“The entire value chain, comprising of manufacturer, retailer or logistics service provider, needs to know exactly where their shipments of goods are, at any time, where they have come from, and when & where they are due to arrive. Identifying, capturing and sharing information about the movement of products—and the digitalization of everyday business processes—not only enhances interoperability between stakeholders but creates a highly efficient, sustainable and collaborative logistics environment. GS1 is working to achieve fully accurate, real-time visibility throughout the supply chain, from source to consumer, no matter what the mode of transport is,” stresses Ravi Mathur, CEO, GS1 India, during an interview…
How alarming is the issue of counterfeiting globally and in India?
Ravi Mathur, CEO, GS1 India
According to the Global Brand Counterfeiting Report 2018, the amount of total counterfeiting in the global market had reached 1.2 Trillion USD in the year 2017 and was projected to reach 1.82 Trillion USD by 2020. You will be alarmed to know that even a country’s most crucial products and equipment are counterfeited, let alone luxury goods and other high value items. The same 2018 report also says that the online counterfeiting led to 323 Billion USD loss in the year 2017. The challenges of counterfeiting are many, which include:
Loss of sales revenue and profit margin: With the influx of cheap and exact replica of real products, people fall for the same. The cheap price and easy availability of the same being the reasons, the existing original brands or businesses start losing on sales revenue, and profit margin.
Fraudulent product warranty claims: With fraudulent products comes fraudulent claims. The counterfeit products for obvious reasons are availed of by the consumers at comparatively much cheaper rates because of the usage of compromised quality materials and poor-quality treatment. Thus, their longevity also gets compromised.
Product liability claims: With counterfeiting comes no product liability claim. So, in case you encounter defective or damaged products or not getting adequate warnings or instructions regarding the product, or even the warranty, you do not have the option to complaint and seek for the product liability claims. The reason being is that you cannot trace the origin of counterfeit products.
Damage to brand and product reputation: A layman cannot distinguish between original stuff and a counterfeited one. For him, a replica seems to be the original one. But when replicated products do not live up to the quality of the brand, the brand and the product’s image get hampered. And most importantly, the customer’s faith in the brand gets shaken. Thus, the customer’s trust shifts from the existing brand to some other brand.
How does Traceability help?
With intrusion of fake goods in the market, traceability can help brands or even small-scale businesses survive. Traceability is divided into two major segments – unit traceability and batch traceability. Unit traceability allows tracing of every single unit and batch traceability allows tracing of the entire batch. Every original brand/business uses a barcode on its product. With Traceability system in place, brand owner can locate the entire batch of the product or any single product of the batch, from the supply chain and can take corrective measures if needed. GS1’s traceability provides a solution to such business problems.
Tell us more about GS1 Global and its journey in India...
GS1 was set up in response to challenging environments retailers and suppliers of FMCG companies were facing. These retailers were then grappling with the problem of uniquely identifying retail products in the supply chain, and at the same time, providing visibility to all the stakeholders in the supply chain – be it for raw material providers, manufacturers, or distributors, etc. There was a need for unifying out internal coding systems for identifying products. In a nutshell, the basic premise of GS1 has been to help Industry enhance efficiency and profitability in their supply chains through the adoption of global standards.
GS1’s global scale and reach – local Member Organizations in 115 countries, 1.5 million user companies and 6 billion transactions every day – help ensure that GS1 standards create a common language that supports systems and processes across the globe.
GS1 India is an affiliate of an international body – GS1 Global, which is headquartered at Brussels. Talking about our footprints in the Indian market, GS1 India was set up under the umbrella of Ministry of Commerce and Industry, Government of India, along with CII, FICCI, ASSOCHAM, FIEO, IMC, BIS, Spices Board, APEDA, and IIP, in the year 1996. GS1 standards improve the efficiency, safety and visibility of supply chains across physical and digital channels in 25 sectors.
How do GS1 standards help and what is their scope for SMEs?
GS1 standards facilitate unique and universal identification, capture and share of information on products and services, from point-of-origin to point-of-sale or dispensation. Most commonly, GS1 standards are used in barcoding of consumer items and they enable important applications, such as product authentication, track & trace, product recall, real-time stocks monitoring, online selling and more. When industries use GS1 standards, consumers benefit from enhanced product availability, safety & security, and making better purchasing decisions whether shopping online or offline. GS1 System of Standards create a common foundation for business by uniquely identifying, accurately capturing, and automatically sharing important information on products, locations, assets, and more. GS1 standards make it possible for companies to speak the same language, connect with each other, and enable visibility in the supply chain, irrespective of their geographic locations.
GS1 standards are becoming increasingly important for small businesses to sell online. Marketplaces, like Amazon, eBay, Flipkart and Google Shopping use unique GS1 barcode numbers (Global Trade Item Number - GTIN) to manage their vast product catalogues. With unique GS1 barcode numbers, marketplaces can help shoppers find, compare and buy products more easily.
What are the applications of GS1 standards?
Inventory Management: Effective inventory management is all about keeping the right product in the right place at the right time and in the right quantity. Or, in other words, it is about keeping an optimal stock of products at various storage centers to ensure continued customer service at the desired level. Inaccurate inventory counts can also lead to the mismanagement of products with expiration dates, especially for fresh foods, pharmaceuticals, and medical supplies. The identification and sharing standards of GS1 System are ideally suited to uniquely and accurately identifying and tracking inventory as it moves through the supply chain, thus enabling efficient inventory management.
Traceability: The ability to track and trace goods across multiple trading partners with real-time visibility and quickly respond to market needs is the key to a successful and efficiently managed supply chain. In this context, businesses such as manufacturers, logistics providers and retailers are facing a multitude of challenges, which include:
Higher than ever expectations of quality and safety from consumers
Increased demand for quick and efficient responses to questions regarding product ingredients from regulators
Need for immediate and effective product withdrawals/recalls in the event of a crisis
Increased demand for product authentication and counterfeit detection to protect brand integrity and consumer safety.
GS1 standards provide the necessary framework required to support a seamless traceability system. GS1 Global Traceability Standard (GTS), developed in 2005, with the active participation of global industry, defines the globally-accepted method for uniquely identifying and sharing information on – trading partners, trading locations, trading items, logistics units, Inbound and outbound shipments.
With business challenges that relate to traceability solutions increasing in number and complexity, and with newer emerging technologies, GS1 has developed GTS 2. The updated standard includes references to new technical possibilities such as EPCIS. There are references to new data and event-sharing architectures such as the possibility to connect databases and to search for information in the “cloud”. GTS 2 is global and multi-sectoral and meets the needs of all industries and geographies.
Authentication & Counterfeit Detection: Counterfeit products are a threat to consumer safety. The increasing level of counterfeit activity in all sectors poses a huge challenge to industry and governments around the world. More so with today’s online marketplace models, where e-commerce platforms only facilitate trade between buyers and sellers without physically handling goods, making it easier for counterfeiters to flourish.
One of the key underlying causes of the growth of counterfeiting is the inability of current supply chain systems to effectively identify counterfeits. The answer lies in greater visibility, traceability and transparency across supply chains from raw material to point of sale/use. GS1 and its interoperable standards support industry and government agencies to put effective solutions in place to tackle this problem. GS1 standards provide the much-needed foundational layers and building blocks that allow organizations to focus more on how to use the information rather than how to get the information. They help in improving collaboration, traceability, transparency, security, and visibility in the supply chain.
Product Recall: A great threat to success in any industry today is the possibility of a devastating recall that can destroy reputation and brand image of a company as well as raise consumer safety issues. Worldwide, businesses, consumers and regulators have a common interest in establishing an affordable, uniform, and interoperable processes that can enable supply chain partners to initiate a rapid and efficient recall and track its progress through to its conclusion, consistently ensuring that the identified product is no longer available for consumption. An effective recall needs seamless data flow among supply chain partners with unambiguous and unique identification of products, consignments, locations, parties, and documents. The GS1 product recall solution, based on GS1 Global Traceability Standards, was developed in response to growing stringent regulations worldwide on product recall, concerns on consumer safety, the increasing need for sustainable sources of supply and the growing emphasis on the necessity of ethics in trade.
Please enlighten us on use of GS1 barcodes in pharmaceuticals.
GS1 standards enable authentication and verification of pharmaceuticals drugs by making it possible to uniquely identify, capture and share important information about consignments with Regulators and patients across the world. Pharmaceutical companies, across the world, mark their consignments with GS1 barcodes at various packaging levels and upload this information along with product hierarchy (parent-child relationship). More than 3000 companies comply with GS1 barcoding standards in India.
Share with us some of the success stories.
Well, there are many success stories that we have brought out towards enhancing traceability in the supply chain. One of the most successful one is about Indian Railways, which uses GS1 identification standards to track wagons and coaches. Indian Railways uses GS1 identifiers, encoded in radio frequency tags, to manage and know which of its assets – wagons, coaches and locomotives – are located where this also helps Indian Railways capture data accurately on these assets while in transit and use this information for more efficient utilization of its rolling stock.
For unique identification of its rolling stock, Indian Railways uses EPC/ RFID tags designed by the Centre for Railway Information Systems (CRIS) encoded with GS1’s GIAI-202 standard. These tags have a user memory area that allows the information stored in them to be read and used, without any backend network connectivity.
Till recently, Indian Railways uniquely identified 3,500 wagons and tested the design of radio frequency tags at a speed of over 180 kmph. Trackside readers installed in between stations and other key points can read these RFID tags from a distance of one-and-a-half meter and transmit the vehicle identity over a network to a central computer. Indian Railways also plans to integrate these tags with trackside equipment for runtime detection of maintenance parameters.
What are the global best practices implemented in transforming last mile delivery?
With access to products from around the world, customers are making purchase decisions more frequently, and for smaller orders. As customers interact across multiple channels, vast amounts of data is being collected by omni-channel stakeholders. There is an opportunity (and a challenge) to turn this customer intelligence into actionable insights and visibility for improving how deliveries are made in the last mile. Clearly, new transport & logistics (T&L) paradigms are needed to deal with the challenges of this new buying environment—where the power resides with customers. Luckily, new innovative models are emerging.
In the European Union (EU), a standardized parcel label has been created to enable interoperability amongst all stakeholders in the supply chain. Similar standardization initiatives have been implemented and are developing in countries like Australia and China. Urban consolidation centres are also being implemented—impacting the flow of deliveries into cities and the flow of information between trading partners. By using a common set of standards, all stakeholders can gain visibility into deliveries made and achieve a higher drop-density rate. Parcel lockers are gaining popularity, helping to streamline the delivery of orders to multiple customers, and from multiple sellers. These lockers can provide significant cost savings and ease last-mile fulfillment challenges. Additional cross-border savings can be realized through special services that combine deliveries in the retailer’s country for transport to the customer’s country.
With the mix-move-match concept, delivery consignments are built close to customer delivery locations; and with collaborative routing centres, shipments are bundled by multiple shippers and carriers. This reduces the number of trucks required and provides relief from traffic congestion around customer locations. In fact, some stakeholders like manufacturers and LSPs are partnering to fully utilize space on each company’s trucks for time and cost savings, and ultimately, greater customer satisfaction.
GS1 standards can provide these emerging services and innovations with a necessary and beneficial foundation of unique identification—of trading partners, locations, logistics units, shipments and assets. When used by all trading partners, GS1 standards enable the seamless flow of physical deliveries along with the flow of information—propelling the transformation of the last mile for the benefit of all.
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