The need for product identification

A typical retail store offers at least a few hundred units of products to the consumer. In order to understand what has sold and to be able to re-order products the retailer needs to know the quantities the types, colors, sizes, and other characteristics of products sold. It is not humanly possible to remember all these variations over a period of time. Even if attempted it is a time consuming exercise and could be error ridden. Thus, need was felt for developing a machine readable system which could help identify the product across various retail locations and provide information about the product to be associated with a quickly.

The Universal Product Code (UPC) or barcode as it is popularly known was developed from this need. While the first barcode patent was issued in 1952 the retail industry adopted it much later, as to implement a barcode system, hardware to produce the codes and interpret the information contained in them was required. Once this was developed the grocery retailers were the first to adopt the barcode.

Bar coding is one of the IT tools used for automatic data capture. As opposed to manual data entry, which is tedious and prone to inaccuracies and errors, bar coding enables data capture with 100% accuracy and in micro-seconds. Barcodes can be used to represent information related to product attributes; other supplementary information like batch number manufacturing/expiry dates, consigner/ consignee etc.

What is the UPC?

The Universal Product Code (UPC) or the bar code is basically a product identifier made up of a series of bars and spaces, which represent alphanumeric information. In 1972 manufacturers and distributors of 12 European countries formed a council to explore the development of a standard numbering system for Europe similar to and compatible with the UPC. The European Article Numbering (EAN) was born as a result. It is a superset of the UPC and is followed in India.

EAN international has 99 member organizations across the world, representing 101 countries

EAN in India

EAN India is a non-profit organization affiliated to EAN International Brussels under the Ministry of Commerce, Government of India, formed with the objective of assisting Indian trade industry and related infrastructure in adopting the EAN International system for identification and communication of information about product and services.

Any organization which requires automated stock control or identification systems can benefit from the adoption of the EAN code. It is useful for organizations, which perform one or more of the following activities:

1) Produce products that are ultimately sold at retail outlets
2) Distribute or store goods on a large scale.
3) Export products
4) Repackage goods for further selling.

Most items manufactured for sale through retail outlets bear a number and a barcode symbol like the one shown below. The whole number is made up of two sets of digits and a check digit. The first set is the country prefix followed by the item reference number and the last digit is the check digit.

The Indian arm of the organization allocates the EAN prefix and it helps member organizations throughout the world identify the country and the organization. The prefix provides seven or eight of the 13 digits, which are required to identify each item in the product range.

The item reference numbers are a block of numbers that are assigned to the company by the parent body. The last digit is the check of the GTIN (Global trade Item Number), and is calculated from all the digits in the number and is used to ensure that the barcode is correctly scanned and that the number is correctly composed.

When International numbering standards are used as symbology, it enables universal and unique identification of companies and their products / consignments.

Retailers worldwide (Wal-Mart / K Mart/ J C Penny/ Otto Versand / Federated etc) have already asked their Indian suppliers to use GS 1 barcodes.

GS 1 India is promoted by the Ministry of Commerce, Government of India and was registered in June 1996, as a society. It is a joint Government Industry initiative for educating the Indian trade and industry on the use of the GS 1 numbering system for unique identification of products/ services and locations, in line with international best practices.

Despite the near absence of organized retail in India, a compliance level of over 75% has been achieved in the past 5 years on the adoption of global GS 1 barcodes by the FMCG sector. All major FMLCG retail chains already scan GS 1 barcodes, and are experiencing enhanced accuracy in demand forecasting, real time stock management fast check outs at their POS, product track and trace reduced labeling / administration costs etc.