 years with the Universal Product Code (UPC) - the ubiquitous barcode. Fundamentally, GS1 is in the business of selling numbers that uniquely identify an object, typically a physical object such as a product or a shipping container. Barcodes have brought tremendous gains in efficiency to many industries as a machine readable font. However, the GS1 number system is still most widely known in the retail trade industries.
In the last five years, the family of GS1 standards has expanded beyond barcodes to encompass supply chain business processes with message definitions, Radio Frequency Identification (RFID), and product data synchronization. Each of these topical areas has its own organizational entity. Supply chain business process standards are managed by eCOM, RFID standards are produced by EPCglobal and the Global Data Synchronization Network is called GDSN. GS1 Global is headquartered in Brussels, Belgium. There are 103 Member Organizations in GS1, each having a distinct country affiliation. For example, there is a GS1 Germany, GS1 China, and GS1 US and so on. Typically, a company would work with the GS1 member organization that is located in the country where they are headquartered.
The American National Standards Institute (ANSI) Accredited Standards Committee (ASC) X12 is the North American organization that develops cross-industry standards. ANSI is the US representative body to the International Standards Organization (ISO). It is well known for the X12 syntax based Electronic Data Interchange (EDI) transactions. EDI transactions are well-adopted in the retail industry, particularly in North America. The typical EDI transactions are targeted at demand replenishment. The EDI implementations in the retail industry are typically considered a subset of an implementation of Collaborative Planning, Forecasting and Replenishment (CPFR).
GS1 eCOM encompasses the group of standards that address common business processes in the supply chain. These processes tend to be very well-suited for the consumer products and retail trade industries and that is where most of the adoption of eCOM has occurred to date. There are two distinct categories of standards in eCOM. Older eCOM standards are based on Electronic Document Interchange (EDI). The newer generation of eCOM standards is defined using XML and XML Schema and leverages some of the state-of-the-art methodologies developed at UN/CEFACT. While the retail industry in North America is know for adoption of EDI specification, companies in the European Union are more likely to have adopted eCOM flat files that are similar to EDI. At the moment, the industry has not embraced the new XML standards produced by eCOM.
The Global Standards Management Process (GSMP) is the forum where the GS1 standards are defined and maintained by GS1 staff and members of the supply chain community, particularly the consumer products and retail trade industries. GSMP brings together stakeholders in the community to define requirements and best practices then industry standards are developed to support electronic commerce including data synchronization. In recent years, GSMP has incorporated methodologies from the United Nations/Centre for Trade Facilitation and Electronic Business (UN/CEFACT) which may advance the interoperability of GS1 standards across multiple industries. SAP is using significant portions of the UN/CEFACT technical specifications in the development of SAP Enterprise Services.
EPCglobal was founded in 2003 as a joint venture between GS1 Global and the GS1 Member Organization for the United States, called GS1 US. The two organizations purchased the intellectual property created by the Auto-ID Labs at MIT. The result is a new global standards system that combines RFID (radio frequency identification) technology and the Electronic Product Code (EPC). EPC is a system that provides a number for uniquely identifying an item. This is similar to a UPC or barcode but the EPC number system provides additional information that enables the unique identification and tracking of an item through the supply chain, resulting in improved efficiency and visibility.
The GS1 funding model is based on selling unique numbers, either UPCs or EPCs. Companies that would like to use RFID in their supply chain business processes should contact EPCglobal to gain entry to the EPC numbering system otherwise companies may consider the ISO numbering system which is offered at a fraction of the price. EPCglobal is currently in the process of defining the standards for the EPCglobal Network architecture. The objective of the EPCglobal Network is to enable the visibility of physical objects in motion in the supply chain. This is typically called track-and-trace and many of the more advanced value propositions for using RFID are based on this capability. Business processes that can leverage track and trace include inventory visibility and control, counterfeit drug tracking or asset tracking and maintenance.
The Global Data Synchronization Network (GDSN) enables secure and continuous data synchronization of product and location information. Data synchronization is the process that allows trading partners to have consistent item data in their respective systems at the same time. Retailers and suppliers connect to a selected data pool, which is typically managed by the local GS1 member organization, which is in turn connected to the GS1 Global Registry. Suppliers electronically transfer (using GSMP standards) product data and location information to the data pool or registry. The product data includes such attributes as size, height, weight and packaging information. Retailers subscribe to just the specific data that is of interest to their organization.
To be effective, data synchronization must be a continuous process. It is an ongoing business process that requires continuous exchange of data between trading partners. Hence, when a supplier publishes a change, it is propagated to the retailers in near real time. The classification system used in the GDSN is the Global Product Code (GPC). Only items classified according to the GPC will be registered in the GS1 Global Registry. GDSN has proven to be effective in enabling business process around new product introduction.
The Global Commerce Initiative (GCI) is a global user group comprised of the world's biggest multi-national manufacturers, retailers and service providers. GCI has agreed on the business rules for setting up a globally standardized model: the Global Product Classification (GPC) Schema. The objective is to improve supply chain performance between manufacturers and retailers by the voluntary adoption of industry standards for product group identification. GPC allows trading partners to communicate more efficiently and accurately throughout their supply chain activities. It is expensive for companies to develop their own coding systems that cannot be used for external communication. A single universal coding convention, or taxonomy, acts as a cost-effective link in the supply chain. Classification codes are necessary for effective searching of products and services, for identifying where expenditures are made, and for promoting products to potential buyers. Global Data Synchronization is dependent on trading partners using the same global standard product classification schema to enable product search, view and subscription and publication activities. The GS1 community owns the GPC Schema. It is made available to the community at no cost.
The Association for Retail Technology Standards (ARTS) is a standards organization dedicated to the retail industry. Whereas the GS1 family of standards is primarily engaged in business-to-business (B2B) standards, ARTS tends to focus on application-to-application (A2A) standards. ARTS has developed four standards: the Retail Data Model , Unified Point of Service (UnifiedPOS), IXRetail XML schemas to integrate applications within the retail enterprise and standard Requests for Proposal (RFP's) to guide retailer selection of applications and provide a development guide for vendors. IXRetail is comprised of 11 schemas then enable A2A integration in the retail sector. UnifiedPOS address the exchange of data between point-of-sale devices and business applications. UnifiedPOS also defines standardized means of programming point-of-sale devices.
The Voluntary Inter-industry Commerce Solutions Association (VICS), works to improve the efficiency and effectiveness of the retail supply chain. VICS pioneered the implementation of the Quick Response (QR) standard that simplified the flow of product and information in the retail industry for retailers and suppliers alike. While the results of QR are impressive, VICS is now more widely know for their new collaborative supply chain process called Collaborative, Planning, Forecasting, and Replenishment (CPFR). VICS has a legacy of developing business guidelines and processes that improve supply chain management effectiveness and efficiency, while increasing retail sales. Barcodes applied in physical distribution, EDI, Quick Response, Floor-Ready Merchandise, the VICS Bill of Lading and Collaborative Planning Forecasting & Replenishment (CPFR) are examples of VICS business practices.
VICS is now working on developing a global logistics model that includes the employment of technology, business processes, and the identification of organizational requirements for effective supply chain management. This work is in collaboration with GS1 Taiwan and GS1 Hong Kong member organizations, who are assisting in the development of the "Global Collaborative Commerce Logistics" initiative. The objective is to improve speed to market and global supply chain efficiency and effectiveness. VICS addresses high-level, strategic standards requirements. VICS EDI handles the maintenance and fine tuning of VICS standards, and is a separate organization administered by GS1 US which is also the Secretariat for VICS. VICS' business process initiatives leverage the GS1 System of technology and business standards.